Impacts on Southeastern Cotton Industry By Savannah Port and Panama Canal Expansions

The US is the world’s third largest cotton producer and the world’s largest cotton exporter.  US cotton production is concentrated in the Southern Plains, the Southeast, the Delta, and the West.  Texas produces one-third of all US cotton, followed by Georgia with twenty-percent.  Of the upland cotton produced, most is in the Southeast.  Transportation is one of the major factors that affect the competitive position of US cotton, allowing for the delivery of cotton to international markets in a timely and cost effective manner.  Improvements in the US transportation network ultimately influences cotton mill use, cotton exports, shipping patterns, and world trade through the Atlantic ports as the Panama Canal expansion accommodates larger container ships.  Consequently, deepening or dredging the Southeastern ports of Savannah and Charleston is needed to allow for deeper and wider draft container ships.  The completion of these expansions has major implications for altered shipping patterns for cotton throughout the US and Southeast, including total cotton exports to rise approximately five-percent, reduction in ocean freight rates, regional shifts in trade and market share, and prices and producer revenues will experience regional shifts, favoring cotton producers in the Southeastern states at the expense of the West Coast.