By: Dr. Jody Campiche & Tas Smith, National Cotton Council
Georgia cotton producers are in the middle of another production season of high input costs and lower market prices, yet they are still operating under the 2018 farm bill, which is far too antiquated to address the current economic crisis.
Based on harvest yields, total 2025 per-pound production costs are one-third higher than they were in 2018. U.S. cotton producers are also facing numerous downward pressures due to declining U.S. export market share relative to Brazil and Australia over the same period, while Chinese polyester production continues to grow dramatically.
Thankfully, Congress is on the cusp of delivering meaningful enhancements to the cotton safety net. The One Big Beautiful Bill Act provides $67 billion in additional farm bill spending that will bring the cotton safety net more in line with current production costs. This is a big win for cotton producers, and the tireless efforts by Senate Agriculture, Committee Chairman John Boozman and House Agriculture Committee Chairman G.T. Thompson, and General Farm Commodities, Risk Management, and Credit Subcommittee Chairman Austin Scott have been vital to get our industry to this point.
The BBB increases the seed reference price from $0.367 to $0.42, effective for the 2025 crop. It also seeks to account for the enhanced payments by increasing the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payment limits to $155,000, indexed to inflation, and allows entities such as S-Corps and LLCs to be treated the same as general partnerships with regards to the structure of payment limits.
All Georgia cotton farmers stand to gain significantly from these reforms, though the benefit to producers enrolled in the PLC program – the most likely scenario – is especially easy to calculate. According to the June 2025 WASDE report, a producer with an 800 lb PLC lint yield is projected to receive $64/acre for the 2025 crop at the current $0.367 reference price. With the $0.42 reference price, the PLC payment would increase to $150/acre.
The following table provides additional data about the impacts of raising the PLC reference price:
Going back to 1990, a $0.42 reference price would have triggered a PLC payment in 32 of the last 35 crop years, at an average payment of $141/acre.
The BBB also solves many of the problems arising from current enrollment restrictions applying to PLC, ARC, and the Stacked Income Protection Plan (STAX), which is a cotton-specific area-wide insurance program. Right now, cotton growers are ineligible to purchase STAX if they are enrolled in either PLC or ARC. The BBB provides producers with better safety net options by (1) enhancing the Supplemental Coverage Option (SCO) area-wide policy so that it functions more like STAX, and (2) continuing to allow growers to purchase SCO and enroll their seed cotton base acres in PLC.
If the $0.42 reference price had been in place for the 2024 crop, a Calhoun County producer who purchased STAX on irrigated cotton acreage and enrolled seed cotton base acres in PLC would have been projected to receive a $130/acre PLC payment and a $180 STAX net indemnity (assuming a 75% individual insurance coverage level).
The BBB also provides needed changes to the marketing loan program by increasing the cotton loan rate to $0.55 while modifying the Adjusted World Price (AWP) calculations in order to provide more opportunities for marketing loan gains or Loss Deficiency Payments.
Make no mistake: the BBB is a major win for Georgia cotton growers.