Cotton: A global economic impact

A graphic illustration of cotton bowls on the Texas High Plains laid over a graphic of the globe. Cotton production has a massive impact on the Texas High Plains economy. Texas Tech has a research focus on the global cotton market that helps local farmers.

Cotton, the pearl of the Texas High Plains, has a budding effect on the economy and lifestyle of the people leaning on the brittle, brown stems of the cotton plant. Texas Tech University is a leader in innovation for Texas High Plains cotton. Its research prepares local farmers for the global market.

Darren Hudson, Ph.D., a professor in agricultural and applied economics at Texas Tech, analyzes global policy and markets to assess their local economic impact.

Hudson said emphasis on international trade and the world market for cotton is important for Texas Tech research initiatives as 80% of the United States’ produced cotton bales are spun overseas.

Operators and a cotton-spinning machine with graphic illustration at the Fiber and Biopolymer Research Institute in Lubbock, Texas.
Texas High Plains cotton relies on maximizing production and foreign textile industries to maintain profitability.

“What we produce, we export so we’re subject to the whims of the international market,” Hudson said. “Turkey is a reliable customer for U.S. cotton. Ten to 15% of what the U.S. exports goes to Turkey.”

Yet, he said, for the Texas High Plains cotton industry, catastrophe on the other side of the globe can be problematic for its cotton production.

“The earthquake in Turkey, where that earthquake occurred encompasses 80% of the textile processing capacity in Turkey,” Hudson said. “They won’t be processing cotton for a while.”

Events like the Turkey earthquake are why Texas Tech cotton research analyzes global markets. Cotton producers face challenges beyond the West Texas dirt roads as the profitability for their crops rests in laboring hands across the oceans.

“It’s the events around the world that determine their price, not what’s happening here in West Texas,” Hudson said.

“That’s why we are doing this research in cotton because it has a direct role in the economy of Texas and the whole United States.”

-Bishnu Ghimire

The answer to why Texas High Plains cotton producers depend on a good global market for their product’s profitability is written on the tags inside clothing. In comparison to other areas of the world, the U.S. wage rates are too high for a competitive textile industry.

“All that [textile manufacturing] has gone to Southeast Asia and Africa,” Hudson said.

Without a prolific textile industry, the value of cotton depends on farmers utilizing crop risk reduction and technologies that maximize production.

“Regionally, cotton represents somewhere around $3 to $4 billion,” Hudson said, “The prices are as high or higher than they’ve been, so the result is an increased value to the region over time.”

Research, a catalyst for innovative technology and yield increases, aids in the upward growth of cotton’s value. Key contributors to research advancement, Texas Tech attracts international students who use their outside perspectives.

A group photo with illustrated elements of Dr. Wenxuan Guo and four of his research students at Texas Tech University.
Dr. Wenxuan Guo and his research students at Texas Tech University. Featured left to right; Oluwatola Adedeji, Rupak Karn, Alwaseela Hassan, Wenxuan Guo, Ph.D., Bishnu Ghimire.

Doctoral students in the Department of Plant and Soil Science, Oluwatola Adedeji from Nigeria, and Bishnu Ghimire from Nepal, research technologies that help reduce risk and maximize cotton production.

“The good thing is this technology, once you understand it, you can apply it for different crops,” Adedeji said. “So, even though we’re using it here for cotton, we can still use the same principle for different crops.”

A hub for bringing people in, Texas Tech generates a research output that prepares the Texas High Plains cotton industry for the volatility of the global market.

“That’s why we are doing this research in cotton because it has a direct role in the economy of Texas and the whole United States,” Ghimire said.