Unusual cotton prices could drive up clothing costs

Cotton prices are higher than they’ve ever been, but it could be this summer before consumers really see the effect of those prices on store shelves.

“The market is higher than it’s ever been,” said Jeff Lander, a Suffolk resident who markets cotton for the Carolinas Cotton Growers Co-op. “Nobody saw this market exploding. It was a series of events that happened that continues to almost feed on itself.”

Cotton currently is trading above $2 a pound. Prior to the Civil War, cotton got as high as about $1.80 a pound, Lander said. Since then, the highest it’s been was $1.17 a pound, in 1985.

But typically, cotton prices oscillate between 40 cents and 90 cents, averaging around 60 cents a pound.

The cotton price has been driven sky-high by worldwide production problems and high demand for American cotton, Lander said.

“The U.S. is the biggest exporter and the first choice for pretty much anybody,” Lander said. “They want our cotton first, because of the quality standards that we have.”

In Virginia and North Carolina, cotton yields have been low in recent years because of heavy rains in one year and heavy drought the next. Some Asian countries experienced similar problems.

The price spike is affecting merchants and customers worldwide. The last time prices went up, many smaller merchants had to close their doors because of it.

“You can imagine what $2 cotton is doing to a lot of people,” Lander said. A pair of jeans requires about two pounds of cotton, Lander said. That means the raw material for one pair costs about $2 higher. After the cotton goes through mills, wholesalers, merchants and other middlemen, Lander estimated, the jeans would be about $8 higher in price.

Larger stores like Walmart may be able to absorb some of the cost, Lander said. “One hundred percent might not be passed all the way down to the consumer,” Lander said. “I’m going to say the summer is when you’re going to see these high prices hitting the retail shelves.”

The price spike also is hurting farmers, Lander said. Most farmers sold last year’s cotton before the price even hit $1, but they’re now being confronted with higher production costs.

“When the market presented 70 cents to them, farmers became aggressive sellers,” Lander said. “These were prices farmers had never seen before. The majority of cotton was out of farmers’ hands very early. Very few farmers have received anything close to where the market is.”

However, farmers who rent their land now are being charged more, because the landowners think they can afford it. Other production costs are rising, too, he said.

The only thing that’s left to determine is whether customers will accept the higher prices on clothing.

“That’s going to be the driving force as to whether all these high prices are going to be passed down to the consumer and will they accept it,” Lander said. “It’s hurting everybody that’s got to do business with it.”