June 21, 2001
Contact:
Marjory Walker
(901) 274-9030
MEMPHIS - A National Cotton Council of America analysis shows that the entire U.S. cotton infrastructure is being undermined because of the U.S. textile industry's economic crisis.
Dr. Mark Lange, a NCC economist who authored the report, said a surge in imported cotton products to the U.S. has decimated U.S. textile mills.
"The U.S. textile industry is vanishing from our economic landscape," he said. "This decline not only is harming textile workers and ancillary industries but is damaging our natural fiber producers and the rural economy."
Lange, who serves as NCC's vice president, policy analysis and program coordinator, says it is imperative that U.S. agricultural and trade policy recognize the fundamental economic relationship between the U.S. textile and cotton production sectors and "discover policies that can address the imbalances wrought by external economic forces or distortions in foreign industrial policies that damage U.S. manufacturing and agricultural interests."
The report noted that U.S. mill cotton use, which declined from 11.4 million bales in 1997 to 9.5 million bales in 2000, is projected at only 8.5 million bales for 2001. This reduction comes as imports of foreign- manufactured textile and apparel products made from foreign cottons are growing at a staggering rate. These averaged 5.6 million bale equivalents between 1993 and 1996, but soared to 10.6 million bale equivalents in 2000.
Lange said the decline in U.S. mill demand for raw cotton directly impacts the economic health of the other U.S. cotton industry sectors, as the industry's infrastructure is dependent on the volume of business conducted between these sectors. U.S. cotton prices also have fallen amidst this usage decline. In early June 2001, the futures price of cotton is 41 cents, just one-half of the value at the time the 1995 farm law was passed.
"Combined with the difficulties stemming from highly variable raw cotton export opportunities, U.S. futures market values have fallen steeply and U.S. cotton growers are facing prices well below USDA's estimated cost of production," Lange said.
Lange said U.S. textiles are in this calamitous state despite being the world's most efficient textile industry. For example, although the number of active U.S. spinning positions has fallen by more than one-half in the past 20 years, the pounds of cotton used per position have increased seven-fold, from 200 pounds in 1980 to an estimated 1,400 pounds by 2000.
The industry also is one of this nation's most innovative and productive with gains only having been surpassed by the U.S. electronics and computers industries.
"The (textile) items produced today use computer-aided design with high-tech imagery for shaping and color, scanners and inventory management processes for streamlining just-in-time deliveries and widely recognized environmental programs for product recycling and air quality control," Lange noted.
The Memphis-based NCC's mission is to ensure the ability of all U.S. cotton industry segments to compete effectively and profitably in the raw cotton, oilseed and manufactured product markets at home and abroad.
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