The Comeback of Cotton: Demand Claws Back as Sustainably Grown Cotton Wins Over Clothing Companies

Cotton prices have been on a rollercoaster ride this past year. The start to 2021 showed a story of improved prices, which is  a dramatic change from just a year ago. Last year, at the height of the COVID-19 pandemic, cotton prices produced pain for growers.

“It's been a wild ride,” says Brad Warren, a farmer in southeast North Carolina.

The North Carolina farmer says the COVID-19 pandemic had a devastating impact on cotton prices.

“It was very depressing last year,” Warren adds. “Last year, we thought we were going to where we are this year, but with COVID, demand shrank, there was just nothing there. No buyers. So, the price went down. I don't think anybody saw what was coming this fall as prices increased.”

National Cotton Council (NCC) CEO Gary Adams says at one point last year, consumer spending on clothing and textiles dropped 85% as more consumers stayed at home and didn’t have a reason to buy new clothes and textiles.  

“It certainly bounced back from the lows that we saw back in probably the summer and early fall,” says Adams. “Now spending for clothing, textiles and home goods, that's still running about 10% below where we would have been say a pre-COVID level.”

Adams says as shoppers regain confidence again, it’s having a positive impact on domestic demand.

“Right now, they've clawed some of that demand back,” says Adams. “But if we would have gone in talking about pre- COVID levels of consumption of around 3 million bales, we would probably say right now we're consuming at a rate of about two and a half million barrels a year.”

Still 15% to 20% below pre-COVID demand levels, it’s a trend moving in the right direction, as international appetite is also growing.

“We did see a lot of purchases in China in 2020,” Adams says. “In fact, of just U.S. cotton, it was about 5.5 million bales, so China reestablished itself as the largest export market for U.S. cotton.”

Cotton’s Sustainability Story

Adams says cotton farmers were a big beneficiary of the phase-one agreement with China. But as geopolitical issues play out, U.S. cotton could become the world’s cotton of choice.

“Most of the cotton is grown in a few places: the U.S., India, Pakistan, China, those are pretty much the big players,” says John Payne, author of 'This Week in Grain.'

China, the world’s largest cotton producer, is now facing turmoil. Headline after headline shows a controversy unfolding, as H&M group- the world’s second largest clothing retailer, said last year it would stop buying cotton from the Chinese territory of Xinjang over forced labor concerns.

“You have this Chinese human rights issue where a lot of this cotton production is taking place, folks on the more progressive side of the of the U.S. consumer industry are not wanting to use that supply,” says Payne. “Well, that's a fifth of the global supply. So you're saying ‘Hey, OK, now we're not going to use that cotton, we need to use everybody else's now,’ and they're going to compete for U.S. supply and sustainable production.”

Adams says while tensions between the U.S. and China are still there, the forced labor issue could play in favor of the U.S..

“One of the messages we tried to say is obviously U.S. cotton could be an option and an alternative, given the labor requirements in the United States, given the laws and regulations that we operate under,” Adams says. “We certainly feel like that can be an option.”

As the opportunity sprouts to sell more cotton, U.S. cotton farmers say they already have a sustainability story to share.

“We believe being able to demonstrate that sustainability story is part of what we need to do to ensure that demand base, and fortunately, we've got the data to be able to tell that story,” Adams adds.

While NCC says additional data will be required to effectively show U.S. cotton’s sustainability story, the compelling story already playing out in farm fields.

“I do think we have a head start on that and are able to jump right into that and capitalize on what they're looking to push,” Warren says.

From the NCC’s U.S. Cotton Trust Protocol, to cotton seed brands creating their own sustainability programs, cotton initiatives today are focused on tracing cotton from the farm, all the way to the clothes consumers buy and wear.

“If we can show the traceability of this cotton all the way back to the acre and prove to that consumer they are getting an American grown and manufactured product, that creates a definite premium in the marketplace,” Fennell says.

As cotton farmers’ share their story, it’s one that’s ripe with pride.

“You feel like you're almost singled out or lucky to be able to grow it where you are,” says Warren.

“There's a sense of pride that comes with being a cotton farmer and the proud of the of the people out here in West Texas,” says Blake Fennell, a farmer in Earth, Texas. “It's second to none. It's just pretty hard to explain.”

Cotton that’s American grown and American made; a story of pride that cotton farmers will tell you is just the cotton way.