Domestic demand for cotton is shrinking, so much so that U.S. cotton consumption this year will be the smallest since the 1890s, according to the USDA. In its monthly WASDE report, the USDA estimates usage at 3.1 million bales in the marketing year that ends on August 1, down by 4 percent from the previous year.
Cotton was one of the first crops to be included in USDA’s monthly crop reports, which date from 1863. But consumption data is more esoteric than acres planted to cotton or bales picked, so USDA had no immediate word on when in the 1890s U.S. cotton usage was smaller than the 3.1 million bales forecast this year.
For decades, the vast majority of U.S. cotton has been exported. For example, 15 million bales of the 18.4 million bales harvested last year are expected to be exported. The Cotton: World Markets and Trade report, issued in conjunction with WASDE each month, says U.S. cotton shipments to NAFTA neighbor Mexico are trending lower for the third year in a row. The United States dominates cotton trade with Mexico but exports are falling because Mexico’s cotton crop is getting bigger, meaning it has more cotton to use at home and to export. “A successful outcome resolving U.S.-China trade tensions could also reduce Mexico’s export opportunities, increasing pressure to use cotton domestically,” wrote USDA analysts.