The comparative position of U.S. cotton producers in world markets

The U.S. role in world cotton production and trade has changed. The U.S. share of total world production decreased from 20 percent in 1968 to 15 percent in 1984. Export share declined from 29 percent in 1978 to 10 percent in 1985. The purpose of this study was to determine the long run competitive position of the U.S. cotton production sector in the world market. Data on cotton production costs were compiled for the U.S. and eight foreign exporting countries. The cost budgets were adjusted for input subsidies and average costs per pound were computed.

It was concluded that the U.S. is competitive in production cost and remains a low cost producer of cotton. Overall competitiveness in the world market is also affected by political decisions and other economic factors within the exporting countries, as well as by production efficiencies. Two countries, Australia and Pakistan, threaten U.S. market dominance. Both had costs of production near U.S. costs and export to traditional U.S. markets.

It was recommended that researchers accept the results from this study with caution. The completeness and accuracy of the foreign data on production costs and subsidies makes comparing costs difficult.