While cotton was a primary source of bacon for most growers’ wallets last season, the same cannot be said for 2022. U.S. cotton growers are struggling with severe drought, prompting many to abandon almost a third of planted acres across the country. USDA reduced its cotton acreage by nearly 600,000 to a total of 8.55 million. The drop indicates that 32% of cotton acres will be abandoned this year.
The cotton market challenges underscore larger head turns on overall economic health, as concerns grow over a global recession and slowing consumer demand. With high-interest rates come a higher U.S. dollar value, which is currently trading at 20-year highs. This serves as a headwind for export-dependent crops like cotton. To add insult to injury, USDA lowered global cotton demand by 1.6 billion bales.
Read more on cotton markets here.
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