The 2025 World Cotton Outlook highlights ongoing economic pressures and trade uncertainties, projecting a decrease in U.S. cotton acreage and harvested area, while anticipating modest growth in world cotton consumption and trade.
What were the main challenges for the U.S. cotton industry in 2024?
The U.S. cotton industry faced several significant challenges in 2024, including low prices, high production costs, and weak demand. These factors combined to make 2024 another difficult year for cotton growers. The economic pressures forced many growers to reconsider their planting decisions and strategies for the upcoming season.
What factors are influencing the planting decisions for the 2025 season?
As the 2025 season approaches, growers are confronted with tough planting decisions. Current prices remain below production costs for many crops, which adds to the financial strain on farmers. Additionally, potential changes in trade policy have created significant uncertainty in the world cotton market. This uncertainty makes it challenging for growers to plan effectively. The National Cotton Council (NCC) projects that U.S. cotton acreage for 2025 will be 9.6 million acres, a 14.5 percent decrease from 2024. This reduction reflects the economic difficulties faced by U.S. cotton growers, who are now in their third year of unfavorable market returns and an inadequate farm safety net.
What are the projections for the Cotton Belt harvested area, U.S. cotton crop, and U.S. textile manufacturing in 2025?
The Cotton Belt’s harvested area for 2025 is estimated at 7.8 million acres, with an abandonment rate of 18.4 percent in the U.S. Based on the five-year average yield for each state, the projected cotton crop is 13.9 million bales, including 13.5 million upland bales and 392,000 ELS bales. U.S. mills are expected to consume 1.73 million bales in the 2025/26 marketing year, up from 1.70 million bales in 2024/25. However, U.S. textile manufacturing continues to face challenges due to weaker trade within the Western Hemisphere, partly because of the increased textile imports under de minimis provisions.
How is the world cotton market expected to perform in the 2025/26 marketing year?
World consumption is projected to increase by 1.7% to 117.9 million bales in the 2025/26 marketing year. This increase in consumption, along with a larger U.S. supply, results in a higher U.S. export projection compared to 2024/25. Despite the higher export projection, U.S. ending stocks are expected to rise to 5.2 million bales in 2025/26. World production is estimated to decline to 117.2 million bales due to a slight reduction in harvested acreage and lower yields. With expanded consumption in key importing countries, world trade is projected to increase to 44.2 million bales in 2025/26. The combination of higher world consumption and trade, along with lower production, is expected to result in a decline in ending stocks to 77.7 million bales.
No matter how the market evolves, the NCC will persistently advocate for effective agricultural policies, programs, and trade agreements, while challenging impractical regulations to enhance the competitiveness of U.S. cotton industry members in the global market.
Additional details of the 2025 Cotton Economic Outlook are on the NCC’s website at http://www.cotton.org/econ/reports/annual-outlook.cfm.