Cotton has always been king in Texas, but the industry reached a crowning new achievement in January as growers earned record-high prices for their crops.
Thanks to a combination of hard work, favorable weather and growing global demand, U.S. cotton growers have enjoyed record-high prices since November, and in late-January prices, the March 2011 futures contract closed at nearly $1.70 per pound! This milestone marks a 140-year high and comes as welcome news to Texas farmers and the Lone Star economy.
Fortunately, consumers also have reason to cheer. Despite a strengthened demand for quality Texas cotton, retail prices on jeans, T-shirts and other goods are projected to remain steady. Why? The reality is cotton farmers only receive a small slice of the value of the finished product, which ultimately is priced to cover the costs of such other variables as advertising and shipping. It takes about one-and-a-half pounds of cotton to make a pair of jeans and at the current prices paid to farmers, there is only about $1.30 worth of cotton in that pair of jeans.
This double dose of good news for cotton and consumers is a win-win for all of Texas.