Cotton Stocks Hit an Eight-Year Low as USDA Projects 90-Cent Prices

By Conor Smart · Published July 14, 2026, 6:45 a.m. ET

Global cotton stocks are on track to fall to their lowest level in eight years, and the U.S. Department of Agriculture expects prices to climb to roughly 90 cents a pound.

USDA's Cotton and Wool Outlook puts 2026/27 world ending stocks at 71.1 million bales, a 7% decline of 5.5 million bales from the season before and the thinnest cushion since 2018/19. Production is the main reason. Global output is forecast at 116.0 million bales, about 5.5% below 2025/26, while world mill use climbs roughly 1.5% to 121.8 million bales, the highest in six years. Less fiber, more spinning.

Price follows supply. USDA expects global cotton to rebound from the 80 cents a pound that held through the previous two seasons to about 90 cents. The agency's next outlook is due July 14.

The American crop is faring worse than the global one. USDA forecasts U.S. production at 13.3 million bales, 4% under last season and the smallest since 2023/24. Drought is the culprit. As of early June, 79% of the U.S. cotton area sat under drought, against 6% at the same point in 2025. Growers are expected to walk away from more of what they planted, with USDA projecting abandonment near 23.5% this season compared with about 15.5% last year.

For any business that puts a logo on a shirt, this is the layer underneath the invoice. Cotton is the raw material in tees, polos, hoodies and caps. A 10-cent move in a pound of fiber does not hit a purchase order the following Monday. It travels through yarn, then fabric, then blanks, and it surfaces quarters later, which is exactly what makes it easy to ignore until it is not ignorable.

"Nobody orders shirts because of a crop report, and they shouldn't," said Conor Smart, founder of Arklavo. "But the businesses that get burned are the ones that guess big and early. Buy what you actually need, when you need it."

What a tighter crop changes for buyers

The instinct when input costs rise is to buy ahead and lock in the old price. On a raw commodity, that logic holds. On finished branded apparel, it usually does not. A year of inventory bought in July is a bet on headcount, size mix and turnover, and rosters rarely cooperate. Boxes of unworn mediums are not a hedge. They are a loss nobody has counted yet.

Arklavo, a self-funded custom apparel company founded in 2023 and rebranded in 2025, has served more than 13,000 businesses without order minimums. In-house embroidery, direct-to-garment printing and heat press keep short runs viable, and orders ship in two days with free U.S. shipping over $150. That lets a buyer treat apparel as a recurring small purchase rather than an annual gamble on a spreadsheet.

The fundamentals are not a forecast of doom. Mill use at a six-year high says demand for cotton goods is healthy, and a 90-cent projection is a rebound rather than a spike. What is different this time is how thin the cushion is. At 71.1 million bales, there is less slack in the system to absorb a bad harvest somewhere else, and USDA expects every major producing country except India to add to the shortfall. Businesses planning fall and holiday apparel can compare fabrics and pricing across Arklavo's custom embroidered t-shirts range while the market sorts itself out.