The economic situation that chopped cotton acreage and suppressed prices for the crop the past couple of years will likely continue in 2009.
Analysts at the Beltwide Cotton Conferences in early January said it is likely cotton acreage will continue to slip—even in Texas, now home to half the nation's cotton crop.
Textile mill use is expected to drop 5.5%, the biggest single-year textile tail-off in history, USDA says. China, with 40% of the world's mill output, expects its first decline since 1998.
Reduced oil prices make man-made fibers more competitive. In early January, the cotton/polyester ratio rose to 160% in China.
A number of U.S. cotton farmers already have unsteady financial footing. Mark Lange, National Cotton Council president and chief executive officer, said many were hurt when cotton merchant Paul Reinhart, Inc., filed for Chapter 11 bankruptcy on October 15 when the company was unable to meet margin calls. Reinhart says it had about 450 "unperformed” contracts with farmers and merchants around the U.S.