STATE'S COTTON GROWERS RIDE INDUSTRY'S COATTAILS

STATE'S COTTON GROWERS RIDE INDUSTRY'S COATTAILS

When U.S. cotton exporters have a good year, as they did in the 1994-95 marketing season, California cotton growers have an especially good year.

That's because the long-staple, high-quality cotton grown in California's San Joaquin Valley commands a premium price in the world marketplace.U.S. cotton exports this past year were at near record levels, thanks to a bumper crop at home and pest and weather problems in some other major cotton- growing countries. U.S. cotton, therefore, commanded top prices in many export markets.

Cotton prices for the marketing season that ended July 31 averaged about 91.5 cents a pound, or about 24 cents a pound higher than for the 1993-94 marketing season, according to the Cotton Advisory Committee in Washington, D.C.

Although the final figure for the average 1994-95 California cotton price is not in, it is certain to be higher than the national average.

"Our prices can be 5 to 10 cents higher," said Mark Bagby, director of communications for Calcot, the large California cotton cooperative in Bakersfield.

California cotton is grown through irrigation. It is a strong, long-staple, extra white fiber that is highly prized by manufacturers of men's shirts, quality bed sheets, fine underwear, etc.

There is not much competition for the type of cotton grown in California. Australia is the major competitor, but that country experienced a severe drought the past few years. Egypt is also a competitor. In fact, Egypt exports its long-fiber cotton while importing the less costly short-fiber cotton for use in its domestic market. China also produces some high-quality cotton, which competes with California cotton.

The United States, in general, and California, in particular, are considered reliable producers of quality cotton. With access to a well- established inland transportation infrastructure and frequent sailings by liner companies, U.S. cotton is the product of choice in the world marketplace.

"We're considered a reliable, consistent, timely supplier," Mr. Bagby said.

Unless California is experiencing a drought in a particular year, it is an especially reliable supplier. Since California growers irrigate their fields, they are not as dependent upon seasonal weather conditions as are growers in the South and Southwest. Annual production in California therefore is directly related to the acreage planted.

California growers this past year produced 2.91 million bales of cotton. The final export figures are not in, but in recent years about 80 percent of the California crop has been exported. The remaining 20 percent is sold domestically for fine fabrics and, more recently, wrinkle-free pants.

Mr. Bagby explained that the manufacturing process for wrinkle-free pants weakens the fiber, so it is necessary to start with an especially strong cotton fiber like that grown in California.

"If this trend continues, we could have a new market for our cotton," Mr. Bagby said.

California dominates U.S. cotton exports to the Far East. Growers here have the logistical advantage of being close to the major shipping gateways. Also, consumers in the Far East prefer clothing made from long-fiber cotton.

Japan is traditionally the biggest export market for California cotton. South Korea, Taiwan, Hong Kong, Egypt, China, and, more recently, Indonesia, also are strong markets.

The U.S. Department of Agriculture is projecting another strong year for cotton exports in the marketing season that began Aug. 1. However, the USDA in July lowered its estimate of cotton exports, to 6.5 million bales from 7.5 million. This would be a large drop from the almost 10 million bales exported this past year, but would be a normal export level compared with recent years.