Bloomberg News
RLGR editor’s note: Arizona cotton farmers produced the nation’s top 2011 upland cotton yields with 1,548 pounds per acre, according to the National Agricultural Statistics Service. The 1,548-pound yield is a record in Arizona.
The Department of Agriculture has pledged to support the cotton industry as it faces massive contract defaults that threaten the growth of exports from the United States, the world’s biggest shipper.
Members from the National Cotton Council, the American Cotton Shippers Association and the National Council of Textile Organizations met last week with Agriculture Secretary Tom Vilsack and trade officials as contracts worth nearly $1 billion are in default or may unravel with little sign of resolution, the Cotton Council said. The sessions followed up meetings in August and March.
“We will continue to encourage trading partners to honor commercial commitments and adhere to the rule of law to ensure a predictable and vibrant environment for trade,” Matt Herrick, a USDA spokesman, said Friday.
Cotton prices on ICE Futures U.S. in New York surged to a record $2.197 a pound on March 7, 2011, from 66.55 cents on Feb. 5, 2010, amid rising demand from China. The commodity then plunged to less than $1 by July 2011 and closed Friday at about 70 cents. Warehouses from China to Australia are bulging with the biggest-ever glut, a year after the the high prices spurred farmers to expand output.
Textile mills in countries including Bangladesh, Indonesia, Thailand and Vietnam have defaulted on contracts, resulting in severe losses for merchants and marketing cooperatives, according to Ricky Clarke, a merchant with Cargill Cotton, a division of Cargill Inc., in Cordova, Tenn., and chairman of the American Cotton Shippers Association.
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