50 Star US Inc.
According to a recent USDA estimate, the US is expected to produce 16.5 million bales of cotton in June, an increase of 14 percent over the previous crop year and 6 percent over the three-year average.
Recent rains in the Southwest region, which has enhanced moisture conditions for spring planting and decreased the abandonment of crop fields, is credited with this increase in productivity.
16.1 million bales are expected to be produced of upland cotton, exceeding the 14 million bales from the previous season. According to the USDA's Cotton and Wool Outlook report for June 2023, the extra-long staple (ELS) crop is expected to produce 400,000 bales as opposed to 470,000 bales the year before.
Despite the overall rise in production, lower cotton prices and higher prices for rival crops have led to diminished expectations for the cotton-growing region in the forthcoming 2023–2024 season.
The cotton-growing area decreased by 18% from the previous season, according to the USDA's poll of farmers' planting intentions in March, albeit it is still marginally above the level for 2021–2022.
As of June 11, just 81 percent of the anticipated cotton acreage had been planted, which is less than both the 89 percent of last season and the 86 percent average for the previous five years. Cotton's early growth has also lagged behind both the season in 2022 and the five-year average.
Based on a 10-year weighted average abandonment by region, the USDA estimates that 9.4 million acres of US cotton will be harvested in the 2023–24 growing season. The expected abandonment rate is 16%, which is far lower than the predicted 47% for 2022–2023.
In comparison to the previous year's record yield of 950 pounds per harvested acre, the anticipated cotton yield for the 2023–24 growing season is 841 pounds per harvested acre. This decline is mostly the result of significant drought-related losses in the lower-yielding Southwest region.
16.2 million bales of cotton are anticipated to be needed in 2023–2024 for mill use and exports combined, an increase of 500,000 bales from the May prediction.
Although it is anticipated that cotton exports will increase by over 8%, competition from other countries that also produce cotton will continue to restrain growth.
While the US is expected to continue to be the world's top exporter of cotton, countries like Brazil are expected to present greater competition due to their larger supplies on the international market. Consequently, it is anticipated that the US will account for 32% of world commerce.
In the 2023–2024 season, US cotton mill utilization is anticipated to rise by 10% (200,000 bales) to 2.2 million bales, albeit this would still be one of the lowest levels ever.
As the US continues to be a key exporter of yarn and fabric for the garment industry, lower cotton prices and shrinking worldwide yarn stockpiles are anticipated to increase US cotton mill utilization.
Last but not least, according to the USDA's June supply and demand projections, ending inventories of US cotton in 2023–2024 are anticipated to reach 3.5 million bales, up 300,000 bales (9%) from the starting point.
The stocks-to-use ratio is anticipated to be at 22%, which is about where it was over the previous two years.
Upland farm prices in the US are predicted to drop from an expected 82 cents per pound in 2022–2023 to 77 cents per pound in 2023–2024.
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