Tropical Storm Fred has cotton farmers looking for the extra spin cycle button to dry things out.
The storm also struck economists with a mild case of supply fears, leading cotton prices to reach levels not seen in 10 years.
Add this to the mix: Prior to the fears of Fred, the USDA threw a curveball and cut yield and production expectations for this growing season.
In the report, they placed U.S. production for 2021 at 17.25M bales. Although lower than earlier estimates, that’s still an 18% increase over last year.
It’s not often that both supply and prices are expected to be higher, but last year’s ending stocks were low, thanks to decreased 2020 production and strong demand.
That demand has continued to strengthen in 2021 across the globe, so when the market doubted how big this year’s crop would be, prices jumped.
How high? The USDA expects farmers to see a price of 80 cents per pound, which is 13 cents higher than last year.