Cotton Incorporated literally made cotton the "Fabric of Our Lives" in the United States. Still geared toward increasing profit and quality to U.S. growers 30 years after its founding, Cotton Incorporated now finds itself looking abroad to increase the use of U.S. cotton in foreign mills.
In an exclusive interview with Southeast Farm Press, J. Berrye Worsham, president and CEO of Cotton Incorporated, talked about the changes in the cotton industry since 1997, the projects geared to increase the quality and use of U.S.-grown cotton, efforts to help the U.S. textile industry, efforts to increase the use of U.S. cotton both domestically and internationally and the future of the cotton industry in general.
Worsham took the reins of Cotton Incorporated five years ago. He previously had worked for J.I. Case in Wisconsin before coming to Cotton Incorporated in 1983.
The story of Cotton Incorporated is by now legendary about how growers came together in the early 1970s to form a company to promote U.S. cotton. Cotton Incorporated took a projected off-the-charts market slide and turned it into a 60-percent market share for cotton. Eight out of 10 consumers recognize the Cotton Seal.
Demand for U.S. cotton is still growing in the U.S. consumer market, albeit at a slower rate. Future growth for the consumption of U.S. cotton will come from markets overseas, Worsham says.
With more than 60 percent of U.S.-grown cotton going to foreign mills, cotton groups decided to form the Cotton Gold Alliance to "prime the pumps overseas," Worsham says. The Alliance is made up of Cotton Council International and Cotton Incorporated and is funded by the USDA at $2 million over three years.
The Alliance chose India as its pilot project "and it sounds like it’s gaining some traction," Worhsam says. "If we can help improve worldwide demand for cotton, it will help all U.S. growers. We’re looking to create new consumer markets for cotton worldwide, so that increased foreign mill demand will not end up displacing U.S. textile workers and mills."
As part of the project, cotton is being promoted as a fiber that is right for today’s new fashions. The tag line is, "The New Face of Cotton."
The Gold Alliance requires foreign mills to use a higher percentage of U.S.-grown cotton than they normally would in order to use EFS and HVI data.
"That’s the biggest advantage of the U.S. crop — it’s tested," Worsham says. "Mills know what they’re getting."
Over the past several years, Cotton Incorporated has responded to the changing dynamics and increased efforts to aid foreign mills in their use of U.S. cotton.
Cotton Incorporated employees regularly make extended visits to countries such as Thailand, China, India and Pakistan. "The export market has become the largest market for U.S. cotton in the last few years," Worsham says. "We’ve got to help build markets not only here, but elsewhere as well."
One big difference between U.S. and foreign mills is their spinning equipment. Where the domestic customer predominantly operates on an open-ended spinning machine, many foreign mills tend to process cotton in ring spinning, which often requires higher-quality cotton.
This will have fiber quality implications for the type of cotton produced in the U.S.
"An inch and a sixteenth, strict-low middling, which is the standard for U.S. cotton, is a discounted cotton in the world market," Worsham says. "Anything we can do to improve the fiber quality of U.S. cotton will help us compete."
Noticing a decline in fiber quality over the last decade, Cotton Incorporated began studying ways to reverse that trend. The idea for the Cotton Fellowship Program grew out of a study sponsored by Cotton Incorporated in which suggestions came from producers.
Cotton Incorporated looked at the entire process, starting with developing a stable of breeders to insure the future of the industry and "fill the gap between the public and private sectors."
Currently, nine fellowship students at major land grant universities are working on projects aimed at improving fiber qualities. "Cotton Incorporated can facilitate the industry coming together to improve yields, quality and profitability," Worsham says.
Only in its second year, the Fellowship program, under the direction of Roy Cantrell, has already graduated one post-doctoral student. Joe Johnson became the first Fellow to become a full-time cotton breeder.
"The people in this program are the best and the brightest of new researchers," Worsham says. The program got a boost this year when Monsanto donated six cotton gene markers to Cotton Incorporated.
Cotton Incorporated keeps its finger on the pulse of industry partly by hosting tours of producers at its world headquarters. The Fellowship program grew out of grower concerns, as did the cottonseed program, when about 10 years a huge crop hurt cottonseed prices. "Growers asked us to develop programs to increase the demand of cottonseed," Worsham says. The result: increased use of cottonseed in the dairy industry and development of EasiFlo™ technology. Cottonseed research continues at Cotton Incorporated.
"Most of our agricultural research initiatives are based on feedback we get from U.S. growers," Worsham says.
Over the past seven years, Cotton Incorporated has hosted about 1,500 growers from across the Cotton Belt on tours of its world headquarters. It’s looking at taking the show on the road in various states.
"Listening is a two-way street," Worsham says. In the five years since he was named president and CEO of Cotton Incorporated, Worsham has missed only one tour. "We talk to growers on these tours to find out what’s on their minds as well as to communicate what we’re doing in research and marketing for cotton."
In the past two years, there have been a lot of producer concerns over the future of the U.S. textile industry. More than 100 mills have closed their doors in the past two years alone.
It’s a complex story of fewer U.S. mills, a strong U.S. dollar, the collapse of Asia currencies in 1997, a sluggish economy and a one-way liberalization of trade policies that have hurt the U.S. textile industry.
"The severe retraction of the U.S. textile industry is certainly a concern of everyone," Worsham says. "It’s happened in a fairly short amount of time. All of these factors worked up a perfect storm, so to speak, to hurt the textile industry."
Through its programs, Cotton Incorporated is working to help stabilize the situation. "We’re always trying to find a link between U.S. manufacturers and potential customers overseas, particularly in the Caribbean Basin," Worsham says. "Our customers are based more and more outside of the U.S."
Meanwhile, back on the home front, Cotton Incorporated continues to be on the frontline of fashion and fabric. The company makes use of focus groups to guide its direction on fabrics and fashion.
"A big part of our operation is developing new fabrics," Worsham says. Cotton Incorporated has a library of more than 5,000 samples of knits and woven products. The Global Marketing and the Textile Research divisions take new, innovative products to manufacturers and retailers both here and abroad.
There’s a big push for women’s wear and putting "a new finish on traditional fabrics" such as wrinkle resistance, UV protection, stain resistance and flammability.
As the top use category for cotton, denim is also getting the innovative Cotton Incorporated treatment. "At one time we looked at only supporting 100 percent cotton in denim," Worsham says. "Today denim that contains small amounts of other fibers, such as Lycra for stretch, is supported by our research because we believe that it expands the overall market for denim products."
Now, Cotton Incorporated is supporting a strategy that allows a couple of percent of Lyrca in blends with cotton. "That’s allowing us to expand the market," Worsham says. "There are not too many markets we’d pass up an opportunity to have 98 percent cotton in a product.
"Anything we can do to add value to the products will be a benefit for the U.S. cotton grower," Worhsam says. "It’s not one thing, but a combination of little things, such as wrinkle resistance, color retention, wicking, and other characteristics that will give the consumers what they’re looking for."
Ask anyone on the street and they’ll be able to identify the Seal of Cotton. Advertising is one of the most visible programs at Cotton Incorporated. Over the past 10 years the famous "Fabric of Our Lives" campaign has helped fix the public’s positive perception of cotton as the fiber of choice in garments.
"In the 1970s and early 1980s, our goal was to highlight the significant advantages of cotton versus manmade fibers in order to help us gain a foothold in the market," Worsham says.
"Our thinking going forward is to emphasize the specific aspects of cotton," Worsham says. "Consumers in this new generation weren’t exposed to the advertising of 20 years ago. We have to begin to teach them to pay attention to fiber content."
In addition to developing fabrics and influencing the purchase of cotton products, Cotton Incorporated plays a major role in agricultural research. Profitability is a catchphrase for research projects, which include precision agriculture, variety development and others aimed at the economics of production.
"On the producer side, U.S. growers have the technological advantage," Worsham says. "Technology has the ability to help U.S. producers stay in the game, despite the fact that our labor costs are much higher than in other countries.
"If we can ever get enough demand growing worldwide like we had before, there would be enough room for U.S. cotton to expand, not just take away the market share of other fibers," Worsham says. "If you can get enough demand created, it increases demand unilaterally for everybody."
While Worsham isn’t a prophet, he is an economist. He sees the cotton industry five years down the road with a somewhat smaller domestic base, a 17 million to 18 million-bale annual cotton crop, with two-thirds going overseas.
The year 2005 will be pivotal to the industry. That’s the year when quotas will be eliminated. "We could see another change in sourcing patterns," Worsham says. "There will be countries that are big winners and big losers.
"If you are surviving today as a textile and apparel manufacturing country only because you have a significant quota, you’re going to be in trouble," Worsham says. "In 2005, we’re going to find out who the players will be."
China, India, Pakistan and Bangladesh will benefit under the no-tariff scenario. "It will be a convoluted world where the customer one day is the competitor the next day. It will be very important to stay flexible and responsive as the world changes very rapidly."