SAN ANTONIO Fiber quality, consumer demand and competitive pricing are the three keys to success and profitability for U.S. cotton producers, said Dr. Mark Lange of Memphis, Tenn., the director of economic and information services for the National Cotton Council.
Lange spoke during the opening session of the 2000 Beltwide Cotton Conferences here, which has drawn as many as 4,500-plus producers, researchers and agribusiness representatives.
“U.S. consumers use almost 24 percent of the world’s total annual cotton consumption we use more cotton per capita than any other country in the world,” he said. “Unfortunately, cotton’s market share as the material of choice for world textile use slipped from 48 percent in 1989 to just under 40 percent in 1999. While cotton use in the rest of the world in declining, consumption in the U.S. is expanding and that affects our growers.”
Lange reminded producers that breeding, agronomic practices, weather, ginning, processing, storage and economic incentives all affect fiber quality. Preserving and improving fiber quality is a never-ending challenge for all segments of the cotton industry, he said.
“Some people argue that textile mills are never pleased, or are insatiable, when it comes to fiber quality. But we should keep in mind that technology continues to push the envelope of fiber processing,” Lange said. “Consequently, cotton lint qualities must keep abreast of technological demands or we will see our world markets fall away.”
Consumer demand, the second key to success, is alive and well, the economist noted, thanks to Cotton Incorporated’s highly successful market promotion programs and its textile, fashion and consumer research in North America. The NCC’s Cotton Council International works in the foreign arena to boost demand, promoting U.S. cotton and cotton products throughout Europe, Asia and South America.
The U.S. cotton industry’s competitive price position, Lange’s final key to long-term success and profitability, is achieved in part through the Upland cotton marketing loan and renewed Step 2 funding for export sales enhancement.
“With restoration of Step 2 funds last October by Congress, U.S. mill customers will again see prices for their raw cotton that are generally comparable to world prices,” Lange said. “Since October, raw export sales registrations have pushed expectations for U.S. cotton exports in 1999-2000 closer to our historical world market in spite of weak international cotton demand.
“Ultimately, for our industry to grow and remain profitable, our cotton fiber has to work with the equipment and fashions adopted by the world textile industry. Our fiber must also be sought by consumers and then priced to move in world markets.”
Lange said there are cycles in fiber use and fashion, just as there are cycles in supply, demand and prices. He said recent trends in fiber consumption may imply something about future market conditions.
“Maintaining our position as the pre-eminent producer and supplier of quality cotton fiber won’t be easy, but it is essential to our future success and profitability,” the economist said. “We must continue to support fiber quality research and market enhancement programs that key on consumer and mill demand.
“Lastly, in a world market replete with subsidies that affect virtually every stage of cotton production and textile processing, we must continue to partner with government in order to achieve competitive pricing in world markets and to protect our domestic market infrastructure.”