Conflict Between Cotton Producers And Yarn Spinners

t a recent meeting with a group of cotton producers to improve dialogue, the discussion
focused on the importance of fiber quality characteristics. Specifically, fiber characteristics
that contribute to improvements in manufacturing performance and product quality, and at the same
time lower cost for yarn spinners — thus providing a positive influence on company bottom line and
customer satisfaction.

To help those in attendance appreciate the importance of short fiber content and trash
content to yarn spinners, components from the Murata Vortex Spinner (MVS) were passed around. The
spindle, needle and needle holder were carefully observed/discussed. It was emphasized that this
system can’t handle and really doesn’t like short fibers, high micronaire or trashy cotton.

As you might expect, word came from the audience, “We can produce higher-quality cottons
with improved fiber properties, if we are paid for them. Our objective is the same as the textile
mill — to maximize profits. And for us right now, the best way to do that is to increase yield. The
objective is dollars per acre.”

Needless to say, after decades of discussion, the cotton marketing system doesn’t seem to
send the right signals from the spinner to the producer.


Producers can produce a higher-quality fiber if the incentive is there. Money provides the
incentive and usually gets attention. Are mills getting what they pay for? Why can’t our leaders
recognize that giving our producers an incentive to produce cottons with improved fiber quality
characteristics contributes to performance improvements? One would expect better input would lead
to bottom-line improvements.

Producers truly believe that mills want better fiber qualities. They also have learned that
mills don’t want to pay for new cotton fibers. And spinners must be willing to pay for fiber that
helps the bottom line. Varieties for these new cottons yield less lint per acre, and with the
current marketing system, producer income would be reduced. Given this loss of income, these
varieties will not be developed/produced.

Spinners know fiber properties influence performance, quality and cost at every process in
the conversion of fibers into consumer products. There isn’t a process where better fiber
properties have a negative impact. If this is the case, why can’t all segments in the pipeline work
together, for the good of all?

It seems reasonable to think that if a supplier developed, created or produced something
that would help make money or improve the bottom line, it would generate a lot of interest.
Management of a company using this raw material would certainly want to explore the opportunities.

Cotton Situations

For the year 2001/02, the United States Department of Agriculture (USDA) reports a sharp
reduction in domestic mill use, higher exports and increased ending stocks of cotton. Domestic mill
consumption was reduced by 400,000 bales last month to 7.3 million — a 1.5 million-bale reduction
compared to the 2000/01 total of 8.8 million. Exports were raised 200,000 bales to 10 million (6.7
million in 2000/01), and ending stocks were increased 200,000 to 8.8 million bales (6 million in
2000/01). Production was 20.08 million versus 17.19 million bales in 2000/01.

With this reduction in U.S. mill consumption, it is worth noting what annual changes have
occurred in other countries. In Europe, there was a reduction of 270,000 bales. In the following
countries, consumption increased: China (250,000 bales); Central Asia (30,000 bales); Turkey
(150,000 bales); South Korea (100,000 bales); and Argentina (30,000 bales). Given these numbers and
trends, what does the future hold?

Cotton prices moved up slightly from those reported last month. Quotation for the base grade
in the seven designated markets averaged 32.73 cents per pound, up from 31.70 cents last month but
down from 61.04 cents a year ago.

Looking Better

All respondents said things seem to be turning around. One responded, “I am more positive
than at any time in the past several months. We have received some orders, so things are better for
the present time. I don’t know what it will be like next month, but it is good to have these orders
now.” Maybe there is a light at the end of the tunnel.

March 2002