Publications

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  • Trends In U.S. Cotton Basis Since 2001

    CWS-09D01, June 25, 2009

    Price volatility in 2008 generated interest in underlying cotton cash and futures markets and highlighted the importance of market participants' expectations about basis changes over time in production, marketing, and hedging decisions. This analysis examines trends in average U.S. cotton basis and changes in the convergence of cash and futures prices as cotton futures contract expiration dates near between 2001 and 2009 to provide perspective for the average basis movements experienced in 2008. Though this analysis does not identify the factors leading to differences in average convergence paths since 2001, it finds that, while average cotton cash and futures prices converged in all years, the pattern in 2008 was significantly different from the other sample years.

  • Emerging Issues in the U.S. Organic Industry

    EIB-55, June 03, 2009

    Consumer demand for organic products has widened over the last decade. While new producers have emerged to help meet demand, market participants report that a supply squeeze is constraining growth for both individual firms and the organic sector overall. Partly in response to shortages in organic supply, Congress in 2008 included provisions in the Food, Conservation, and Energy Act (2008 Farm Act) that, for the first time, provide financial support to farmers to convert to organic production. This report examines recent economic research on the adoption of organic farming systems, organic production costs and returns, and market conditions to gain a better understanding of the organic supply squeeze and other emerging issues in this rapidly changing industry.

  • NAFTA at 15: Building on Free Trade

    WRS-09-03, March 31, 2009

    Implementation of the agricultural provisions of the North American Free Trade Agreement (NAFTA) has drawn to a close. In 2008, the last of NAFTA's transitional restrictions governing U.S.-Mexico and Canada-Mexico agricultural trade were removed, concluding a 14-year project in which the member countries systematically dismantled numerous barriers to regional agricultural trade. During the implementation period, the agricultural sectors of Canada, Mexico, and the United States have become much more integrated. Agricultural trade within the free-trade area has grown dramatically, and Canadian and Mexican industries that rely on U.S. agricultural inputs have expanded. U.S. feedstuffs have facilitated a marked increase in Mexican meat production and consumption, and the importance of Canadian and Mexican produce to U.S. fruit and vegetable consumption is growing.

  • Fiber Use for Textiles and China's Cotton Textile Exports

    CWS-08I-01, March 03, 2009

    New information about the role of recycling in the textile industry and updated estimates of efficiency in spinning lower estimates of the volume of cotton fiber exported by China in the form of textiles from those of an earlier study. China's textile industry not only meets domestic demand of the world's most populous country but is also the world's largest exporter. Consequently, China is the world's largest consumer and importer of cotton, but information about China's cotton consumption is incomplete. This analysis of China's textile trade offers important insights into trends in China's cotton use and imports. The revised textile trade estimates have implications for the outlook for China's cotton consumption and imports, which this study demonstrates with an econometric model of China's textile trade.

  • Factors Contributing to the Recent Increase in U.S. Fertilizer Prices, 2002-08

    AR-33, February 13, 2009

    U.S. prices of fertilizer nutrients began to rise steadily in 2002 and increased sharply to historic highs in 2008 due to the combined effects of a number of domestic and global long- and shortrun supply and demand factors. From 2007 to 2008, spring nitrogen prices increased by a third, phosphate prices nearly doubled, and potash prices doubled. The price spike in 2008 reflects low inventories at the beginning of 2008 combined with the inability of the U.S. fertilizer industry to quickly adjust to surging demand or sharp declines in international supply. Declining fertilizer demand, disruption in fall applications, increased fertilizer imports (July to August), and tightening credit markets for fertilizer purchases contributed to the decline of fertilizer prices in late 2008. The prospect for strong fertilizer demand in early 2009, high raw material costs for the manufacture of fertilizers, production cutbacks, and decreasing supplies from fertilizer imports, however, could put upward pressure on U.S. fertilizer prices in spring 2009.

  • The 2002 Farm Bill: Provisions and Economic Implications

    AP-022, January 23, 2008

    The Farm Security Act of 2002, which governs Federal farm programs for 2002-07, was signed into law on May 13, 2002. This publication presents an overview of the Act and a side-by-side comparison of 1996-2001 farm legislation and the 2002 Act. For selected programs, information is provided to additional analyses of key changes, program overview, and economic implications.

  • China's Cotton Supply and Demand: Issues and Impact on the World Market

    CWS-07I-01, November 06, 2007

    USDA has developed a new approach for estimating cotton consumption in China based on textile import and export data, supplementing the traditional methodology that uses yarn production data from China's National Bureau of Statistics. This analysis suggests USDA's historical estimates of China's cotton consumption are reasonable and USDA's August 2007 forecast may be conservative. These insights into the amount of cotton consumed by China's textile mills, combined with data on China's cotton exports and imports, suggest there may be problems with the official estimates of China's cotton production. Uncertainties regarding the level of production and consumption of cotton in China mean that the potential remains for unexpected changes in China's cotton import demand that could destabilize world commodity markets despite increased global communication. These unexpected changes highlight China's impact on world cotton markets and the lack of transparency in China's intervention in its domestic cotton markets and official cotton stock accumulation.

  • Ethanol Expansion in the United States: How Will the Agricultural Sector Adjust?

    FDS-07D-01, May 18, 2007

    A large expansion in ethanol production is underway in the United States. Cellulosic sources of feedstocks for ethanol production hold some promise for the future, but the primary feedstock in the United States currently is corn. Market adjustments to this increased demand extend well beyond the corn sector to supply and demand for other crops, such as soybeans and cotton, as well as to U.S. livestock industries. USDA's long-term projections, augmented by farmers' planting intentions for 2007, are used to illustrate anticipated changes in the agricultural sector.

  • A New World for U.S. Cotton Producers

    Amber Waves, April 01, 2007

    The end of the MFA has brought a decline in U.S. textile production and domestic demand for U.S. cotton with the result that the U.S. cotton sector has become increasingly export dependent. The sector has been helped by yield enhancing technological advances, but U.S. cotton also faces increasing competition from abroad. An ongoing WTO dispute and possible changes in U.S. farm legislation mean further uncertainty for the sector.

  • Cotton Backgrounder

    CWS-07B01, March 30, 2007

    U.S. cotton growers, like producers of other agricultural commodities in recent years, have confronted pressures from market forces and the impacts of policy developments, both domestic and international. Most notably, the ending of the Multifiber Arrangement (MFA) sent a ripple effect throughout the global cotton industry. While adjustments in the textile and apparel sectors of many countries, including the United States, continue to evolve, dramatic changes have already been seen for some. World cotton mill use has accelerated along with economic growth since 1999, particularly in China, and U.S. cotton producers have benefited as foreign import demand has reached new heights. Government payments contribute a considerable portion of total revenue to the cotton sector, and adjustments to this program or any other commodity program in the 2007 farm legislation will be driven by factors such as domestic market conditions, multilateral trade negotiations, and the Federal budget deficit.

  • NAFTA at 13: Implementation Nears Completion

    WRS-0701, March 29, 2007

    Implementation of the North American Free Trade Agreement (NAFTA) is drawing to a close. In 2008, the last of NAFTA's transitional restrictions governing U.S.-Mexico and Canada-Mexico agricultural trade will be removed, concluding a 14-year project in which the member countries systematically dismantled numerous barriers to regional agricultural trade. During the implementation period, the agricultural sectors of Canada, Mexico, and the United States have become much more integrated. Agricultural trade within the free-trade area has grown dramatically, and Canadian and Mexican industries that rely on U.S. agricultural inputs have expanded. U.S. feedstuffs have facilitated a marked increase in Mexican meat production and consumption, and the importance of Canadian and Mexican produce to U.S. fruit and vegetable consumption is growing.

  • USDA Agricultural Projections to 2016

    OCE-2007-1, February 14, 2007

    This report provides longrun (10-year) projections for the agricultural sector through 2016. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.

  • Indian Cotton Yield Gains Could Limit Imports

    Amber Waves, November 01, 2005

    Bt Cotton hybrids were first approved for India in 2002, and in 2005 Bt cotton varieties accounted for 17 percent of India’s cotton area. Yields have grown by 45-87 percent as a result of the new technology. The result could be a decline in import demand.

  • Behind the Data: Estimating the Raw-Fiber Equivalent of U.S. Cotton Textile and Apparel Imports

    Amber Waves, September 01, 2005

    The data behind the ERS raw-fiber equivalent estimates come from product-specific shipment volumes collected by the U.S. Department of Commerce. More than 3,000 different textile and apparel products containing cotton are imported by the U.S. annually and are converted to raw-fiber equivalents using factors developed by ERS.

  • Growth Prospects for India's Cotton and Textile Industries

    CWS-05D01, June 02, 2005

    India's prospects are changing now that the Multifiber Arrangement (MFA) no longer governs world textile trade. Decades of industrial policies that were both inward-oriented and biased toward small-scale production continue to influence India's textile trade prospects. While the recent introduction of genetically-modified (Bt) cotton has revitalized prospects for cotton production, quality issues are likely to hamper Indian cotton sales until the structure of India's cotton marketing system changes significantly.

  • China's Agricultural Imports Boomed During 2003-04

    WRS-0504, May 06, 2005

    China's agricultural imports more than doubled between 2002 and 2004 due to surging demand for basic commodities, a more open trade regime, and tighter commodity supplies in the Chinese domestic market. U.S. agricultural exports to China jumped to a record $5.5 billion in 2004 due to dramatic growth in U.S. exports of soybeans, cotton, and wheat. China was the fourth-largest overseas market for U.S. farmers during 2004, accounting for 9 percent of U.S. agricultural exports. China's agricultural exports continued to climb as well, but at a rate slower than its growth in imports. The outlook for Chinese imports is favorable due to strong economic growth and continued liberalization of the economy.

  • The Forces Shaping World Cotton Consumption After the Multifiber Arrangement

    CWS-05C-01, April 15, 2005

    The phaseout of the Multifiber Arrangement (MFA) and other forces are reshaping world textile and cotton markets. The elimination of the MFA is helping reduce clothing prices in the United States and the EU and effecting a shift in industrial demand for cotton to China, India, and Pakistan. At the same time, world cotton consumption has accelerated along with economic growth since 1999, especially in developing Asia, where an emerging consumer society is driving increases in household consumption of clothing and other cotton products. In the long run, income growth and technical change have more of an effect on world cotton consumption than the elimination of the MFA.

  • Characteristics and Production Costs of U.S. Cotton Farms

    SB-974-2, October 26, 2001

    Producing a pound of cotton cost U.S. farmers 38 cents in operating costs and another 35 cents in overhead costs in 1997, the latest survey year. Individual farm costs ranged from 18 cents to $1.97 per pound for operating costs and from 28 cents to $2.96 per pound for total costs. The Prairie Gateway had the largest proportion of cotton farms while the largest cotton farms and the largest share of cotton production were in the Fruitful Rim.

  • Cotton: Background and Issues for Farm Legislation

    CWS-0601-01, August 01, 2001

    Since passage of the 1996 farm legislation, U.S. cotton production and demand have nearly equaled each other, keeping stocks virtually unchanged. However, U.S. cotton producers have experienced deteriorating product prices coupled with declining yields during this period. Farm prices for upland cotton dropped 40 percent from their recent peak in 1995/96 to 45 cents per pound in 1999/2000, prompting considerable concern for the industry as the new farm legislation debate develops.

  • The Cotton Industry In The United States

    AER-739, July 01, 1996

    The United States produces nearly 20 percent of the world's cotton and ranks second to China as the largest producing country. While over 80 countries produce cotton, the United States, China, India, Pakistan, and Uzbekistan (former Soviet republic) produce about 74 percent of the total world cotton supply.