Tight Margins Persist as Southeast Cotton Yields Drop
Two new USDA reports are painting a mixed picture for farmers in the Southeast — with updated crop forecasts on one hand, and high production costs on the other.
The August World Agricultural Supply and Demand Estimates brings the first field-based yield projections for the 2025/26 crop year. Cotton output is projected at 13.2 million bales, down sharply from July and last year as Southeastern states see lower yields. That drop pulls ending stocks down to 3.6 million bales and lifts the price to 64 cents a pound. Sugar supplies are higher on more beet production and bigger beginning stocks, pushing the stocks-to-use ratio to 17.75%.
Margins remain tight. USDA’s Prices Received Index for crops in June was up 9.2% from a year ago, but the Prices Paid Index — covering feed, seed, fertilizer, and fuel — also climbed 7.1%, keeping pressure on the bottom line.
For Market Intel on these reports from the American Farm Bureau, visit https://www.fb.org/market-intel/wasde-robust-crops-high-input-costs-strained-margins
