The Van Trump Report

Brazil Close to Unseating US as Top Global Cotton Exporter

US cotton producers are warily eying Brazil where the country’s production is expected to top the US for the first time, according to the USDA’s most recent projections. Meanwhile, strained US supplies due to a drought-stricken crop in Texas could allow Brazil to surpass US exports and become the world’s top cotton supplier, dealing yet another blow to America’s agricultural dominance.

Due largely to unfavorable prices heading into planting season, US cotton farmers had already reduced their cotton acreage in 2022/23 to an estimated 10.23 million acres, down from 13.76 million the previous season and the lowest since 2016. Although the growing season got off to a good start, unfavorable growing conditions have dealt a heavy blow, particularly in the top production state of Texas. USDA in October further reduced its estimate for US 2023/24 cotton production by -315,000 bales to 12.8 million, nearly -1.7 million below the 2022/23 crop.

By contrast, Brazil farmers are expected to harvest a record cotton crop of 14.56 million bales, a big jump from last year’s production of 11.72 million bales. The increase also puts Brazil on track to surpass the US as the world’s number three cotton producer. Brazil’s cotton production has roughly doubled in the past decade.

As with production, Brazil’s cotton exports have also been steadily increasing. USDA pegs the country’s 2022/23 exports at 11.8 million bales versus around 4 million a decade ago, and virtually non-existent two decades ago.

While USDA pegs US cotton exports higher than Brazil at 12.2 million bales, various factors could still allow the South American ag giant to overtake the US. For one, further deterioration of the US crop would obviously lower exports. Cotton quality is also a concern for the US crop, which has suffered due to back-to-back drought in recent years. Brazil, meanwhile, has produced very high-quality cotton.  

Much of Brazil’s expanding cotton production is due to its use as a second crop following soybeans. This is similar to how the country grew its corn production, which also includes a second, or “safrinha” crop. Currently, Brazil’s soybean planting is being delayed, which could in turn delay second crop plantings and impact 2024 cotton acres. That could in turn allow the US to reclaim its crown as top global exporter in 2024/25, but that might also be only temporary. As most likely know, Brazil surpassed the US in corn exports just recently in 2022/23. They did the same with soybean exports a decade ago. (Sources: USDA, Reuters, Bloomberg)

Leave a Comment

Your email address will not be published. Required fields are marked *