Auburn Alumni Provides Insight on World Cotton Market

With the uncertainty that has come with the COVID-19 pandemic as well as the transition of power from the Trump Administration to that of President Biden, the agricultural community sits in anxiety to see how foreign trade will impact crop export prices, especially cotton.

An interview with Lee Rivenbark has allowed for some insight into the coming selling season. Rivenbark, a Columbia, Alabama, native, received his degree in agricultural economics from Auburn University before serving as both the head of global cotton and also the head of international sales of North American seed for Bayer AG.

The current price of cotton per pound is listed as $1.15 per pound, with the yearly projection predicted as 90 cents. While lower than current levels, this could bode well for farmers in the coming year.

While there is a projected 15 to 25% increase in acreage this coming year, Rivenbark says that the biggest issue is that “world consumption is outpacing production.”

Demand has “gone through the roof” from buyers such as China with the world’s largest cotton producers—including India, Australia, and the United States—having a deficit in cotton.

India, according to Rivenbark, is restricting cotton exports due to the high demand for the coveted crop. While they are “hot on cotton,” planet earth’s largest cotton producer is trying to restrict trade in order to keep it for their 1.38 billion residents.

Another large factor for cotton prices is hinging on transportation. Across all sectors of sales in the economy, the supply chain has been a chokehold on American production lines. This has been extremely evident for the agricultural sector.

From California to Virginia, known as the Sunbelt, the transportation of cotton and other crop commodities has become extremely hard with the lack of workers in transportation.

Rivenbark and his sources have predicted that even though price estimates are lower than the current level, cotton may very well overtake corn as the United States’ largest cash crop in the coming year.

“With international production lower than usual, now is the chance for American farmers to capitalize and produce the fiber full of promise for international consumers,” Rivenbark said.