MUCH ADO ABOUT COTTON The world’s most widely used natural fiber for clothing, cotton is a key agricultural staple around the globe. As such, the twists and turns in its pricing tell an important economic story. After a super-high peak in spring 2022, cotton prices dropped significantly, according to the September 2022 USDA report. A variety of factors, including demand, harvest conditions, and the value of the U.S. dollar all come into play. Key highlights from the USDA’s most recent data include: • Cotton futures shed 25% since late August. • The most actively traded futures ended the month at 88 cents a pound, down more than 40% from May’s peak of 140 cents per pound, which was the highest price in more than a decade. (Also worth noting: Cotton prices have only exceeded $1 a pound three times since the late 1950s.) • One factor driving the cotton price drop is negative forecasts from clothing manufacturers, who cite concerns over high energy costs and waning consumer demand. • Another reason: Analysts believe inflation will drive consumers to focus their spending on essential items, leading to a decrease in clothing purchases. • Drought is also an issue. The U.S. cotton crop has been hard-hit by dry weather over the growing season, causing supply worries, which impact prices.
MOVING FERTILIZER PRODUCTION FORWARD The U.S. Department of Agriculture recently announced $500 million in federal grants under The Fertilizer Production Expansion Program, part of a government effort to promote competition in agricultural markets. The funds are being made available through the Commodity Credit Corporation and will be used to support independent, innovative, and sustainable American fertilizer production to supply American farmers. Funds also will expand the manufacturing and processing of fertilizer and nutrient alternatives in the United States and its territories. The program will support fertilizer production that is: • Independent, and outside the orbit of dominant fertilizer suppliers. Because the program’s goal is to increase competition, market share restrictions apply. • Made in America. Products must be produced by companies operating in the U.S. or its territories, to create good-paying jobs at home, and reduce the reliance on potentially unstable, inconsistent foreign supplies. • Innovative. Techniques will improve fertilizer production methods and efficient- use technologies to jumpstart the next generation of fertilizers and nutrient alternatives. • Sustainable. Ideally, products will reduce the greenhouse gas impact of transportation, production, and use through renewable energy sources, feedstocks, and formulations, incentivizing greater precision in fertilizer use. • Farmer-focused. Like other Commodity Credit Corporation investments, a driving factor is providing support and opportunities for U.S. agricultural commodity producers.
GREEN SNAPSHOT: SCOTTSMIRACLE-GRO North America's leading recycler of compost, ScottsMiracle-Gro, redirects green waste into its products to support the concept of circularity. Doing so prevents green waste, such as grass and tree trimmings and waste from commercial landscaping, tree cultivation, and agriculture, from ending up in landfills. The company also supports a “growing local” strategy, counting on a network of small and mid-size companies as agricultural partners. The result? A bag of ScottsMiracle-Gro soil is sourced, produced, and used within a 120-mile radius on average. And, the company recycles roughly 9 billion pounds of green waste each year.
October 2022 • Inbound Logistics 15
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