USDA’s August crop production and supply/demand estimates for the 2025 cotton crop reveals a significant reduction in both acreage and estimated production. While prices have not yet increased, a smaller US crop could eventually improve the market outlook.

The report shows, production is likely to decline by 1.3 million bales from July 2025 and 1.2 million from last year’s production to 13.21 million bales.

Area under cotton cultivation is likely to decline by 843,000 acre from the June projection. Even more notable is the projected increase in abandoned acreage, which now accounts for 21 per cent of planted acre, up from 14 per cent. This will result in a total decline of 1.3 million acre expected in area to be harvested.

Texas and Georgia account for the majority of the planted acreage decline, with reductions of 440,000 acre and 160,000 acre, respectively. The fact that almost every state saw a reduction in acreage is considered highly unusual. Despite the news of a smaller crop, prices have not seen a sustained increase. December futures initially rallied but remain mostly in the 67 to 70 cents range, suggesting the market is waiting to see how crop conditions and demand play out.

The USDA report also highlights several other key global trends like the US exports projections for the 2025 crop year were lowered by 500,000 bales, likely due to the smaller available supply; China’s cotton consumption increased by 1 million bales, though its production also increased by 500,000 bales.

Global cotton is likely to decline slightly with lower projections for India, Turkey, and Bangladesh.

In recent weekly reports, export sales totaled 251,000 bales, bringing the total sales for the 2025 marketing year to 3.32 million bales. However, shipments need to average around 231,000 bales per week to meet USDA’s projection. Notably, sales to China have been almost nonexistent.