According to foreign news on April 1, analyst IlenaPeng said that US manufacturers’ demand for cotton is relentless and accelerating. At the time of the Chicago World’s Fair (1893), nearly 900 cotton mills were operating in the United States. But the NationalCottonCouncil expects that number to be only about 100 at present, with eight mills closing in the last five months of 2023 alone.
“With domestic textile manufacturing virtually gone, cotton farmers are less likely than ever to find buyers at home for the next harvest.” Millions of acres of cotton crops are being planted this month from California to the Carolinas.”

| Why is demand falling and cotton mills closing?

JohnMcCurry of FarmProgress reported in early March that “changing trade agreements, particularly the North American Free Trade Agreement (NAFTA), have been hugely disruptive to the industry.”

“Manufacturing executives have blamed the sudden closure of several recent plants on ‘insignificant,’ a word that by definition is insignificant or negligible, but in this case means anything but.” It refers to a trade policy loophole that allows duty-free imports of goods under $800. The national textile council (NationalCouncilofTextileOrganizations NCTO) said that with the popularity of electronic commerce, ‘the minimum mechanism is used in great quantities, make us market with several millions of duty-free goods’.”

“The NCTO blames the minimum mechanism for the closure of eight cotton mills in the past three months,” McCurry noted. “Cotton mills that closed include 188 Mills in Georgia, a state-owned spinning mill in North Carolina, Gildan Yarn Mill in North Carolina, and Hanesbrands knitwear mill in Arkansas.”

“In other industries, recent moves to boost reshoring have brought a wave of new manufacturing back to the U.S., especially when it helps ease shipping barriers and geopolitical tensions, such as semiconductors or industrial metals that are critical to developing domestic electric vehicle supply chains,” Peng reports. But textiles don’t have the same importance as’ chips or certain minerals. ‘” Although ErinMcLaughlin, senior economist at think tank ConferenceBoard, pointed out that the urgent need for protective gear such as masks during the COVID-19 pandemic underscores the importance of the industry.

| Cotton mill use is the lowest since 1885

The Economic Research Service of the United States Department of Agriculture (USDA) reports that “During the 2023/24 (August-July) period, U.S. cotton mill usage (the amount of raw cotton processed into textiles) is expected to be 1.9 million bales. If so, cotton use in U.S. textile mills would fall to its lowest level in at least 100 years. In 1884/85, about 1.7 million bales of cotton were used.”

According to the USDA Economic Research Service report: “Before the World Trade Organization (WTO) Agreement on Textiles and Apparel began to phase out textile and apparel import quotas in developed countries, the use of cotton mills in the United States rose and peaked again in the mid-1990s. By the early 2000s, the use of cotton mills increased in several countries, notably China. While U.S. raw cotton exports have benefited from increased demand from overseas mills, U.S. mills are using less, and this trend has led to projected U.S. mill use falling to near historic lows in 2023/24.”

GaryAdams, CEO of the National Cotton Council, said, “Government data show that more than three-quarters of the U.S. cotton supply will be exported this year, the highest share ever. An over-reliance on export demand makes farmers more vulnerable to geopolitical and other disruptions.”