After breaking records in March, cotton prices have plummeted. That’s despite the fact that the top U.S. producers of cotton, Texas and Georgia, are in the midst of a severe drought.
When it comes to commodities it’s about supply and demand. And right now demand for cotton is down. Since June prices decreased 30-percent.
UGA cotton economist Don Shurley says that’s because U.S. farmers planted more, there’s lots of yarn in storage, overseas crops are strong, and Chinese manufacturers are using more synthetics.
“There is some of that substitution going on and that’s again due to the high prices that we’ve seen on cotton, and that’s part of the slowdown. That’s part of the market loss we had last year.”
Shurley says the market could rebound. Because of the drought Farmers planted late and will harvest into December, putting the crop at risk for a freeze.