Characteristics and Production Costs of U.S. Cotton Farms, 2007

Agricultural Resource Management Survey (ARMS) data for 2007 highlight the production\r practices and costs related to the cotton enterprise, as well as the characteristics of\r U.S. cotton farm operations. Combining ARMS data with ERS cost-of-cotton production\r estimates for 2007 provides a 1-year snapshot of cotton producers. For instance, low-cost producers reported higher yields and lower levels of major inputs per planted cotton acre than mid- and high-cost producers in 2007. Southwest producers accounted for a larger share of the smaller U.S. cotton crop in 2007 due to their lower cotton production costs and lack of alternative crops. Most U.S. cotton is produced on very large diversified farm\r operations, with cotton often constituting a small share of these operations’ total acres. In contrast, producers with larger cotton enterprises in 2007 relied more on their cotton crop, making them vulnerable to changes in cotton prices or yields. These producers, however, were also more likely to offset greater risks by purchasing revenue insurance on cotton.