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Summary of Report

Cotton Acreage Gains of Past Decade
Reverse 60-Year Decline

AER-739, July 1996

The United States produces nearly 20 percent of the world's cotton and ranks second to China as the largest producing country. While over 80 countries produce cotton, the United States, China, India, Pakistan, and Uzbekistan (former Soviet republic) produce about 74 percent of the total world cotton supply.

Total harvested acreage in the United States has dropped by more than 25 percent since 1960, but growers have maintained and even increased production levels because of sharply higher yields. U.S. cotton producers have experienced excess production capacity, high stocks, and low product prices over the years. Since 1986, however, strong consumer demand and export sales, combined with an effective government cotton program, have boosted cotton industry prospects. Currently, both cotton production and use are at near-record levels, with supply and demand in closer balance than in many years.

The Cotton Industry in the United States, a new report from USDA's Economic Research Service, describes all components of the U.S. cotton industry from producers to consumers and provides a single source of economic and statistical information on cotton. It identifies and describes the structure and performance of the cotton industry, emphasizing the production, marketing, and consumption of raw cotton and cotton products. It also includes a historical overview of Federal farm programs affecting cotton supply and demand.

Seventeen States produce cotton, with major concentrations in the Delta area of Mississippi, Arkansas, and Louisiana; the Texas High and Rolling Plains; central Arizona; and California's San Joaquin Valley. Upland cotton accounts for 98 percent of the U.S. crop and is the most commonly grown cotton in other countries. Extra-long staple (ELS) cotton, also known as American Pima cotton, is grown in California, Arizona, New Mexico, and limited areas of west Texas.

Fewer but bigger farms dominate cotton production. In 1949, 1.1 million farms harvested an average of 24 acres of cotton each. In 1992, 34,800 farms harvested an average of 315 acres of cotton each. Despite this more than tenfold growth in average size, individuals or family businesses control about 75 percent of the cotton farms.

U.S. cotton production has shifted westward. From 1970 to 1985, production in California and Arizona as a share of total U.S. production almost doubled from 16 percent to 31 percent. Lower unit costs of production, higher net returns in relation to other crops, flat terrain, good soils, and the availability of irrigation water in the Southwest and West were the primary reasons for the shift. However, this movement has stabilized recently, and an increasing share of U.S. cotton acreage is moving back into the Southeast and Delta States. Improved insect control programs and higher relative net returns for cotton fiber versus other crops have encouraged this movement.

Cotton has been a major cash crop and an important source of foreign exchange in the United States for almost 200 years. Although the United States has usually been a competitive exporter of raw cotton, other countries, many of them also cotton producers, are more competitive as exporters of finished products. Since 1960, developing countries in Asia have become major importers of raw cotton for their increasing domestic demand and for their growing textile industries producing cotton fabrics and apparel for export. As a result, the United States has experienced a significant textile and apparel trade deficit.

Cotton lint is used in apparel, household, and industrial products. Cotton accounts for about 64 percent of all fibers used in apparel, 25 percent in home furnishings, and about 11 percent of the fibers in industrial products. Americans used 76 pounds of fiber per capita in 1993, which includes products produced by U.S. mills and the raw fiber content of imported textiles. Consumption of manmade fibers in all uses totaled about 43 pounds per capita in 1993, compared with cotton at 29 pounds. The remaining 4 pounds were divided among wool, linen, and silk.


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