Sometimes the laws of supply and demand don’t behave as expected. Take cotton: the road from seed to shelf is long and complex, with price increases arriving too late to benefit the farmers who grew it. In this exclusive interview with Hertzman Global Intelligence, Tricia Carey, chief commercial officer of ag biotechnology company Avalo Inc., explains why cotton’s timeline puts more risk on farmers and how reducing input costs could restore some control.
HGI: Cotton prices are going up. Isn’t this good news for farmers?
Tricia Carey: There’s a persistent misconception that a price increase on the futures board flows immediately back to the farmers, but that’s simply not how the cotton supply chain works. Growers typically forward-contract or sell at harvest, while merchants, traders, spinners and brands hold inventory and capture the upside as the fiber moves through ginning, spinning, weaving, cut-and-sew and retail. By the time a t-shirt reflects a higher cotton price, the U.S. grower who produced that fiber sold it 12 to 18 months earlier, often locking in the price well before then.
It’s spring 2026 now, and U.S. growers in the West are currently planting cotton that won’t be sold until late 2026 – 2027. That fiber may not reach a finished garment until 2027 or 2028. Farmers carry the production risk, but they are structurally last in line for the reward.
HGI: In today’s cotton value chain, where is the greatest value capture happening and how can farmers gain more control?
TC: Value capture has steadily migrated downstream over the past two decades, from the gin and the merchant to brands and retailers that own the consumer relationship. Vertical consolidation, private label expansion and the rise of fast fashion have compressed the share of every cotton dollar that flows back to the field. The grower takes on more risk, more input cost and more climate exposure, while the margin moves to whoever owns the brand or store. This is why it’s more impactful to farmers’ bottom lines to affect things that farmers can control, like higher efficiency and lower input costs.
HGI: All of this while margins continue to be squeezed. How do severe weather, war and other external factors impact farmers and the industry as a whole?
TC: Even when cotton prices firm up, growers are facing input inflation that erodes (or erases) the gain. Fertilizer, fuel, financing at elevated interest rates, and crop protection have all stepped up meaningfully. The Middle East conflict has rippled through global fertilizer markets, increasing logistics and energy costs, which cuts directly into the farmer’s profitability.
This is particularly challenging because the growers are the ones taking on more risk. Increasingly unpredictable weather and rising input costs put pressure on farmers who have no leverage.
Putting more pressure on farmers could have very real implications for the industry. Historically low margins for farmers have led to record-high field abandonment rates, and if we don’t find ways to stabilize the beginning of the supply chain, there is very real risk of cotton shortages in the coming decade
HGI: How would a sharp increase in cotton prices impact all of this?
TC: Spikes look like an opportunity from outside the farm, but for growers, they signal volatility, which is risk. When the price band widens, farmers tighten. They plant fewer acres of cotton, shift to lower-input rotations, or hedge more conservatively rather than chase a peak they can’t reliably capture. At a system level, this constrains supply and reinforces an unresilient cycle.
HGI: If higher prices won’t benefit farmers, what would?
TC: The honest answer is that this isn’t really a price problem; it’s a demand problem. Farmer income comes from growing demand for U.S.-grown, responsibly produced cotton, not from chasing short-term price spikes that growers rarely capture anyway. That means brands committing to longer-term sourcing relationships, policy that rewards sustainability and climate-smart practices at the farm level, and a value chain willing to share risk with the people who carry it (the growers planting cotton right now.)
Put another way, we need to change how we value farmers and the health of their land. We can, and must, invest more in the foundations of our fiber system if we want to keep it thriving in the decades ahead.
HGI: What is Avalo doing to help change the economics for farmers?
TC: It is because of all these dynamics that we at Avalo focus on being “farmer-first.” Our low-input cotton program (focused first on dryland cultivation in High Plains Texas) is a real-world proof point. The Avalo cotton program uses 75% less fertilizer and no irrigation, dramatically lowering the input bill that’s been eating growers’ margins. The impacts of our 2025 cotton harvest was a 50% reduction in carbon footprint, while delivering quality equal to or better than regional averages.
This changes the economics, because it focuses innovation on dynamics that can be controlled on the farm. Not only does crop resilience immediately impact the bottom line in the form of lowering cost of inputs, it also tacks on benefits, including lower crop failure risk due to weather, better soil health due to less synthetics, protection of local water tables, and the ability to produce more marketable fibers that future-looking brands are increasingly hunting for.
