Since passage of the 2018 Farm Bill, cotton production costs are up by 27%, with input prices up for most major categories. Interest expenses are up by more than 200% while fertilizer costs have almost doubled. Expenses for labor, seed, and chemicals are up by approximately 50%.
Market prices are struggling as world cotton demand has fallen by 3.2 million bales since 2018, while Chinese polyester production is up by 35.5 million bales and Brazil and Australia combined to add 10.4 million bales of cotton production.
In 2024, growers across the Cotton Belt have been severely impacted by weather issues along with a 12% drop in cotton prices between planting and harvest.
The financial situation of U.S. cotton farmers continues to deteriorate as the farm bill safety net and current market prices have been well below production costs for the last two years. Unfortunately, the current seed cotton reference price of $0.367 per pound does not provide an adequate safety net for cotton growers.
Many growers have suffered deep losses in 2023 and 2024, with USDA data indicating combined losses of more than $300 per acre over the two years, or $2.5 billion in total.
With current deliberations underway for economic assistance, disaster assistance, as well as the 2024 Farm Bill, the importance of a strong safety net cannot be overstated. Congress must act before year’s end to both address the immediate economic needs, as well as strengthen farm policy for the years ahead. Without new assistance, some farmers will not be able to secure operating credit for the 2025 crop.
Dr. Jody Campiche is Vice President, Economics & Policy Analysis, National Cotton Council
Source: cottongrower.com