What is in this article?:
- Cotton growers getting boost from growth of U.S. textiles
- Thinks trend will continue
- The U.S. textile industry is making a slow, but sure climb out of a two-decade long doldrums that meant most of the cotton grown in the U.S. had to be sold abroad, primarily to China.
Thinks trend will continue
Johnson says, “We think the trend for increasing use of U.S. cotton by U.S. mills will continue to increase. Last year over 48,000 jobs were created by the U.S. textile industry — one of the few U.S. industries to increase its labor force during the recession.
“Asian labor costs continue to rise and our labor costs have stabilized over the past couple of years. The high cost of cotton worldwide actually helps the U.S. textile industry,” Johnson says.
The growth in U.S. textiles could produce a unique situation and one that could give the U.S. cotton industry a public relations black eye, Johnson contends. The demand for U.S. grown cotton by U.S. textile plants may exceed supply.
“That would be a real sad day, if the comeback of U.S. cotton mills is stopped because of a lack of cotton, but that could happen,” the textile leader says.
Whether the textile industry continues to grow is more dependent on politics than on cotton, he adds.
The reason for the new cotton mills and increased profitability in textiles is directly related to the 4-Cent Program, which expires in 2012. The Federal program provides tax dollars to help textile companies re-invest in equipment and become more competitive with Asian and Central and South American companies.
For spinners, papermakers and non-woven cotton product producers, the program pays 4 cents per pound for eligible cotton opened by the producer each year from 2008-2012. In year five of the program, payments by the CCC will be reduced to 3 cents per pound, if the program survives federal budget cutting.
Dollars for the program is much more than nickels and dimes. For example a 30,000-spindle spinning frame using approximately 370,000 pounds of cotton per week. At 4 cents per pound, the spinner is reimbursed $14,800 per week for four years and $11,100 per week for the fifth year, for a total reimbursement of close to $3.6 million through the end of the five-year program
All the payments from the 4 cent program are intended to support the competitiveness of domestic users of eligible baled upland cotton regardless of origin, and must be reinvested in plant and equipment.
A similar program helped the U.S. automotive industry become more competitive with foreign car makers. The Obama administration has taken steps to insure continuation of the auto program, but not the textile program.
Free trade pacts with Korea and Vietnam (second largest exporter of textile products in the world) would severely damage the comeback of the textile industry in the Southeast.
“These are not the kind of 21st century trade agreements we were promised by President Obama,” Johnson says.