ERS Charts of Note
Friday, June 19, 2020
Cotton mill use generally tracks global economic activity. When the global economy weakens—as during the COVID-19 pandemic—consumers often defer purchases of items such as clothing, and the associated industries adjust operations accordingly. For the textile and apparel industry, these adjustments have included temporary closures or substantial reductions in manufacturing operations, as postponement or cancellation of orders have had ripple effects throughout the entire supply chain, from raw fiber procurement to retail sales. The developing global economic slowdown has significantly reduced world cotton demand for marketing year (MY) 2019 (August 2019-July 2020). Although June’s global mill use forecast is at a 16-year low, the projected year-over-year decrease is of historic proportion—down nearly 15 percent—and unmatched during the past century. World cotton mill use has declined more than 5 percent year-over-year in only 10 other years since MY 1920, with most of those reductions associated with global recessions, including the Great Depression. More recently, uncertainty surrounding the global financial crisis significantly limited world cotton demand in MY 2008, while a dramatic run-up in MY 2010 cotton prices to levels not experienced since the U.S. Civil War hampered mill use in MY 2011. While the overall severity of the COVID-19 pandemic remains unknown, the immediate shock to global cotton mill use has been historically significant. This information and the impacts on global cotton supply and demand are discussed in the Economic Research Service’s Cotton and Wool Outlook report for June 2020.
Wednesday, March 4, 2020
After a hiatus of almost 45 years, the Agricultural Act of 2014, Public Law 113-79 (the 2014 Farm Bill) reintroduced industrial hemp production in the United States through State pilot programs. Industrial hemp is a strain of Cannabis sativa that is low in active tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana. It is grown specifically for a variety of industrial products. Production of industrial hemp beyond the pilot programs was legalized in the Agricultural Improvement Act of 2018, Public Law 115-334 (the 2018 Farm Bill). By mid-2019, 47 States had passed legislation to allow some form of hemp production and planted acreage reported to the USDA Farm Service Agency increased from zero in 2013 to 32,464 in 2018 to 146,065 in 2019. Hemp competes for acreage against crops with established markets and decades of agronomic research and industry experience. Through 2019, the largest hemp acreage is found in States that are not leading producers of conventional field crops such as corn, soybeans, wheat, or cotton. This chart is based on information in the Economic Research Service report, Economic Viability of Industrial Hemp in the United States: A Review of State Pilot Programs.
Monday, January 27, 2020
For 2019, increased imports are expected in many non-cotton-producing countries, as well as some producing ones. Although China—a major producer—is projected as the leading importer in 2019, its upcoming imports are expected to be below those from a year ago, as cotton mill use in China is forecast to decline for the second consecutive year. In contrast, all other major importers are anticipated to secure additional imports this year. For Bangladesh and Vietnam, higher cotton imports are seen as supporting the recent textile and apparel industry expansion. At the same time, a 3-decade-low production forecast for Pakistan in 2019 is expected to result in record-high cotton imports to help sustain its spinning industry. Meanwhile, higher imports are also forecast for Turkey and others in 2019. In fact, global cotton imports are forecast by the U.S. Department of Agriculture to rise for the fourth consecutive year in 2019 to 43.8 million bales, nearly 4 percent (1.6 million bales) above last year’s volume. The growing trend is significant for the United States, as more than 80 percent of U.S. cotton production is exported to numerous countries around the world, with the U.S. share of 2019 global trade forecast at 38 percent. The 2019 global import forecast would be its highest since 2012’s record of 47.6 million bales. This chart is based on data in the ERS Cotton and Wool Outlook Tables, released in January 2020.
Monday, September 16, 2019
USDA estimates released in August indicate the total U.S. cotton textile and apparel trade rose during the first half of 2019, compared with the corresponding period in 2018. U.S. cotton product imports totaled the equivalent of 9.0 million 480-pound bales of raw cotton during January–June 2019—2 percent higher than the same period in 2018—while cotton product exports declined slightly to 1.7 million bales. As a result, the cotton textile and apparel trade deficit was 4 percent higher during the first half of 2019. The source for U.S. cotton product imports remains concentrated among a handful of suppliers, with the top five countries accounting for nearly 68 percent of total imports during the first half of 2019. Compared with the same period in 2018, the share rose for four of the top five suppliers during the first 6 months of 2019. Only imports from China saw a decrease, as U.S. importers appeared to increase reliance on other suppliers as a result of the U.S.-China trade dispute uncertainty. Nonetheless, China remains the leading supplier of U.S. cotton product imports, accounting for nearly 30 percent of total imports during January–June of 2019. India supplied 12 percent, while Pakistan, Vietnam, and Bangladesh each contributed an additional 9 percent. This chart appears in the ERS Cotton and Wool Outlook report released in August 2019.
Friday, August 3, 2018
The latest USDA cotton projections for the 2018/19 marketing year (August-July) indicate that world cotton mill use will reach a new record high, in large part reflecting additional expected growth in the world economy. Global cotton consumption is projected at 127.0 million bales in 2018/19, 3.9 percent above 2017/18. Mill use, a proxy for consumption, is forecast to rise in each of the leading raw-cotton spinners in 2018/19, with China accounting for more than one-third of the world total. Cotton mill use growth varies by country and year of comparison. Using 2015/16 as the base year, 2018/19 world cotton consumption is projected 12 percent higher. Relative to 3 years ago, cotton mill use in China in 2018/19 is expected to be 18 percent higher, while India and Pakistan increase by just 2 and 4 percent, respectively. Cotton mill use in Bangladesh and Vietnam continues to expand, and the growth since 2015/16 has been remarkable. For Bangladesh, 2018/19 mill use is projected 27 percent higher than in 2015/16, while the growth for Vietnam is even more dramatic, with 2018/19 mill use expected to be nearly 67 percent above the 2015/16 level. This chart appears in the ERS July 2018 Cotton and Wool Outlook newsletter.
Tuesday, June 26, 2018
The latest USDA cotton projections for 2018/19 indicate that global cotton stocks will decrease, following last season’s relatively small increase. Worldwide, USDA projects ending stocks at 83.0 million bales for the 2018/19 marketing year, nearly 6 percent below 2017/18 and the lowest since 2011/12. Global cotton stocks totaled a record 110.8 million bales at the end of 2014/15. China held 60 percent of the total, reflecting Government policies at the time that led to unusually large stocks in its national reserve. Subsequently, China implemented policies to reduce its surplus stocks and thereby lowered world stocks. For 2018/19, stocks in China are projected to decline further to 33.1 million bales—40 percent of the global total—while stocks outside China are forecast to approach a record high 50 million bales. However, as a share of world mill use, stocks outside China are expected to rise only slightly in 2018/19. In the United States, stocks have risen progressively and are on track to be their highest in a decade at 4.7 million bales. This chart appears in the ERS Cotton and Wool Outlook: June 2018.
Friday, April 27, 2018
Global cotton ending stocks serve as an important benchmark and help determine worldwide cotton prices. Global cotton ending stocks are projected to increase slightly in the 2017/18 marketing year. Global ending stocks are forecast at over 88 million bales, about 2 percent above the previous season—but the second lowest since 2011/12. The rise in stocks follows back-to-back decreases over the last two marketing years. The largest holder of cotton stocks is China, which accounts for nearly 50 percent of the world total. China’s share has fluctuated in recent years, from 20 percent in 2010/11 to a high of 61 percent in 2014/15 and back down to 46 percent in the current season. Since 2014/15, China’s stocks have declined as policies to reduce the excess cotton supplies also discouraged production and limited imports. Meanwhile, stocks in the United States and for the rest of the world are projected to increase in 2017/18, largely due to increased production brought about by relative prices that favor cotton over competing crops such as corn and soybeans. This chart appears in the ERS Cotton and Wool Outlook newsletter released in April 2018.
Tuesday, April 3, 2018
U.S. net textile and apparel imports increased to record levels in 2017, as demand for clothing increased along with the expanding economy. Net imports in 2017 approached 16.2 billion raw-fiber-equivalent pounds, 2 percent above 2016. Total textile and apparel imports surpassed 19.7 billion pounds in 2017, compared with 19.3 billion pounds in 2016. Meanwhile, textile and apparel exports in 2017 totaled 3.5 billion pounds, similar to a year earlier. With net imports of synthetic fiber products rising for 8 consecutive years, cotton’s share has declined considerably as growth in “athleisure” wear has increased demand for synthetic fibers. During each of the last 4 years, synthetic fiber products accounted for the largest share of total net imports. In 2017, synthetic textile and apparel products contributed 50 percent to the total, while cotton products accounted for 43 percent. Linen, wool, and silk products, combined, added an additional 7 percent. Although these percentages equaled those of 2016, suggesting at least a pause in cotton’s declining share, the percentages for cotton and synthetic products were nearly reversed just 5 years ago. This chart appears in the ERS Cotton and Wool Outlook Newsletter, released in March 2018.
Thursday, August 10, 2017
From 2006 to 2015, upland cotton exports decreased by 34 percent, production by 42 percent, and mill use by 31 percent. Key factors that drove these shifts include: increased competition from foreign suppliers, prolonged droughts that lowered production, lower import demand from China, and competition from synthetic fibers (such as polyester). While many factors limited cotton market opportunities through 2015, USDA baseline projections through 2026, which provide a long run view of the U.S. farm sector, nonetheless indicate that exports of U.S. upland cotton and mill use are expected to increase relative to the 2006-15 time period. Between 2016 and 2026, U.S. upland cotton exports and mill use are projected to rise by 3 and 7 percent, respectively, while production is expected to drop by less than 1 percent (stocks are also projected to decrease over this period). The major factors expected to drive this change are increased global demand from rising incomes and populations and the cotton crop’s reputation of superior quality relative to its competitors. This chart appears in the Amber Waves article, "U.S. Upland Cotton Exports and Mill Use Projected To Improve," released in August 2017.
Wednesday, May 31, 2017
USDA estimates commodity costs and returns based on periodic of commodity producer surveys. Cotton producers were surveyed in 1997, 2003, 2007, and most recently in 2015. Total economic costs estimated from these cotton surveys declined from about $1.40 per pound in 1997 to $0.92 in 2015. Declining real costs of cotton production reflect productivity gains in the industry that can be traced to the adoption of new cotton production technologies and changes in where cotton is grown. Productivity gains were particularly rapid during 1997-2003 as genetically modified (GM) cotton was widely adopted and real production costs fell nearly 20 percent. Between 2003 and 2015 real production costs fell another 20 percent, while cotton acreage declined 36 percent. Cotton became more concentrated in the low-cost Southern Plains region and declined in the high-cost areas of California and the Mississippi Delta region. This chart is drawn from the ERS Commodity Costs and Returns data product, updated in May 2017.
Tuesday, April 25, 2017
The latest USDA cotton projections for marketing year 2016/17 indicate that world ending stocks are forecast at 90.9 million bales, 6 percent below the previous season and 19 percent (nearly 21 million bales) lower than 2014/15’s record of 111.7 million bales. Global cotton stocks in 2016/17 are expected to decline in back-to-back years after five consecutive seasons of rising supplies. Earlier cotton prices support policies in China that contributed to the buildup in global stocks, culminating in nearly 67 million bales of cotton at the end of 2014/15. Likewise, the recent trend of declining supplies is attributable to more recent policies in China that discouraged production, limited raw cotton imports, and began the process of reducing the surplus in government-held stocks. In 2016/17, China’s cotton stocks are forecast at 49.1 million bales, nearly 18 million bales below the record and the lowest in 5 years. With combined stocks in the rest of the world expected higher in 2016/17, China’s share of global stocks are projected to decrease to 54 percent, compared with 60 percent during the previous three seasons. This chart appears in the ERS Cotton and Wool Outlook report released in April 2017.
Monday, April 3, 2017
U.S. net textile and apparel fiber imports were stable in calendar year 2016, near 2015’s record total. In 2016, net imports approached 15.8 billion raw-fiber-equivalent pounds. Total fiber product imports reached 19.3 billion pounds in 2016, compared with 19.6 billion pounds in 2015. Meanwhile, textile and apparel product exports totaled 3.5 billion pounds in 2016, compared with nearly 3.8 billion pounds a year earlier. With synthetic product imports rising for 7 consecutive years, cotton’s share has declined steadily during this period. For the last 3 years, synthetic products have accounted for the largest share of total net imports. In 2016, synthetic textile and apparel products contributed 50 percent to total net imports, while cotton products supplied 43 percent and linen, wool, and silk products provided an additional 7 percent. Compared with 5 years ago, the contributions have been reversed. In 2011, cotton accounted for 50 percent of the total net imports, while synthetics provided 44 percent. This chart appears in the ERS Cotton and Wool Outlook report released in March 2017.
Thursday, March 2, 2017
Prior to the 2015/16 marketing year, global cotton production had exceeded consumption for 4 consecutive years. This led to increasing ending stocks and downward pressure on cotton prices. In addition to the negative production incentives from low prices and excess stocks, poor weather conditions further reduced global cotton production in 2015/16. Consumption exceeded production in 2015/16 by 15 million bales and falling prices stabilized. In 2016/17, projected production has remained below consumption and prices have increased. The global cotton industry also continues to face price competition from synthetic fibers to maintain market share. Consumption is only projected to grow by 1 percent in 2016/17 and is up only 4 percent over a 5-year period. This chart is drawn from the ERS Cotton and Wool Outlook tables released in February 2017.
Monday, October 3, 2016
The latest U.S. Department of Agriculture (USDA) estimates for 2016/17 project world cotton production at 102.5 million bales, 6 percent above the previous season’s 13-year low. The three largest cotton-producing countries remain India, China, and the United States. In 2016/17, these countries are forecast to account for 62 percent of global production, slightly below the 3-year average (approximately 64 percent) as larger harvests are expected from a number of other cotton-producing countries such as Pakistan and Brazil. India is expected to remain the leading producer, after first surpassing China in 2015/16. Globally, 2016/17 cotton production is rising as a result of a higher yield expectation. World cotton area, on the other hand, is declining for a second consecutive season and projected to dip to its lowest since 1986/87. The reduction in planted cotton area may be due to declining global cotton prices as well as reduced imports from China. The ratio of cotton prices to alternative fibers such as polyester has also remained high even as cotton prices have fallen. This is due in part to the recent declines of global oil prices, which constitutes a key input in polyester production. This chart is based on data reported in the ERS Cotton and Wool Outlook published September 2016.
Tuesday, July 26, 2016
The 2016 U.S. cotton crop is expected to reach 15.8 million bales (1 bale = 480 pounds), 23 percent larger than the 2015 crop, reflecting a 17-percent increase in acreage, lower abandonment and higher yields compared to last year. Globally, cotton production is projected to reach 102.5 million bales in 2016, up 5 percent from last year. Global cotton production is concentrated among a small number of countries, with India and China accounting for nearly half of world production and the top five producers expected to supply 77 percent of the world’s cotton this year. Production in most countries is expected to increase at least modestly this year, with the exception of China, where production is expected to fall 4.5 percent to 21.4 million bales as acreage there falls to historically low levels. Given the large increase in U.S. production, the U.S. share of global supply is expected to increase from 13.2 percent in 2015 to 15.4 percent in 2016, compared to a 27-percent share supplied by India and 21 percent by China. This chart is from the ERS report Cotton and Wool Outlook report, July 2016.
Wednesday, June 1, 2016
World cotton consumption is expected to grow modestly during the 2016/17 marketing year (August-July), reaching 110.8 million bales. That is similar to 2014/15 levels after dipping slightly in 2015/16. Modest growth in the global economy and relatively low cotton prices are expected to support mill use in most countries. China, India, and Pakistan are expected to lead world cotton mill use and account for a combined 62 percent of the total, similar to 2015/16. Global cotton production is forecast at 104.4 million bales in 2016/17, a modest increase following the 16-percent reduction in production in 2015/16—the result of inclement weather and pest damage in a number of producing countries. While cotton area is expected to decline, a rebound in yields would support the increase in production. With global cotton consumption forecast to exceed production for a second consecutive season, 2016/17 world ending stocks are projected to decline 6 percent from 2015/16, but at more than 96 million bales, ending stocks remain historically high and will continue to weigh on prices and production. This chart is from the May 2016 Cotton and Wool Outlook report.
Friday, April 29, 2016
Global ending stocks of cotton are forecast to decline in the 2015/16 marketing year (August-July), down about 9 percent from last year’s record of nearly 112 million bales. Cotton stocks rose dramatically between 2010/11 and 2014/15 as relatively high prices encouraged world production and discouraged consumption. Despite this season’s anticipated decrease, ending stocks remain double the 2010/11 level. The recent global stocks buildup resulted from policies in China that insulated Chinese cotton producers from declining world prices and, at the same time, also encouraged imports. More recent policy shifts in China have discouraged production and imports in that country, beginning the process of reducing the surplus of Government-held stocks. In 2015/16, China’s stocks are expected to decrease for the first time since 2010/11. However, with stock reductions also expected in the rest of the world, China’s share of global stocks remains above 60 percent. This chart is from the April 2016 Cotton and Wool Outlook report.
Tuesday, March 29, 2016
U.S. net imports of textile and apparel fiber products increased for a third consecutive calendar year in 2015 to the highest on record, reaching 15.7 billion pounds (raw fiber equivalent), compared with 14.5 billion pounds in 2014. U.S. net imports consist mostly of cotton and manmade fiber products, as demand for linen, wool, and silk products remains relatively small. With manmade fiber imports expanding steadily in recent years, cotton’s share has declined consistently. In 2015, cotton textile and apparel products accounted for 44 percent of the total imports, while manmade fibers contributed nearly 49 percent. By comparison, in 2007, cotton accounted for 56 percent of all textile and apparel imports, while the share of manmade fibers was 37 percent. This chart is from the Cotton and Wool Outlook, March 2016.
Monday, November 2, 2015
Employment at U.S. textile plants has fallen by nearly two-thirds over the past 20 years as fabric production and apparel manufacturing shifted overseas in search of lower labor and production costs. Today, more than 60 percent of clothing and other textile products purchased by U.S. consumers is produced outside of the United States. However, both the sharp decline in U.S. textile employment and the rise in import share of U.S. fiber consumption began to level off around 2009. In recent years, the U.S. textile industry—particularly the capital-intensive yarn and fabric production industry—has shown signs of a modest rebound. Cotton consumption by U.S. textile mills in marketing year 2015 (August/July) is forecast at 3.7 million bales, up 3.5 percent from a year ago and 12.1 percent from its 2011 low. In 2014, U.S. textile mill employment showed its first gain since 1994—up 0.2 percent. Investment in U.S. cotton spinning by firms from China and India is underway as well, reflecting the changes in global textile markets since the Multi-Fibre Arrangement (which governed world trade in textiles and garments) expired on January 1, 2005. This chart is from the October Cotton and Wool Outlook report.
Friday, July 31, 2015
Cotton production is concentrated among only a few countries, with the world’s five largest cotton-producing countries forecast to produce nearly 80% of world production in 2015/16. India and China together account for more than 50 percent of global cotton production, but production in China is declining while increasing in India. In 2015/16, India is expected to surpass China as the world’s largest cotton producer for the first time on record, with a crop forecast at 29.5 million bales, pushing India’s share of world production to 26.5 percent. For China, 2015/16 production is forecast to decrease 10 percent (3 million bales) to 27 million bales, the lowest since 2003/04. China’s share of global production is forecast at 24 percent as area continues to trend lower. The difference in the production outlook for China and India can be traced in part to China’s rising wages and increasing production costs, while new technology and production practices have driven India’s yields and output significantly higher in recent years. Its output surpassed the United States for the first time in 2006 and is now poised to surpass China, which had been the world’s largest cotton producer since 1982. This chart is from July 2015 Cotton and Wool Outlook report.