February 1, 2002

2 Min Read

When farmers are confronted with day after day of low prices as they have been in recent months, it's difficult to remember that, over the long-term, the low prices are the exception to the rule.

For most of the past 25 years, New York cotton futures have traded in a range of 50 to 70 cents per pound with four exceptions, says Sharon Johnson, an analyst with Frank Schneider & Co., in Atlanta.

The exceptions:

1986 — New York futures traded down to 29.50 cents per pound after marketing certificates were offered for the first time.

1990-91 — High export demand for cotton pushed futures to just over 90 cents per pound.

1995 — Cotton futures reached $1.17 per pound due to record U.S. demand and crop failures in top-producing foreign countries.

2001 — Record crops in the United States and the world pushed futures to 28.20 cents per pound following the Sept. 11 attacks in New York and Washington.

Longer-term, U.S. cotton prices literally have been all over the board throughout the 200 years for which prices are available.

In 1800, prior to the invention of the cotton gin, cotton sold for 37 cents per pound. While that might seem like a low price today, it's the equivalent of $2.89 per pound in 1998 dollars, according to Frank Weathersby of Affinity Cotton Trading.

Cotton sold for as little as 10 cents in the early 1800s and again in the 1840s before jumping to $1.26 per pound during the Civil War. In the aftermath of the war, cotton prices fell as low as 6 cents per pound in the 1890s.

World War I brought another jump in price, but not to the levels seen in the Civil War. The Great War (as World War I is sometimes referred to) only pushed cotton prices into the 30s.

During World War II and the years that followed, cotton prices remained in the 30s except in the mid-1960s, when synthetic fabrics became the rage and sent prices for cotton tumbling into the 20s. When farmers began to fight back through investments in Cotton Incorporated, prices jumped to that 50 to 70-cent range.

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