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Lower U.S. stocks are also supporting prices.

John Hart, Associate Editor

August 4, 2021

2 Min Read
John_Hart_Farm_Press_Kevin_Letbetter_Jody_Campiche.jpg
Kevin Letbetter, left, director of the Quality Assurance Division of the USDA-AMS Cotton and Tobacco Program in Memphis, holding a sample of the cotton his office grades and discusses the cotton outlook with National Cotton Council Economist Jody Campiche during the mid-year board meeting of the Southern Cotton Growers at the Ritz-Carlton in Amelia Island, Fla. July 22.John Hart

Cotton demand has recovered faster than anyone expected since the pandemic slammed the market last year and will continue to support prices moving forward, according to National Cotton Council Economist Jody Campiche.

Speaking to the mid-year board meeting of Southern Cotton Growers July 22 at the Ritz-Carlton in Amelia Island, Fla., Campiche noted that prior to the COVID-19 pandemic, USDA was projecting global mill use for the 2019 crop year at 126 million bales. Then the pandemic hit and by the end of 2020, global mill use was pegged at 102 million bales, a dramatic decrease.

Since then, Campiche said there has been a significant recovery with mill use almost back to the level prior to the Coronavirus outbreak. She noted this recovery is now supporting cotton prices. Retail demand for textile goods in the U.S. and other countries is now at higher levels than prior to the pandemic which is also supporting prices.

In addition, data published by the U.S. Census Bureau shows that U.S. consumer spending on clothing in June was the highest level on record and 16% higher than the number in June 2019, prior to the pandemic. Campiche said this is also great news for cotton demand.

In the meantime, lower U.S. stocks are also supporting prices. USDA puts U.S. stocks at 3.2 million bales for the current crop year. Campiche does expect more U.S. cotton production next year, but she also sees continued tight stocks which will support prices.

“What we are seeing is prices have been trading at pretty high levels. As we look ahead, I think we’re going to see price support, especially with our lower supplies in the U.S. Now, as we look across the world, we still have a lot of cotton out there, but there are fundamentals in place where there are countries that are still demanding U.S. cotton, and I think that’s great news for us,” Campiche said.

Still, Campiche cautioned that textile mills do tend to turn to polyester as the price of cotton increases.

“Right now, polyester prices are still really pretty low. A lot of textile mills start looking at their cost of production and may end up switching to polyester. We want prices to be high, but we don’t want them too high that textile mills start shifting to more polyester,” she said.

About the Author(s)

John Hart

Associate Editor, Southeast Farm Press

John Hart is associate editor of Southeast Farm Press, responsible for coverage in the Carolinas and Virginia. He is based in Raleigh, N.C.

Prior to joining Southeast Farm Press, John was director of news services for the American Farm Bureau Federation in Washington, D.C. He also has experience as an energy journalist. For nine years, John was the owner, editor and publisher of The Rice World, a monthly publication serving the U.S. rice industry.  John also worked in public relations for the USA Rice Council in Houston, Texas and the Cotton Board in Memphis, Tenn. He also has experience as a farm and general assignments reporter for the Monroe, La. News-Star.

John is a native of Lake Charles, La. and is a  graduate of the LSU School of Journalism in Baton Rouge.  At LSU, he served on the staff of The Daily Reveille.

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