Author: Don Shurley, Emeritus UGA Crop Economist
There are now multiple industry and government efforts underway aimed to improve the economics of the U.S. cotton industry. In my 46 years working with farmers and agriculture, I don’t believe I’ve seen such a widespread effort—particularly focused on one crop or segment of agriculture.
On May 28th, Secretary of Agriculture Brooke Rollins announced the Great American Cotton Plan—a series of initiatives to help support the cotton producer, improve the demand for cotton, revitalize the US textile industry, and improve US trade. No details are yet available on the specifics of exactly what this entails and how this will be done, but the link below is a very good listing and summary of what is included in the Plan.
USDA Launches Great American Cotton Plan to Revitalize the Cotton Farm Economy
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U.S. mill use (the use of US grown cotton in US mills) has essentially disappeared since the 1990’s. Previous farm bill efforts aimed to subsidize and incentivize the industry have not worked. The demand (total offtake) for U.S. cotton is now 87% exports. There are 2 issues—1-this loss of the U.S. mill industry and 2-an overall total lower demand/offtake—i.e a smaller market for the grower.
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Global demand/use of cotton has slowly begun to recover from the COVID impacts of 2019-2020 and subsequent years. Use has climbed above 120 million bales for the first time since 2017. Use has yet, however, to reach the levels seen in 2006, 2007, and the 2020 rebound. Demand has slowly trended up despite the struggle to compete with synthetic fibers. But, “slow” also can mean a cautious and uncertain outlook.
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In the 2023 crop year, Brazil took the lead over the US as the #1 exporter. Brazil’s exports have continued to increase while U.S. exports have been flat. For the upcoming 2026 crop year, Brazil exports are projected at 15 million bales compared to 12.3 million for the U.S. U.S. share of World exports has declined from almost 40% to less than 30%.
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The Great American Cotton Plan proposes support and partnership for the National Cotton Council’s “Plant Not Plastics” initiative and the Buy American Cotton Act (BACA) and should strengthen both.
The OBBB has improved the ARC/PLC safety net. It is expected to raise the triggers to respond better to a drop in price and revenue. Growers are concerned about price—price sufficient to cover costs and profit. Solving demand and these other issues is a start.
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