MEMPHIS, Tenn. – National Cotton Council economists point to a few key factors that will shape the U.S. cotton industry’s 2026 economic outlook. 

Overall, 2025 was another challenging year for the U.S. cotton industry due to low prices, high production costs, and weak demand. As the 2026 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 2026, 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. Stable to slowing economic growth is projected for the next two years.

In her analysis of the NCC Annual Planting Intentions survey results, Dr. Jody Campiche, the NCC’s Vice President, Economics & Policy Analysis, said the NCC projects 2026 U.S. cotton acreage to be 9.0 million acres, 3.2 percent less than 2025. Survey results reflect the economic situation of U.S. cotton growers who are currently facing a fourth year with unfavorable market returns. 

As compared to average futures prices during the first quarter of 2025, all commodity prices during the 2026 survey period were lower, but cotton experienced the largest decline. As a result, the price ratios of cotton to corn and soybeans were lower than in 2025. 

Cotton Belt harvested area is estimated at 7.1 million acres for 2026 with a U.S. abandonment rate of 21.3 percent. Using average state-level yields generates a cotton crop of 12.7 million bales, with 12.3 million upland bales and 393,000 ELS bales.

U.S. mills are expected to consume 1.55 million bales in 2026 as compared to 1.60 million bales in 2025. U.S. textile manufacturing remains under pressure. 

For the 2026 marketing year, world consumption is projected to increase by 1.0 percent to 120.0 million bales. The projected increase in world consumption along with lower world production results in a larger U.S. export projection as compared to 2025. With the higher export projection, U.S. ending stocks are projected to decrease to 3.5 million bales in 2026. 

Campiche said world production is estimated to decline to 114.1 million bales in 2026 due to a lower harvested acreage and lower yields. With expanded consumption in key importing countries, world trade is projected to increase to 44.6 million bales in 2026. For the 2026 marketing year, higher world consumption and trade combined with lower production result in a decline in ending stocks to 69.8 million bales. If realized, this would be the lowest level of world ending stocks outside of China since 2016.

If world consumption can overcome the headwinds from the sluggish global economy and cheaper man-made fibers, declining stocks in the 2026 balance sheet could provide some support for prices.

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 tariff policy can dramatically alter the trade landscape.

Additional details of the 2026 Cotton Economic Outlook are on the NCC’s website at http://www.cotton.org/econ/reports/annual-outlook.cfm.