Profile revised March 2012.
Cotton is the single most important textile fiber in the world, accounting for about 35 percent of all fibers produced. The United States remains a major producer of cotton for the international market, ranking third behind China and India. The United States also remains the leading cotton exporter in the world. Six countries--Brazil, China, India, Pakistan, Turkey and the United States--are the top consumers of the world’s cotton. (ERS)
Cotton is produced in 17 states from Virginia to California. Texas consistently produces the most cotton, followed by Georgia and Arkansas.
Two types of cotton are grown in the United States: American upland (Gossypium hirsutum) and American pima (Gossypium barbadense), or extra-long staple (ELS) cotton. The predominant type of cotton grown is upland, which accounts for about 97 percent of U.S. production. The top producers of upland cotton in 2010 were (in order by volume): Texas, Georgia, Arkansas, North Carolina and Mississippi (NASS 2011). The balance of the U.S. crop is ELS or pima cotton, which is mainly produced in California.
As production became increasingly concentrated, the USDA grouped cotton-producing states into four regions. The Southwest region (Kansas, Oklahoma and Texas) typically produces the most upland cotton. The Delta region (Arkansas, Louisiana, Mississippi, Missouri and Tennessee) generally ranks as the number two producer of U.S. upland cotton, followed by the Southeast region (Alabama, Florida, Georgia, North and South Carolina, and Virginia). The West (Arizona, California and New Mexico) usually produces the least amount of upland cotton.
U.S. cotton production in 2011 was 15.7 million bales (1 bale = 480 pounds). Upland cotton production was 14.8 million bales, and ELS/pima production was 845,700 bales. (NASS)
Global cotton production in 2011 totaled 122.8 million bales, an increase of 7.5 million bales over 2010. China, the world’s largest producing country, harvested less cotton while India and Pakistan produced slightly larger crops. (ERS)
Recent technological advances—like biotechnology, variety improvements, and the success of the boll weevil eradication program—have increased cotton productivity across the United States. In 2005, upland cotton planted to biotech (Bt), or pest-resistant and/or herbicide-tolerant, varieties accounted for nearly 80 percent of total acreage, compared with about 50 percent just six years ago. More intensive management systems and increased area under irrigation have also raised U.S. cotton productivity.
China, India, Pakistan and the United States have all adopted Bt cotton seed. The impact in India has been especially remarkable. According to the government of India, genetically modified cotton now accounts for more than an estimated 70 percent of total cotton acreage in India. (ERS)
In 2011, the average price received by farmers for upland cotton rose to $0.91 cents per pound, up from $0.81 cents per pound in 2010, while the price for ELS cotton was $1.64 per pound. The average U.S. price for cotton was 0.96 cents per pound. The total value of the 2011 cotton crop was nearly $6.6 billion. (NASS 2011)
In November 2010, cotton prices surged to $1.27 per pound, almost doubling in 18 months and the highest since the Civil War. Several factors are contributing to the higher prices: tight global stocks, including the smallest U.S. stocks in 85 years; restriction of cotton exports by the Indian government; growth in consumer demand for textiles; declining world production in the three previous seasons; and the weaker dollar. However, the single most important price driver is a supply shortage in China, which has far exceeded expectations and has resulted in recent prices paid to producers of an unprecedented $2.00 per pound. (FAS 2011)
Cotton seed is processed into cottonseed vegetable oil for cooking; cottonseed meal, a high-protein supplement for livestock; and cottonseed hulls, a roughage for cattle feed. A ton of cotton seed yields about 320 pounds of oil, 910 pounds of meal and 540 pounds of hulls. (National Cottonseed Products Association)
Cottonseed oil is one of the country's most important sources of vegetable oil. After being extracted from cotton seeds by presses or by solvents, the oil is used as a salad oil, a cooking oil or a shortening or margarine. In the United States, cottonseed oil is primarily used as a salad or cooking oil. More than one billion pounds of cottonseed oil are produced yearly, placing the oil third in volume behind soybean oil and corn oil.
Cottonseed meal is valued as a source of protein for livestock, especially beef cattle, dairy cows and sheep. It provides three to six times the protein of most grains. The meal may be sold in the form of meal, cake, flakes or pellets. Some cottonseed meal is also used as a fertilizer for use on lawns, flower beds and gardens. Cottonseed meal competes with other protein meals like soybean meal and sunflower meal.
Used mainly as feed for livestock, cottonseed hulls serve as roughage rather than as a supplement. Their bulk makes shipping expensive, so the hulls are generally used in cotton-producing areas. Cottonseed hulls can also be used in petroleum refining and plastics manufacturing.
U.S. cotton exports were estimated at 11.1 million bales in 2011, down 3.3 million bales from 2010. China accounts for more than half of all U.S. cotton sales, followed by Turkey.
The United States has become an export-dominated market; the country imports very little cotton. Only 70 MT of cotton were imported in 2009, from Finland, France and China. Imports increased in 2010, reaching more than 400 MT and coming largely from Egypt. (FAS)
The 2008 Farm Bill continues to provide various government programs for upland cotton.The programs include the marketing loan program, direct payments, counter-cyclical payments and new average crop revenue election payments. In addition, the Federal crop insurance program aids cotton producers because it counteracts the effects of crop or revenue losses. The new Farm Bill also retains the special competitive provisions for ELS cotton.
The recent world recession initially reduced global trade in raw cotton and consumer demand for cotton products. However, demand has recovered more quickly than expected. This factor, in addition to others discussed in the Prices section of this profile, have contributed to recent increases in cotton prices and extraordinary price volatility. The United States has been especially responsive to the price jump. Major importers are trying to lock in supplies. (FAS 2011)
Trade policy has significantly affected clothing demand and production, which, in turn, has affected cotton fiber use, trade and production around the world. In 2005, world trade in clothing was dramatically changed when certain import quotas were ended. These quotas were part of the Multifiber Arrangement (MFA), an international trade agreement instituted in the 1970s. Removing the MFA quotas increased clothing imports by the United States and the European Union, reduced clothing and textile production in those countries and increased cotton imports and textile production in China, India and Pakistan. As imported cotton products increasingly replace U.S. goods, U.S. mills use less cotton and the U.S. textile industry continues its decline. However, U.S. clothing imports contain significant amounts of U.S.-grown cotton. (ERS 2007)
Agricultural Projections to 2021, Economic Research Service (ERS), USDA, 2012 - The Baseline Briefing Room provides 10-year baseline projections for the agricultural sector. Projections cover agricultural commodities, agricultural trade and indicators, such as farm income and food prices.
Annual Economic Outlook for Cotton, National Cotton Council.
Cotton, Briefing Room, ERS, USDA.
Cotton and Wool Outlook, ERS, USDA.
Cotton and Wool Yearbook: Dataset, ERS, USDA.
Cotton Backgrounder, ERS, USDA, 2007.
Cotton: World Markets and Trade, Foreign Ag Service (FAS), USDA.
Crop Production Annual Summary, National Ag Statistics Service (NASS), USDA.
Crop Values Annual Summary, NASS, USDA.
Global Ag Trade System, FAS, USDA.
National Cottonseed Products Association.
Links checked September 2013.