Cotton Production Forecasts
While the USDA reduced its cotton production estimate for the United States, cotton prices are not going down.
World Ag Outlook Board Chair Mark Jekanowski says cotton prices remain strong because of strong demand.
Jekanowski: “The market for cotton, again last year especially in the pandemic prices kind of cratered because of uncertainty about demand and long-term implications, and all of that uncertainty but cotton demand has remained strong. People continue to buy a lot of clothing and textiles. China continued to be a major importer of US cotton so prices have been strong really since last summer, right up through the current marketing year.”
Jekanowski says the latest World Agriculture Supply and Demand Estimates cut the yield estimate by 36 pounds per acre. That’s a reduction in US production of about 660 thousand bales. The cotton export forecast was also reduced based on the fact that exports weren’t up to what the export forecasts were last year. While China continued to be a major exporter of US cotton, it did not meet the US expectations.
But the season average market price for cotton of $.90 per pound is up nearly $.24 per pound from last year, again due to strong demand.
Cotton production forecasts for Australia are up thanks to improved water supplies. China’s production forecast is also up but India’s production estimates are down.