A global fashion trend is making things challenging for the U.S. cotton industry. Owen Wagner, vice president of grains and oilseeds analysis for Rabobank, conducted cotton research in Germany. The research was related to something called “fast fashion,” which has displaced cotton demand globally.
Fast fashion is the concept of companies rolling out numerous deliveries and lines to their stores and staying on top of trends. This has caused a shift to more synthetic fiber use, instead of cotton, which negatively affects the U.S. cotton industry.
People wear clothes a couple of times and then dispose of them, and then buy something else. But in order to navigate these new trends, what we’ve seen are fast fashion and now ultra-fast fashion companies like Shine and Temu. These are the direct-to-consumer mail order companies that are based out of China. They were switching away from natural fabrics and more toward synthetics. At the same time, you had growth in Brazil’s domestic cotton market that, over time, the sort of indifference toward U.S. cotton in the face of either cotton from elsewhere, maybe Brazil, or synthetics, you know, really made for a competitive environment for U.S. cotton.”
Wagner said Rabobank is also watching what’s going on with direct assistance payments for farmers.
“Direct payments can be market distorting, and with those distortions come unanticipated, undesirable consequences; things like production and supply response get delayed because farmers aren’t necessarily getting those signals. Get rents and land prices that are stubbornly high.”