When it comes to U.S. cotton, says Michael D. Watson, “everyone wants the doughnut and nobody wants the hole.”
Watson, vice president, fiber competition, for Cotton Incorporated, got a good laugh with that line at the 2006 Crop Management Seminar put on by CI in Memphis, Tenn. But it was more a laugh of recognition than a belly laugh.
Watson noted that while most of the cotton-spinning world seems to be demanding either a fine or a coarse-type fiber, much of the U.S. cotton crop continues to fall into an in-between or medium category.
“When you get into the world, very little cotton is actually marketed on HVI (high volume instrument classing),” said Watson. “Most of it is sold on description or type. To make tonight's talk a little simpler, let's pretend that three basic types of cotton get sold in the world.”
The first, he said, is cotton for fine-count yarns, the type that go into sheets, dress shirts or other high quality garments. On the world market, the cotton for those uses would be a minimum of USDA's Grade 31, 3 or cleaner leaf, 35 or higher staple and 3.8 to 4.7 micronaire.
A medium type or slightly coarser yarn would require a 41 grade, 4 leaf, 34 staple and micronaire of 3.5 to 4.9. “That for years has been the bread and butter of the U.S. textile industry,” said Watson. “It's the basis for our CCC loan chart.”
The third or coarse-type fiber could be a 42 color or worse, a 5 or higher leaf, a 33 or less staple and a micronaire in the discount range (lower than 3.5 or higher than 4.9).
“This is actually a fairly popular cotton in the world,” Watson notes. “When you go to a foreign warehouse or a denim mill, you might see something like this (a slide of low-grade cotton). But they will use it, and they will make a good product out of it.
“These people buy cotton based upon price. That's what they're looking for - cheap cotton. They don't need high quality.”
The fiber characteristics of the U.S. crop have been changing: Micronaire has come down in the last three years after being in the high category; strength has been improving; but length and length uniformity have been going in the wrong direction.
“Ten years ago, we were running well over a 35 staple on average for the entire U.S. crop,” Watson said. “We've lost that, and we have yet to recover it, although we're selling to a world market that is predominantly ring spinning where staple length is the most important fiber quality.”
If textile mill representatives could have their druthers, he said, 30 percent to 40 percent of their purchases would fall into the “fine” category; 40 percent to 50 percent would be from the coarse category; and 10 percent to 20 percent from the medium.
“Unfortunately, we tend to have a little bit of reputation in the world market for not having quality cotton,” says Watson. “They look to us to provide that coarse cotton.”
If you look at what the United States grows, on the other hand, 25 percent falls in the fine category, 25 percent in the coarse category and 50 percent in the medium category - the area where demand is the lowest.
“Since you've been eating dessert, I can tell you that everyone wants the doughnut and no one wants the hole,” he noted. “And we've been growing doughnut holes lately.”
Watson displayed a chart of the micronaire distribution for U.S. upland cotton that indicated a high percentage of samples in the base range of 4.3 to 4.9. “But anything in the 4.8 to 4.9 range is a real dog in the world market,” he said.
A similar chart for strength showed a much higher percentage of samples in the base and premium ranges. “We're doing great on strength - no problems there,” he said.
According to the CCC loan chart, cotton with a 34 staple is in the base range for length. That cotton accounts for about 25 percent of the U.S. crop while cotton with a 35 staple makes up about 32 percent.
“But I have to tell you that a 34 staple will be the last cotton that moves because to the world a 34 staple length is a discount cotton,” he said. “No matter what you think, your customer thinks it's a discount cotton.”
For color grade, most of the world considers a 4 color a discount cotton although it is the base grade for the U.S. loan chart. The same holds true for a 4 leaf.
“So we've got this mismatch,” he said. “One of the challenges we face is finding ways of making the cotton we grow match with the quality the customer demands. It's a matter of putting the right cotton in the right place at the right time.”
As recently as the year 2000, growers produced mainly for U.S. textile mills that seemed content to buy “41-4-34s;” i.e., cotton with a 41 grade, 4 leaf and 34 staple. Since then, exports have been claiming a larger and larger share of U.S. cotton use. In 2006, USDA estimates U.S. growers will sell 75 percent of their crop outside the country.
“This trend is not going to change until U.S. mill use bottoms out, and none of us are sure when that will happen,” says Watson. “The fact is that for every bales we sell in the United States we now have to sell three overseas.”
The latter market is dominated by China, which is expected to spin more than 50 million bales of cotton in 2006. Chinese mills have purchased 8.9 million bales of U.S. cotton in the last 12 months or nearly half again as many bales as U.S. mills.
In its rush to become a textile mill powerhouse, China has tripled its use of ring spinning, jumping from 22 million ring spindles in 1984 to 67 million in 2004. And the most important quality factor in ring spinning is length, the characteristic that has been declining in the U.S. crop.
Cotton Incorporated has exported its Engineered Fiber Selection or EFS system to China to try to help convince Chinese mills the U.S. cotton industry can provide the most consistent mixes of cotton for end product and opening line.
“One of the things we are working to build in these kinds of markets is to help them understand you don't always have to buy a 35 staple or a 3 or a 3 leaf to make the product that you want,” Watson said.
“This will be a long-term educational process. It's not going to happen overnight. I will encourage those of you in the room to do everything you can to help us either grow that poorer quality cotton that yields 6 or 7 bales to the acre, dryland, or to grow the higher quality cotton we need to sell in the world market.”