National Cotton Council economists point to a few key factors that will shape the U.S. cotton industry’s 2025 economic outlook.
Overall, 2024 was another challenging year for the U.S. cotton industry due to low prices, high production costs, and weak demand. As the 2025 season approaches, growers are facing difficult planting decisions as current prices remain below production costs. While an improvement in world cotton demand is anticipated for 2025, potential changes in trade policy have created significant uncertainty in the world cotton market.
The outlook for the world cotton market will, in part, be determined by continued expansion in economic activity. Modest economic growth is projected for the next two years, but the projected growth rates are still well below the recent historical average.
In her analysis of the NCC Annual Planting Intentions survey results, Dr. Jody Campiche, NCC Vice President, Economics & Policy Analysis, says the NCC projects 2025 U.S. cotton acreage to be 9.6 million acres – 14.5% percent less than 2024. Survey results reflect the economic situation of U.S. cotton growers who are currently facing a third year with unfavorable market returns and an inadequate farm safety net.
Compared to average futures prices during the first quarter of 2024, all commodity prices were lower during the survey period, but cotton experienced the largest decline. As a result, the price ratios of cotton to corn and soybeans were lower than in 2024.
Cotton Belt harvested area is estimated at 7.8 million acres for 2025 with a U.S. abandonment rate of 18.4%. Using the five-year average yield for each state generates a cotton crop of 13.9 million bales, with 13.5 million upland bales and 392,000 ELS bales.
U.S. mills are expected to consume 1.73 million bales in 2025/26 as compared to 1.70 million bales in 2024/25. U.S. textile manufacturing remains under pressure from weaker Western Hemisphere trade due in part to the impacts of increased textile imports under de minimis provisions.
For the 2025/26 marketing year, world consumption is projected to increase by 1.7% to 117.9 million bales. The projected increase in world consumption along with a larger U.S. supply results in a larger U.S. export projection as compared to 2024/25. Despite the higher export projection, U.S. ending stocks are projected to increase to 5.2 million bales in 2025/26.
Campiche says world production is estimated to decline to 117.2 million bales in 2025/26 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. For the 2025/26 marketing year, higher world consumption and trade combined with lower production result in a decline in ending stocks to 77.7 million bales.
While current projections show a slight increase in the U.S. share of world exports for the 2025/26 marketing year, Brazil is projected to continue as the largest exporter for the third year.
Campiche notes that current economic projections for the U.S. and global economies should be viewed with caution given the potential impacts of increased geopolitical tensions and changes in trade policy. The U.S. cotton industry is an export-oriented industry, both for raw fiber as well as cotton yarns and fabrics, and tariffs have the potential to dramatically alter the trade landscape.
Additional details of the 2025 Cotton Economic Outlook are available on the NCC’s website.
Information from the National Cotton Council
Source: cottongrower.com