As Cotton Prices Approach 15-Year High, Clothing Prices May Increase

jeansThe oft-ignored U.S. cotton market has been steadily gaining ground, and today cotton prices are nearing heights not seen in the last 15 years.

Natural disasters in top cotton-producing countries, coupled with an increase in demand for the commodity and a record crop year, spell good news for American cotton farmers. On Friday, the price per bale for December delivery hit $85 -- up from a $75 per bale price last month.

"The mills are screaming for cotton," said Mike Stevens, a cotton analyst and trader based in Manderville, La. "No doubt about it, it's a bull market for cotton. Prices have absolutely exploded."

The U.S. is the third largest producer of cotton in the world, next to China and India. Coming in at fourth is Pakistan, whose crops have been wiped out due to flooding. Last week, the U.S. Department of Agriculture World Agricultural Supply and Demand Estimates said cotton losses in Pakistan will reach 700,000 bales.

Another top producer, Russia, has been hit with fires and drought conditions.

Then there's an increase in global consumption. For the fifth straight year, production of the commodity will not keep up with demand, according to the USDA.

Both VF Corp. (VFC) -- a clothing giant whose brands include Lee, Wrangler, Rustler -- and jean maker Levi Strauss are expected to increase sales increases this year.

The U.S. cotton industry accounts for more than $25 billion in products and services annually, creating about 200,000 jobs in industry sectors from farms to textile mills. This year, the USDA projects the U.S. will produce 18.5 million bales of cotton, up from 12 million last year. About 85% of U.S. cotton is exported.

U.S. stockpiles totaled 3.1 million bales on July 31, the lowest level since 1996, USDA reported. China is already making deep forays into its reserves.

While higher prices are good news for farmers, that may mean consumers will pay more for T-shirts and jeans.
Traders and VF's CEO Eric Wiseman said the rally in cotton may subside in September, given the strong crop expected this year.

"History tells us that more often times than not, if an early season rally gets out of hand, we wind up having to deal with much sharper corrections that are considerably more difficult to deal with," Stevens said. "At some time in the next few months the pipeline will begin to refill, and prices will level off."

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cotton prices were incorrect in this article cotton is sold by the pound and the prices should have been 85 cents and 75 cents per pound not $85 and $75 per bale a bale weights 488 - 500 pounds, there fore the price of a bale would be from $414.80 - $425 when cotton is 85 cents per pound

August 22 2010 at 10:28 AM Report abuse rate up rate down Reply

Capitol Clothing Corp. manufacturers Fine Quality Children's clothing Proudly made In USA! Have pride in YOUR country and BUY American !

August 18 2010 at 5:12 PM Report abuse +1 rate up rate down Reply

The increase in Cotton prices is very bad for the Apparel Industry.Hopefully prices level off in the near future.

August 18 2010 at 5:05 PM Report abuse +1 rate up rate down Reply

I sure hope cotton prices continue to rise. Long ago cotton prices were very high, but northern mills did not want to pay the price, so they started a war. Perhaps the same thing will happen again, and the right side will win.

August 18 2010 at 2:59 PM Report abuse -2 rate up rate down Reply

Go to WWW. Made In The USA Forever.Com And you'll find materials and labor clothing 100% made in our Great America. Please God Make our people realize if we buy American we can bring Our Great Country Of America Back to It's Greatness. United We Stand.

August 18 2010 at 2:44 PM Report abuse +1 rate up rate down Reply

Go to WWW. Made In The USA Forever.Com and you'll find clothing made of !00% USA materials and made 100% in our Great Country Of America. Please God make people realize buy American and we will pull Our Wonderful Country Back To Be Pride To Be Americans Again.

August 18 2010 at 2:28 PM Report abuse +1 rate up rate down Reply

this is what is going to pull this economy out of the crapper . when the farmers make money it goes through the whole area i think this is great!

August 18 2010 at 2:01 PM Report abuse rate up rate down Reply
Gary Peitz

Gill....Cotton sells by the pound, 85 cents per pound not a bale. A bale is 500 of those 85 cent pounds or $425.

August 18 2010 at 10:08 AM Report abuse rate up rate down Reply
Gary F Kuhr

jamesnpost, wake up and smell the roses, You remind me of someone that voted for change and can't spell it. Cotton is the only natural fibre that keeps you warm in the winter and cool in the summer, and also is the most comfortable under garments available!!! Fact, not fiction. I am insulted that you have insinuated that farm workers are below you! What came first? The Plow or Fossil fuel? Farmers and thier associates are the salt of this earth!! Next time you sit down to eat, remember a farmer!!!! God Bless America

August 18 2010 at 12:18 AM Report abuse +4 rate up rate down Reply

Cotton should have been dumped years ago, right along with hemp, because it competes with the good petro-chemical synthetic fibers that are the flesh and bones of the American economy. Quit paying the dang cotton-pickers who just keep breeding welfare babies, and drill, baby, drill!

August 17 2010 at 9:42 PM Report abuse -1 rate up rate down Reply
1 reply to jamesnpost's comment

You should take your act on the road. Very funny.

August 18 2010 at 3:01 PM Report abuse -1 rate up rate down Reply