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Natural fibers and food proteins in Texas.

Natural Fibers and Food Proteins in Texas

Since the early days of the Texas frontier, agricultural production has been both a source of livelihood for the state's rural population and a viable source of capital formation, international trade, and economic development for the entire state as well. A group of agricultural commodities that has successfully made the transition from frontier days to modern times is referred to as natural fibers and food proteins. This grouping includes cotton, wool and mohair, and such oil-seed crops as cottonseed, soybeans, and peanuts.

These agricultural commodities are raw material inputs in the production of diverse and increasing numbers of end-use products. Final consumer uses include home textile and apparel items as well as the vegetable oils in many food products. Agricultural producers use the protein-rich oilseed meals as livestock feeds, and industrial manufacturers use cotton fibers in the production of manufactured goods ranging from paper products to commercial textiles. It has been estimated that over 17,000 businesses in Texas (including farms, gins, commodity brokers, warehouses, oil mills, and textile mills) are affected by the production of cotton alone, contributing to 58,000 jobs and $3 billion in revenue in 1982.

Although the value of production of the raw products (cotton lint, cottonseed, wool, mohair, and bulk oilseeds) represents only 12 percent of the total value of agricultural production in the state, Texas often leads the other states in their production. For the past thirty years, Texas has produced about one-third of the U.S. cotton crop on one-half of the nation's acreage devoted to cotton, averaging 2 billion pounds of ginned lint a year. Texas also provides 97 percent of all U.S. - produced mohair, averaging 15 million pounds annually, a production level second only to that of South Africa. At 18 percent of total U.S. wool production, Texas maintains the highest inventory of sheep in the nation, 1.9 million head.

The combined value of production of these commodities in Texas averaged $1.4 billion a year in the five-year period between 1983 and 1987. It has been estimated that every $1 of production value has an effect of $3.27 across all Texas industries that are producers of agricultural inputs or consumers of the raw food protein or fiber products. Thus a $1.4 billion production value generates a production impact of $4.7 billion.

As is true for many agricultural products, the bulk of natural fibers and food protein commodities are shipped out of the state in their raw form to be processed elsewhere, then shipped back into the state in the form of final consumer products. At price spreads of $1.50 to $50.00 per pound between ranch prices for raw wool and retail prices for wool apparel products, or $.50 to $5.00 per pound between raw cotton and denim cloth, the economic loss to the state's economy is significant. An estimated 5-11 percent of Texas cotton, wool, and mohair fiber production is, however, processed in the state.

Although the state is not yet reaping all the potential rewards of value-added processing, agricultural producers have been tenacious in a tough global market. Recent events highlighted the activities of Texas High Plains cotton farmers. On February 21, 1989, cotton trading history was made as the Chinese unexpectedly purchased 700,000 bales of U.S. cotton, a world record volume traded in one day. Fifty-five percent of these sales were made through "Telcot," an electronic marketing service of the Plains Cotton Cooperative Association. Additional sales by High Plains growers contributed to a return of $10 million to the area.

These sales represent the return to producers for their investment in computer technology, specialized breeding research, ongoing producer education, and aggressive marketing strategies targeted to final consumer sales. But these producers know that modernization of production is not enough to ensure the maximum economic return for their efforts. It has been estimated that capturing 1 percent of the total U.S. market for woven cloth sales could return $20 million to the state from increased gross sales. This value-added potential is motivating today's natural fibers and food protein producers to explore strategies to further develop the state's textile processing to retail sales of apparel. Through such efforts, these producers continue to play a vital role in the development and diversification of the Texas economy.

Cheryl Chance Research Associate Bureau of Business Research
COPYRIGHT 1989 University of Texas at Austin, Bureau of Business Research
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:agricultural production
Author:Chance, Cheryl
Publication:Texas Business Review
Date:Jun 1, 1989
Words:733
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