Texas Cotton Industry: History, Production, and Markets

Texas produces more cotton than any other state in the country — roughly 45 to 60 percent of the U.S. total in most years, depending on rainfall and market conditions. That single fact shapes land use, water policy, farm income, and commodity markets across a state where cotton farming stretches from the High Plains to the Coastal Bend. This page covers the structure of the Texas cotton industry, how production and marketing actually work, the scenarios growers face across different regions, and the key decision points that define a cotton operation's economics.

Definition and Scope

Cotton in Texas is primarily an upland cotton crop (Gossypium hirsutum), the variety that accounts for the overwhelming majority of both planted acreage and lint production nationwide. A smaller share of production involves Pima cotton (Gossypium barbadense), sometimes called extra-long staple (ELS) cotton, grown in limited acreage in West Texas for premium textile markets.

The Texas cotton industry encompasses field production, ginning, marketing through cooperatives and merchants, and the downstream flow into export channels and domestic mills. Texas crop production statistics tracked by the USDA National Agricultural Statistics Service (NASS) place the state's planted cotton acreage at roughly 5 to 7 million acres in recent growing seasons, with harvested acreage significantly lower in drought years — a distinction that matters enormously to yield calculations and crop insurance indemnities.

Scope and coverage note: This page addresses cotton production within Texas under federal and state frameworks administered by the USDA Farm Service Agency (FSA), Texas Department of Agriculture (TDA), and related entities. Federal commodity programs, export financing, and trade policy fall under federal jurisdiction and are only summarized here in the context of their effect on Texas growers. Operations in Oklahoma, New Mexico, or other states are not covered, even where shared river basins or commodity markets create economic overlap.

How It Works

A Texas cotton season follows a pattern that looks deceptively simple from the outside: plant, grow, harvest, gin, sell. The mechanics underneath that sequence involve a specific chain of decisions tied to soil type, water availability, and market timing.

Planting and growing: In the High Plains — the Lubbock region that anchors Texas cotton — planting typically runs from late April through May, with the crop relying heavily on dryland production or irrigation from the Ogallala Aquifer. Ogallala depletion rates have become a structural constraint on High Plains agriculture; the Texas Water Development Board tracks saturated thickness data that shows measurable annual declines across major cotton-producing counties. In the Rolling Plains and Coastal Bend, planting windows and soil moisture profiles differ enough that a grower near Corpus Christi faces a fundamentally different risk calculus than one outside Lubbock.

Ginning: Cotton leaves the field as seed cotton — raw fiber still attached to the seed. Before it can be sold, it must be processed through a gin that separates lint from seed and compresses lint into 480-pound bales. Texas has roughly 200 active gins concentrated in the High Plains, a number that has declined from several hundred over the past 40 years as gin capacity per facility increased. The Texas Department of Agriculture licenses cotton gins under the Texas Cotton Gin Act.

Marketing: Growers can sell cotton through several channels: spot market sales at the gin, forward contracts, options on the ICE Futures exchange, or through a marketing pool such as Plains Cotton Cooperative Association (PCCA) or Calcot. Each path carries different price risk and counterparty exposure.

Common Scenarios

Three situations define most of the variation in Texas cotton outcomes:

Dryland High Plains season with adequate summer rainfall. The crop reaches full canopy without supplemental irrigation. Yields average 700 to 900 pounds of lint per acre in good years. Profitability is highly sensitive to New York ICE futures prices, which gyrate based on global supply from Brazil, India, and China.
Irrigated production with Ogallala groundwater. Yields can reach 1,200 pounds per acre or higher, but energy costs for pumping and declining well capacity erode margin. Growers in Dawson and Terry counties routinely face the arithmetic of whether irrigation pays at current gas prices and current cotton prices — a calculation that changes every season.
Coastal Bend or Blackland Prairie operation. These operations contend with different pest pressure, including boll weevil and bollworm, and higher average rainfall variability. The Boll Weevil Eradication Foundation, a producer-funded organization operating under state authority, maintains active suppression zones across Texas, with per-acre assessment fees paid by growers in designated zones.

The Texas crop insurance program administered through USDA's Risk Management Agency provides a financial backstop in all three scenarios, with coverage options including Actual Production History (APH) and the Stacked Income Protection Plan (STAX) designed specifically for cotton.

Decision Boundaries

The clearest line in Texas cotton economics is the dryland-versus-irrigated divide. Dryland operations carry lower input costs but yield uncertainty that makes multi-year planning difficult. Irrigated operations carry higher and more predictable yields but face water depletion as an irreversible constraint that no commodity price can fix.

A second boundary sits between producers who forward-contract a portion of their crop at planting and those who take full price risk to harvest. USDA Economic Research Service analysis has consistently shown that price volatility in cotton markets exceeds that of corn and soybeans in most years, making price risk management a meaningful operational variable rather than an optional refinement.

Growers weighing diversification can find context in Texas corn and wheat farming and Texas grain sorghum production — both rotation crops that interact directly with cotton production economics on West Texas farms. For the broader picture of what cotton contributes to the state economy, the Texas agricultural economy page provides commodity-level context.

The Texas agriculture history record shows cotton's dominance predates statehood in meaningful ways, but the modern industry — built around mechanical harvesting, Bt transgenic varieties, and global commodity markets — is a 20th and 21st century structure, not a relic. The overview at /index situates cotton within the full scope of Texas agriculture.

References

📜 1 regulatory citation referenced · 🔍 Monitored by ANA Regulatory Watch · View update log