US’ cotton production is projected to reach 16.5 mn bales in June a 14 percent increase (or 2 mn bales) from the 2022-23 crop, and 6 percent above the three-year average, according to a report by US Department of Agriculture (USDA). This boost comes on the heels of recent rainfall in the Southwest region, which has enhanced the moisture conditions necessary for spring planting and reduced the abandonment of crop fields.
The upland production estimate stands at 16.1 mn bales, rising from last season’s 14 mn bales. The extra-long staple (ELS) crop projection is estimated at 400,000 bales, down from the previous year’s 470,000 bales, as per USDA’s Cotton and Wool Outlook: June 2023 report.
Despite an overall increase in production, expectations for the cotton-growing area for 2023-24 have been lowered due to reduced cotton prices and increased prices of competing crops. The USDA’s March survey of farmers’ planting intentions revealed an 18 percent reduction in the cotton area from last season, although it remains slightly above the 2021-22 level.
As of June 11, 81 percent of the forecast cotton acreage was planted, a decrease from last season’s 89 percent and the 2018-2022 average of 86 percent. Early cotton development has also been slightly below both 2022 and the five-year average.
The USDA anticipates that 9.4 mn acres of US cotton will be harvested in 2023-24, reflecting a 10-year weighted average abandonment by region. The abandonment projection stands at 16 percent, a significant reduction from the 47 percent in 2022-23. The cotton yield for 2023-24 is forecast at 841 pounds per harvested acre, which falls below the record 950-pound yield of the previous year due to significant losses of lower-yielding Southwest area owing to a severe drought.
Projected cotton demand, combining exports and mill use, for 2023-24 stands at 16.2 million bales, a 500,000 bales increase from the May forecast. Although cotton exports are expected to rise by nearly 8 percent, competition from other cotton-producing nations will continue to limit growth.
The US is set to remain the world’s leading cotton exporter, but other countries like Brazil are anticipated to present increased competition with larger supplies in the global market. As a result, the US share of global trade is forecast to dip slightly to 32 percent.
US cotton mill use is expected to rise by 10 percent (200,000 bales) to 2.2 mn bales in 2023-24, despite still being one of the lowest levels on record. Lower cotton prices and decreasing global yarn inventories are expected to boost US cotton mill use as the country continues to be a major exporter of yarn and fabric for apparel production.
Finally, the USDA’s June supply and demand estimates indicate that 2023-24 US cotton ending stocks are projected at 3.5 mn bales, 300,000 bales (9 percent) above the beginning level. The stocks-to-use ratio is projected at a relatively low 22 percent, similar to the last two years. The 2023-24 US upland farm price is forecast to decrease from an estimated 82 cents per pound for 2022-23 to 77 cents per pound.
