In many areas of the South, cotton is king. It’s a dependable crop, and in turn, it’s made farmers loyal to what they grow. But with cotton prices falling below farmers’ breakeven, that crop is causing financial pain to even grow.
“I’ve been farming for 48 years, and I can’t remember anything in a year that’s been as challenging as the way it’s been the last couple of years,” says Franz Rowland, who grows cotton in Boston, Ga.
The south Georgia farmer says cheap cotton prices are one problem, and skyrocketing input costs are another.
“We’re going to plant cotton and don’t even have a clue if we’re going to get our money back,” he says. “There’s no farm bill to support us, and the reference price is so low that it’s not anything that we can depend on. So, we’re going to put several million dollars in the ground and don’t even know if we’re going to get it back.”
Cotton is a high input crop that requires a heavy dose of fertilizer and intensive pest and weed management. But in addition to that, today’s cotton farmers are dealing with the rising cost of equipment.
“It used to be a cost, but it wasn’t a terribly high cost. And today, one of the highest costs we have is machinery,” Rowland says. “Cotton pickers are over $1 million. And nobody makes a cotton picker but John Deere. So, we don’t have a choice.”
The Death of Agriculture in West Texas?
It’s a situation that’s not unique to just south Georgia, though. Cotton farmers across the entire U.S. are grappling with the same uneasiness of growing cotton in 2025. In West Texas, it’s especially hard.
The West Texas area is critical for cotton production. USDA shows Texas growers produce 42% of the country’s cotton. The area surrounding Lubbock, Texas, is known as the largest cotton patch in the U.S. And right now, nearly 68% of Texas is dealing with some level of drought.
“It feels like the death of agriculture somewhat in our area. Dryland farms really don’t pencil out on hardly anything,” says Heath Heinrich, a cotton and sorghum farmer located south of Lubbock in Slaton, Tex. 
“It feels like the death of agriculture somewhat in our area. Dryland farms really don’t pencil out on hardly anything,” says Heath Heinrich, a cotton and sorghum farmer located south of Lubbock in Slaton, Tex.
Heinrich grows cotton, sorghum and wheat just south of Lubbock, Texas, and he says it feels like a losing battle for farming in his area this year.
“We’re surrounded by political movements. We’re surrounded by tariffs, by markets, and then Mother Nature and business on top of it,” Heinrich says. “And it’s like we are trying to battle so many fronts right now that it’s hard to tell if we’re gaining any ground, you know, or if it’s leading to our demise.”
Drought has gripped Heinrich’s area for multiple years. It’s so dry they’ve struggled to even get the wheat that was planted in the fall to grow this past winter.
“We’re still waiting on the seed to sprout on two-thirds of our stuff,” Heinrich says.
Beyond Losing Money
As president and CEO of National Cotton Council (NCC), Gary Adams sees and hears the somber situation for U.S. cotton farmers from coast to coast. Adams says the outlook for 2025 is even worse than 2024.
“We’ve gone beyond just losing money now that we’re to the point of losing the farm. Unfortunately, where the industry is, that’s what it looks like as we’re going into 2025,” Adams says.
Adams says there’s a lot to unpack in explaining why cotton prices are so low, but the biggest reason is dwindling demand.
“If we look at world mill-use for cotton, it’s estimated right now around 117 to 118 million bales. Well, you don’t have to go too far back to see when we were consuming 123 million bales,” Adams says.
China Moves Away From U.S. Cotton
The biggest reason for the drop in world demand, according to National Cotton Council, is more competition from man-made fibers.
“You look at polyester production in China right now, they produce probably somewhere on the order of about 225 to 230 million bale equivalents. They’re almost twice the size of global cotton demand,” Adams says.
At the same time, big cotton producers, such as Brazil and Australia, are staring at big crops, which is helping global competition for the smaller market that’s left.
“We are an export-dependent industry,” Adams says. “About 85% of our cotton production is going to the export market. A strong dollar doesn’t help that competitiveness either.”
China is still a larger buyer of U.S. cotton, but there are two reasons they are buying less than they used to:
- The switch to synthetic, man-made fibers
- The last trade war
“If we go back to 2018, China was buying about 3 to 4 million bales. All of a sudden, we immediately saw the market share the U.S. had go from about 42% to 17%, and prices went from the mid-80s down into the mid-60s. We’re already starting in a depressed situation in terms of where market prices are compared to where they were.”
With so much focus on trade in Washington this week, NCC wants the Trump administration to enforce trade agreements already in place.
“A big concern we have is that you have non-qualifying product that comes in from third countries that should not be reaping the benefits of the trade agreement,” Adams says.
Some of the biggest offenders, according to NCC, are India, Pakistan and China.
“When you look at the trade date of the imported product coming in, there’s probably some Chinese, Indian and Pakistan yarn and fabric coming into those countries and then likely making its way into the U.S. in a finished good as a duty-free product,” Adams says. “That’s really where you’ve got to crack down because it ought to be either U.S. fiber or yarns produced in the region that allow you to gain the duty-free access into the U.S. market.”
Drumming Up New Domestic Demand
The cotton industry hopes to also capitalize on the momentum from the president’s America First Agenda, as one of the big domestic issues is not as much American-grown cotton is being milled here, either.
- In 2004, 6.7 million bales were used by U.S. cotton mills
- In 2024, that dropped to 1.7 million
- That equals a nearly 75% decline in the past 20 years.
One way NCC hopes to help revive the U.S. cotton industry longer term is by boosting domestic demand.
“As an industry, we are looking at some opportunities to perhaps use tax credits to reward the use of U.S. cotton in the supply chain by a brand and retailer. In other words, add some additional value to pull U.S. cotton through to the end product,” Adams says.
Farm Bill is No. 1 Priority
In the short-term, the NCC is pushing Congress to complete a new farm bill - one that applies to the 2025 crop.
“I just can’t state this strongly enough: We have to have a farm bill done by Congress this year that applies to the 2025 crop,” Adams says. “The economic assistance that was approved in the end-of-year package last year was a critical lifeline that’s allowing a number of producers to continue to get financing, but it was simply a short-term fix. It doesn’t address the 2025 crop. That’s why we’ve got to have something that helps meet some of the financial needs that producers are under right now.”
That dire plea for a farm bill is being echoed by cotton farmers, as well.
“We have to have a farm bill. Farmers can’t survive without a farm bill,” Rowland says. “The government came up with disaster and emergency relief programs, and that’s fine. But to hang your hat on something, so to speak, we’ve got to have a farm bill with reference prices that are current to the input costs.”
Rowland says the cotton industry is to a point that they are already seeing younger producers get forced out due to the lack of financing.
“What I hear from the younger guys is they’re having a really hard time getting financed. They can’t pay back the 2024 operating loan, so the banks are not wanting to go with them again in 2025,” Rowland says. “The money we got here lately from the government helped a lot, but it didn’t solve the problem.”
Rowland says the current farm bill is irrelevant, even calling it “worthless” for cotton.
“Without a farm bill, sooner or later, we’re going to be doomed,” he says.
Excitement for 2025 is Gone
Typically, planting season is one of the most exciting times of the year for Rowland, and one that signals hope and new beginnings. But this year, that excitement is gone.
“Typically my adrenaline starts going. I get all excited about making a crop and putting in a crop, and this year is completely different,” he says. “It’s just hard to get motivated to spend this money. I just spent $50,000 today on fertilizer and chemicals. Am I going to get that back? So, I’m not excited about it at all.”
Rowland says if prices don’t improve this year, it’s not just the fact he won’t be able to cover the high input costs he’s already paid, he says he could be staring at losses in the millions.
Πηγή: agweb.com