Productivity gains, declining acreage lower cotton production costs

USDA estimates commodity costs and returns based on periodic of commodity producer surveys. Cotton producers were surveyed in 1997, 2003, 2007, and most recently in 2015. Total economic costs estimated from these cotton surveys declined from about $1.40 per pound in 1997 to $0.92 in 2015. Declining real costs of cotton production reflect productivity gains in the industry that can be traced to the adoption of new cotton production technologies and changes in where cotton is grown. Productivity gains were particularly rapid during 1997-2003 as genetically modified (GM) cotton was widely adopted and real production costs fell nearly 20 percent. Between 2003 and 2015 real production costs fell another 20 percent, while cotton acreage declined 36 percent. Cotton became more concentrated in the low-cost Southern Plains region and declined in the high-cost areas of California and the Mississippi Delta region. This chart is drawn from the ERS Commodity Costs and Returns data product, updated in May 2017.

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