Significant uncertainty in the global economy has hampered an anticipated rapid recovery in cotton demand.

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 2024 US cotton acreage to be 9.8m acres, 3.7% less than 2023. Growers are facing difficult planting decisions as current prices fall short of production costs for many producers.

As compared to average futures prices during the first quarter of 2023, all commodity prices were lower during the survey period, but cotton had the smallest decline. As a result, the price ratios of cotton to corn and soybeans were higher than in 2023. Based on historical price relationships, this would generally suggest an increase in cotton acreage. However, the 2024 crop year could go against that relationship due to high production costs relative to current prices.

Between the survey period and mid-February, cotton prices have increased, while corn and soybean prices have both declined increasing the cotton-to-corn and cotton-to-soybean price ratios. The recent improvement in the price ratios could result in final cotton acreage higher than reported in the NCC survey.

US mills are expected to consume 1.85m bales in 2024/25 as compared to 1.75m bales in 2023/24. US textile manufacturing remains under pressure from weaker Western Hemisphere trade due to concerns about the impacts of increased US textile imports under de minimis provisions. Between August and December 2023, eight US textile manufacturing facilities shut down operations.

For the 2024/25 marketing year, world consumption is projected to increase by 2.6% to 115.3m bales. The projected increase in world consumption along with a larger US supply results in a larger US export projection as compared to 2023/24. US ending stocks are projected to increase slightly to 2.9m bales in 2024/25.

Campiche said world production is estimated to increase to 115.1m bales in 2024/25 due to an increase in harvested acreage. Overall, the outlook for world cotton demand for the 2024/25 marketing year takes on a more positive tone as the economic outlook has improved in the past month. With expanded consumption in key importing countries, world trade is projected to increase to 43.4m bales in 2024/25. For the 2024/25 marketing year, higher world production, consumption, and trade result in a slight decline in ending stocks to 83.5m bales.

While the US is projected to remain the largest exporter in 2024/25, Brazil is just slightly behind the US in export sales. The US will continue to face very strong export competition from Brazil. Given the recent trends in exports from the two countries, Brazil is on track to become the largest cotton exporter in the very near future.