The Rupp Report: Rising Demand For Organic Cotton

The Greenfield, Mass.-based Organic Trade Association (OTA) recently reported plantings of organic
cotton increased by 26 percent in the year 2009. The report was based on preliminary data OTA
gathered in a survey funded by Cary, N.C.-based Cotton Incorporated. According to OTA’s press
release: “Analysis of available data collected from U.S. organic cotton producers and preliminary
data from the Texas Organic Cotton Marketing Cooperative put planted area at 10,731 acres in 2009,
up from an estimated 8,539 acres in 2008. The 2009 plantings are the highest since 2001, when
11,586 acres of organic cotton were planted by U.S. cotton growers.” In comparison, U.S. cotton
growers planted 9.14 million acres of conventional upland and Pima cotton in 2009, according to
data compiled by the U.S. Department of Agriculture.

OTA’s press release continues:

“Harvested acreage figures for 2009 are not yet available. However, estimates show that this
could be as much as 9,555 acres, up from 7,289 acres harvested in 2008.

“Harvested organic cotton area in 2008 yielded 7,026 bales, of which 6,466 bales were upland
cotton and 560 bales were Pima cotton. This yield was significantly less than the 14,025 bales of
organic cotton harvested from 8,510 acres in 2007. These yield differences reflected the extremely
difficult weather conditions, including wind, hail and drought, in 2008 in contrast to excellent
growing conditions in 2007.

“Other survey findings revealed that the average price per pound farmers received for organic
cotton in 2008 decreased from the previous year and ranged from 52 cents to $1.35 for organic
upland cotton in 2008, compared to $1 to $1.50 in 2007. Organic Pima cotton prices ranged from
$1.05 to $3 in 2007, compared to $1.75 in 2008.

“When asked what their greatest barriers are to planting more organic cotton in 2010, growers
cited finding a market for their cotton, finding a specific market that will pay value-added costs
of organic products, production challenges such as weeds and insects, weed control, and labor
costs. Growers also cited competition from international organic cotton producers as well as the
cost of transition to organic.

“To enhance their ability to market organic cotton, survey participants suggested that the
National Organic Program continue to allow organic growers to use acid-delinted cotton seed for
planting and cited the need for greater enforcement for foreign certifications. Growers also said
they needed further promotion geared toward organic products and greater consumer demand.”

What Exactly Is Organic Cotton?

OTA defines organic cotton as follows:

“Organic cotton is grown using methods and materials that have a low impact on the
environment. Organic production systems replenish and maintain soil fertility, reduce the use of
toxic and persistent pesticides and fertilizers, and build biologically diverse agriculture.
Third-party certification organizations verify that organic producers use only methods and
materials allowed in organic production. Organic cotton is grown without the use of toxic and
persistent pesticides and synthetic fertilizers. In addition, federal regulations prohibit the use
of genetically engineered seed for organic farming. All cotton sold as organic in the United States
must meet strict federal regulations covering how the cotton is grown.”

Fast-Growing Market

OTA further reports:

“In 2006, organic fiber linens and clothing sales in the United States grew by 26 percent
over the previous year, to reach $203 million, according to the Organic Trade Association’s 2007
Manufacturer Survey. According to the 2006 edition of this survey, women’s clothing accounted for
36 percent of total organic fiber consumer sales in 2005, amounting to $57 million in sales. Men’s
and child/teen clothing grew 56 and 52 percent, respectively, in 2005, while infant’s
clothing/cloth diapers grew 40 percent and accounted for $40 million in sales.”

Demand For Apparel Is Rising

In addition, OTA reports:

“Apparel companies all over the world are developing programs that either use 100 percent
organically grown cotton, or blend small percentages of organic cotton with conventional cotton in
their products. There are a number of companies driving the expanded use of domestic and
international organic cotton.”

As it is in many other sectors, the future will tell if textile customers around the world
are ready to pay more for eco-friendly products.

January 19, 2010