Supply Chain and Cotton

Supply Chain and Cotton

Maura Bennett
Maura Bennett

We’ve reported that US cotton is having a banner year.

Production up 25% with the cost up to around $.90 per pound.

But there is a hiccup in this year’s cotton crop. Supply chain issues are keeping some cotton exports from shipments to overseas markets leaving producers holding the bag.

US cotton values are running ahead of last year but actual volumes of cotton shipments are still down.

Consider a state like Georgia whose largest crop export is raw cotton valued at $590 million in 2020 and things add up.

Kenner: “ We’ve kind of been watching that happen month after month. That’s one of the main commodities that’s being hit by this bottleneck situation with shipping containers at ports.”

Bart Kenner, USDA economist speaking with the agency’s new service says cotton is being affected more than other commodities because growers export a lot of raw cotton to Asia. Raw cotton as opposed to cotton thread or material takes up a lot more space on a container.

Kenner: “Those shipping containers not being able to flow through the ports as much as the products are being demanded on either side of the oceans.”

Cotton production in Georgia is forecast at 2.3 million bales, up 6 percent from last year. In Alabama, production is forecast at 755,000 bales, up 3 percent from 2020. Florida production is expected to total 130,000 bales, 26 percent above last year.

But while US cotton export values for 2021 were up 10% from 2020. Actual export volumes are down 4%.

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