U.S. cotton has a reputation around the globe as No. 1 in quality, and the top choice for mills that expect consistency, and often pay a premium to get it.
It’s Bruce Atherley’s job not only to maintain that reputation, but to build on it.
Atherley, executive director for Cotton Council International, a position he’s held for about a year, says his role is “demand creation — I want to sell more cotton at a higher price so farmers can make more money,” he said at the recent joint meeting of the American Cotton Producers and the Cotton Foundation at Lubbock.
Holding on to a reputation that provides opportunities for premium market prices comes with challenges, he says. A disturbing issue with cotton contamination — plastics, other fabric, and oil/grease — poses a threat. “Mills are unhappy when they find contaminated U.S. cotton,” he says, “and they may look to other sources or pay lower premiums.
“Contaminants require more labor at the mill,” he explains, and they add cost to the manufacturing process.
Other challenges include the current glut of cotton in the global marketplace, primarily because of China’s huge stockpile.
PRODUCERS ARE STRUGGLING
“Prices are low, and producers are struggling to make a profit,” Atherley says, noting that Cotton growers have, at best, a limited safety net following the 2012 farm bill that eliminated cotton as a covered commodity.
“Global consumption is flat all the way back to 2005. Consequently, exports are also flat. But demand appears to be increasing, mostly in Asia, where the U.S. has a disadvantage to India because of transportation distance.”
Asia is the “largest and fastest-growing region in the world for fiber consumption. China and India are the largest consumers, but are hampered by government influence.”
Man-made fibers may be the biggest challenge facing cotton, Atherley says. “Synthetic fiber technology has changed. Synthetic products have improved.” Getting cotton into blends with man-made fibers offers an opportunity to regain some market share against a cheaper product.
“Today’s consumers are more ‘fiber agnostic,’” he says. “They don’t care as much as they once did which fiber they buy. They don’t feel a loyalty to cotton.
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Cotton has been in this situation before, he notes, pointing out that Cotton Council International was created in 1956 “to combat the growth of synthetic fibers. Over the decades since CCI was organized, cotton has competed with synthetics, often on price, but also as a preferred product and as a natural fiber chosen for comfort. Is this part of a cycle? Or is this different?”
NEW STRATEGIC PLAN
He says the technical innovations for man-made fibers in China and India are significant.
Atherley comes from a background in sales, with no experience in cotton, but says he is seeking a different perspective to take on some of cotton’s biggest challenges. “We are developing a new strategic plan. We want to determine who to target, where to place products, what to change, which actions to take, and how to measure what we’re doing.
“We want to make U.S. cotton the preferred fiber. We know we can’t compete on price, so we must promote a premium product and deliver against our brand promises. We collaborate with the National Cotton Council and Cotton Incorporated.”
A goal, he says, is to increase U.S. cotton production to 20 million bales by 2026 and to see global demand hit 150 million bales.
Branding U.S. cotton will be crucial, Atherley says. “We want to differentiate U.S. cotton, and leverage our quality for a competitive advantage. We will add new initiatives to make cotton the preferred fiber versus our competition.”
He says Asia will be a prime target. “We need data to quantify the value of U.S. cotton. We also need to tell the U.S. cotton sustainability story in a more dramatic way. It’s a great story; our sustainability message is a brand issue.”
U.S. cotton also competes with cotton marketed under the Better Cotton Initiative (BCI) program. “It’s a marketing issue,” Atherley says. “U.S. cotton is ‘way ahead’ of the BCI criteria, which may be good for developing countries, but not for U.S. cotton. It could be a tough problem, but U.S. cotton is better than what the BCI requires.”
“Made with U.S. Cotton,” should be a preference, he says. “We need innovation — to promote what’s new in cotton.”
Millennials will be an important focus, Atherley says. “They like to know where products come from.”
Funding could be an issue. “Our budget is 80 percent dependent on USDA and 20 percent from U.S. cotton. We’ve been getting less from USDA in recent years, but we’re still the largest recipient of Foreign Agriculture Service funds. “
Atherley sees opportunities for U.S. cotton, especially in China. “I think China will be back as the No.1 cotton importer two or three years after they work through their stockpile.” Bangladesh currently claims the top spot as the global leader in cotton imports. “That’s a big opportunity,” he says.
China’s cotton manufacturing interests extend beyond its own borders, with manufacturing facilities in Vietnam and other countries.
Atherley says he feels good about the U.S. cotton industry. “We have better people, technology, reputation, the will, and the drive. A little change and a little innovation will go a long way.”