US Cotton Crisis Deepens as Brazil Overtakes Export Market
By jayesh chouhan 2026-07-30 13:35:08
US Cotton Crisis Deepens as Brazil Captures Export Customers
The financial crisis facing US cotton extends beyond merely weak agricultural prices; Brazil is attracting export customers who may never return. Bob Antoshak, Managing Partner at Gherzi USA, notes that the industry's long-term viability is threatened by projected producer losses and declining demand.
According to American Farm Bureau estimates, cotton production could incur losses of $342 per acre in 2026 and $406 per acre in 2027, potentially totaling around $3.8 billion. Six consecutive years of negative returns will strain farmers' working capital and likely increase reliance on operating loans.
The greatest threat lies in the reliance on exports. USDA projections indicate the US will export 12.3 million bales of cotton, while domestic mill consumption is expected to remain at just 1.6 million bales. Conversely, Brazil is poised to export approximately 15 million bales, driven by increased production, superior traceability, quality testing, financing options, and strong relationships with mills.
Global cotton demand remains sluggish due to polyester's growing market share and low profit margins at foreign spinning mills. Once mills accept the quality of Brazilian cotton and adjust their production processes accordingly, temporary trade agreements alone will not suffice to win back US business.
While emergency payments may offer some relief to farmers and the agricultural sector, they will not recover lost customers. The industry must focus on export incentives, buyer financing, quality consistency, traceability, and strengthening textile production capacity within the Western Hemisphere.
