Return to News Categories

Cattle - Hogs / Livestock News Currencies News Energy News Grain News Index News Interest Futures News Metals Futures News Reports: Crops, CFTC, etc Soft Commodities News

Futures and Commodity Market News

Building value through a sustainable cotton supply chain

Oct 04, 2019 (MarketLine via COMTEX) --

Fashion brands and retailers are far removed from the farmers growing the cotton used in their clothes - but bringing the two together is key to understanding the raw material's environmental impact and making make true sustainability claims about the cotton contained in their clothes.

Standing in the scorching heat of the mid-day sun in a field in northeast Louisiana, a US fashion executive mulls the scene: Row upon row of cotton plants stretching across the flat landscape as far as the eye can see, their fluffy clumps of soft white fibre starting to take shape.

"I'm surprised at how much work goes into the process, and if more people realised this they might think more carefully about sustainability."

Indeed, this was the aim of the 'Farm to Fashion' field tour organised last week by chemicals giant BASF to demonstrate its e3 sustainable cotton programme in action.  

And such was the level of interest that representatives from major US clothing companies including Ralph Lauren, Lee and Wrangler, JCPenney, Lands' End and J.Crew took a couple of days out of their busy schedules to see the whole cotton production process first-hand.

The visit took in everything from a cotton farm to a gin and warehouse, providing an opportunity to meet seed specialists, farmers, ask questions, walk the fields, and hear about the latest techniques in sustainable growing practices. And it culminated in a look around the new Vidalia Mills plant taking shape nearby, a $50m denim mill that will be the first to open in the US in almost a century and is exclusively using e3 cotton.

Poles apart

Sitting as they do at opposite ends of the supply chain, it's no wonder that most brands have little understanding of cotton farming – and that most cotton farmers don't understand retail. 

Yet cotton is one of the main components of clothing – and one of the raw materials most prone to smoke and spin about where it comes from, how it's grown, and by whom. And as companies come under mounting pressure to be more traceable and transparent about their product production chains, as well as meet internal corporate sustainability goals, there's an added impetus to be aware of the whole process from start to finish.

"As the number one material input in denim textiles, you don't really know your own product until you know the cotton that goes into it," explains Roian Atwood, senior director of global sustainable business at Kontoor Brands, the owner of denim brands Wrangler, Lee and Rock & Republic. 

"For an apparel company to know and care for where their cotton comes from is the greatest extension of corporate responsibility."

Robert Antoshak, industry consultant and managing director of Olah Inc, agrees, noting that understanding their supply chains back to the cotton fields and seeing how cotton can be grown according to exacting sustainability standards, "provides brands and retailers with the ability to make true sustainability claims about the cotton contained in their products."

And as both Atwood and Antoshak point out, not all cotton is equal. 

"Supply chains have the ability to obscure where things come from, how they were made, or in this case, who and how they were grown," Atwood says. "A grower can operate on a responsibility spectrum from land stewardship – looking to repair the earth and sustain a way of life for future generations – to something far more unconscious and inattentive, leading to a variety of environmental and human health consequences."

Antoshak adds: "My main takeaway from the past couple of days is that cotton can be traced from its origin through the textile supply chain without breaks in accountability as is the case with some programmes utilising 'mass balance' or even less exact means of tracing cotton through the supply chain."

Joining the dots

On a mission to try to join the dots across the textile supply chain is BASF's Agricultural Solutions division, whose e3 Sustainable Cotton programme – it stands for "socially equitable, economically viable and environmentally responsible" – offers a 100% certified sustainable and traceable solution that enables cotton to be tracked all the way from the seed to the farmer to the gin and right through to the merchant, mills and retailer.

Based around BASF's FiberMax and Stoneville cotton seed varieties (whose fibres are suitable for T-shirts/underwear and denim respectively), farmers commit to a continual improvement across a number of environmental and social measures. This is independently verified through the MyFarms software that tracks progress back to each grower, and monitors it against state and national averages. 

And the brands and retailers who join the programme not only affiliate with a process that is beneficial to the environment – but they also get to know exactly what their clothes are made of, how they're made, and where they started. Once licensed, a retailer will also have the opportunity to brand e3, Certified FiberMax, and/or Authentic Stoneville garments.

Sustainability focus

Since it was acquired from Bayer as part of a wider US$5.9bn acquisition 12 months ago, "our e3 programme is something that we've really focused on this past year," explains Jennifer Gasque Crumpler who, as director of fibre development at BASF, is managing the e3 initiative at a global level.

"We've invested a lot of time, energy and resources asking retailers and designers what they want? What does sustainability mean to them? Is it water efficiency, soil health, pesticide management, or greenhouse gas reduction?

"Our mission is to help build value for farmers, the textile makers, the brands and retailers. So we're here not just for one part [of the supply chain] or one practice, but truly for the whole community."

'Farm to Fashion' field tour 

The United States is the third-largest producer of cotton globally (behind India and China), with about 18,000 farms producing more than 20m bales of cotton across 17 southern 'cotton belt' states.

First stop on the tour was a visit to Hardwick Planting Co, a 20,000 acre family owned and operated farm growing cotton, corn, grain sorghum, soybeans, and wheat in northeast Louisiana. 

For fourth generation farmers Mead and Marshall Hardwick, advances in farming practices and cutting-edge equipment have gone hand-in-hand with environmental stewardship and conservation to improve yield while using less land, reducing water and energy inputs, fighting erosion, and reducing greenhouse gas emissions. "We produce a bulk commodity so we think this is where we're going to stay relevant and competitive in a global market in the future," Mead explains.

With a team of just five people working the land, software determines optimum plant nutrition to meet yield goals, and moisture sensors in the ground prevent over-watering.

A 16-row precision planter allows cotton to be sown at around 8 miles per hour to a predefined seed rate and depth, with GPS and auto-steer systems aligned to each field. Crucially, the planter is so accurate it saves on seed costs, prevents over-planting and also cuts fuel use.

An $850k investment in a state-of-the-art John Deer cotton picker means harvesting can be carried out at a rate of around 100 acres per day, with the cotton packed into 480 pound round bales. To speed time and maximise efficiency even further, next steps are likely to see a move to full automation, with picking equipment running for 24 hours a day without an operator.

A focus on conservation practices includes crop rotation, planting of cover crops, minimum tillage, and the introduction of field borders, filter strips, and wetland restoration.

These have contributed to reduced topsoil loss and improved soil health, as well as helping to tackle climate change, since less disturbance to the soil can cut greenhouse gas emissions, and increased use of cover crops can sequester more carbon out of the atmosphere.

Across the 20,000 acres there are 2,000 acres of streams and bayous, while around 6,000 acres of unproductive or flood-risk land have been returned to their natural habitat under the Conservation Reserve Program. An increase in biodiversity means more natural pollinators such as bees and butterflies, and a rise in numbers of rabbits, quail and black bears also suggests this policy is paying off.

Farm worker fairness is reflected in fair wages, fair treatment of workers, and a safe working environment – and the three employees who have worked with the Hardwicks for the past 30 years are more like family members than employees, the brothers say. And with three young children himself, Mead is passionately aware of the need to ensure the farm's future for the next generation.

Traceability platform

The whole process is tracked on the MyFarms digital platform. The enrolment process for e3 cotton farmers captures all of the data from the grower's farm – from how many rows are planted, to how far the cotton gin is from the field so that carbon footprint can be calculated.

Every bale of e3 cotton records the name of the farmer and exact field where it was grown, as well as data on environmental impact in areas such as water efficiency, pesticide management and usage, soil and fertility management, greenhouse gas reduction, energy conservation, worker health and safety, and identity preservation.

Random third-party verification adds another layer of authentication and reassurance to the scheme.

"Because we capture all this to a field level we can truly measure back to the growers where the cotton came from. We know which bales came off which field [thanks to IDs tagged to each one], and we can trace these through the gin to the mill via the merchant," Crumpler explains.

Which is no mean feat given that there are hundreds of gin points across the United States, where seeds and other debris are removed, the raw fibre is cleaned and graded on staple length and quality, and packed into bales. These bales then head to a warehouse before being sold to merchants and mills. Each bale of cleaned cotton lint can make more than 200 pairs of jeans, or 1,200 T-shirts.

"And because the FiberMax and Stoneville seeds are grown across the cotton-growing states we can get multiple gin points [the E3 cotton from gins in different states can be blended] which makes for better quality," Crumpler adds.

Virtuous circle

Partnerships have already been forged with brands such as Wrangler, whose Rooted Collection jeans launched earlier this year are made from 100% sustainable, locally-sourced e3 cotton grown, milled, cut and sewn in five American states.

And a deal with US$50m start-up Vidalia Mills – the first denim mill to open in the US in almost a century – will see it become the first to exclusively use 100% e3 cotton sourced from across the US farm belt to build a transparent and sustainable denim supply chain in the United States.

"We've had so much interest on a global level from other mills who are watching this programme and see that it can work," Crumpler tells just-style.

Plans are now in the pipeline to make use of BASF's global footprint to expand the flagship US-based e3 programme to countries such as Turkey, Greece and Brazil.

"A lot of companies are looking for different opportunities, new markets where they can open up, and something unique to set them that's where we're able to partner with everyone in the value chain to offer a solution."

BASF has expanded the programme from around 300k bales enrolled in North and South Carolina (under Bayer) "to the whole US cotton acres where our FiberMax and Stoneville are grown, so we'll have around 1m bales grown this year, from across the whole cotton growing states in the US."

And looking ahead, there's buy-in from growers to increase acres moving forward to the 2020 season. 

"We knew demand was getting bigger, and that's why we've expanded across the whole cotton belt. When we can show the value the programme brings we're seeing more demand from the growers and farmers, and we're seeing more demand from the buyers – and that's helping us with our growers to get more acres of it out there available.

"My vision is for the brands to say 'our cotton was grown with this farmer,' and to make that personal connection, and to tell the story and make an emotional connection with consumers," she adds. "And we want to partner with them to get the metrics and measurables to help build their company goals for sustainability and the environment."

The cotton conundrum

Few natural fibres are as contentious as cotton. Conventional cotton production is particularly fraught, with environmentalists criticising it for high water and pesticide use; and social advocates panning it for containing "genetically modified organisms."

But, as with most things, the positives and negatives need to be viewed in perspective.

Cotton is an inherently heat and drought tolerant crop that grows in arid areas, and according to some calculations it takes less water to grow an acre of cotton than it does an acre of lawn grass or soybeans. Almost all cotton seeds grown in the US are genetically engineered – including the FiberMax and Stoneville varieties – improving yields and quality as well as cutting pesticide use thought an inbuilt resistance to pests.

Organic cotton, in contrast, grows from non-genetically modified seeds – but the downside is that in order to get the same fibre yields as a conventional crop requires more organic plants, which means using more land, more intensive tillage (which leads to soil loss and degradation and is linked to higher greenhouse-gas emissions) and more irrigation. There are also claims some organic pesticides can be worse for the environment than conventional ones.

Selecting the fibre is only half the decision: where it is grown and refined also matters. In the US – and this is the model being built by Vidalia Mills – it is possible to have the whole cotton supply chain from field to garment within a relatively small area, which cuts down on transportation and subsequently, pollution and carbon emissions.

Cutting through all this is one strong message that seems to stand out: the shift to more sustainable cotton. Cotton that incorporates sustainable agricultural practices, that has a positive impact on the environment, is transparent and traceable throughout the supply chain, brings benefits that brands can boast about, and ultimately resonates with consumers who are increasingly turning to brands that not only talk about responsibility but demonstrate it through their business practices. And it's this that BASF is building its e3 programme on.
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall 
not be liable for errors or delays in the content, or for any actions 
taken in reliance thereon

Copyright (C) 2019 Datamonitor. All rights reserved

Please read the End User Agreement.
By accessing this page, you agree to the terms and conditions of the End User Agreement.

News provided by COMTEX.

Extreme Futures: Movers & Shakers




Today's Hottest Futures
Market Last Vol % Chg