NAICS 111920 Quarterly Industry Report
Cotton Farming
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 111920Sector: Agriculture, Forestry, Fishing and Hunting (11)Updated: Q1 2026
About This Report
This Fair Market Value industry profile for NAICS 111920 provides business owners, buyers, and valuation professionals with sector-specific benchmarks and market context for cotton farming operations. Additional data is drawn from Bureau of Labor Statistics[5], U.S. Census Bureau[6].. Content is compiled from USDA NASS[3] crop production reports, USDA ERS[4] cotton market outlook data, and SBA[7] regulatory filings to support informed valuation and transaction analysis.
Industry Definition & Overview
Cotton Farming (NAICS 111920) encompasses establishments primarily engaged in growing cotton, including upland cotton and extra-long staple (ELS) varieties [1]. The United States is one of the world's largest cotton producers, with total production for the 2024-25 season estimated at 14.41 million bales across 11.18 million planted acres and 7.81 million harvested acres, yielding roughly 880 pounds per harvested acre for upland cotton [2]. Texas dominates national output, followed by Georgia, Mississippi, Arkansas, and other southeastern and southwestern states. The cotton supply chain from field through gins, warehouses, oilseed mills, and textile mills[3] accounts for more than $35 billion in total products and services annually [3].
Cotton farming operations range from small family farms growing a few hundred acres to large commercial enterprises cultivating thousands of acres with mechanized planting, cultivation, and harvesting equipment. The crop is typically grown in rotation with soybeans, corn, peanuts, or grain sorghum to manage soil health and pest pressure. Key industry challenges include commodity price volatility tied to global supply-demand balances, weather risks including drought and hurricane damage in Gulf Coast regions, input cost inflation for seed, fertilizer, and crop protection chemicals, and competition from synthetic fibers and foreign cotton producers. Per USDA ERS[4] market outlook reports, U.S. cotton exports remain a major component of industry economics, with China, Vietnam, Pakistan, and other textile manufacturing nations serving as primary destination markets.
What's Included in This Industry
- Upland cotton farming operations
- Extra-long staple (ELS/Pima) cotton production
- Irrigated cotton farming
- Dryland cotton cultivation
- Cotton grown in rotation with other row crops
- Organic cotton farming operations
- Cottonseed production as a secondary crop product
- Other cotton farming establishments
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Agriculture, Forestry, Fishing and Hunting | 11 |
| Subsector | Crop Production | 111 |
| Industry Group | Other Crop Farming | 1119 |
| NAICS Industry | Cotton Farming | 11192 |
| National Industry | Cotton Farming | 111920 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 115111 | Cotton Ginning | Cotton ginning establishments that process raw seed cotton from farms into lint bales and cottonseed, forming the first step in the post-harvest supply chain |
| 111130 | Dry Pea and Bean Farming | Dry pea and bean farming operations that serve as rotation crops with cotton in southeastern and southwestern production systems |
| 111150 | Corn Farming | Corn farming operations frequently rotated with cotton on farms across the mid-South and southeastern growing regions to manage soil fertility |
| 111998 | All Other Miscellaneous Crop Farming | All other miscellaneous crop farming operations where cotton farms have diversified into specialty crops to supplement commodity crop revenue streams |
| 111910 | Tobacco Farming | Tobacco farming operations concentrated in southeastern states that share similar agricultural labor markets and farmland characteristics with cotton regions |
| 115112 | Soil Preparation, Planting, and Cultivating | Soil preparation services providing field preparation, precision leveling, and irrigation infrastructure installation for cotton farming operations |
SBA Lending Summary
8
Total SBA Loans
$1.2M
Total Loan Volume
$150K
Average Loan Size
10 yrs
Average Loan Term
12.75%
Average Interest Rate
40
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[2]
Key Insight: The SBA[7] classifies Cotton Farming under NAICS 111920 with an annual receipts size standard of $3.25 million [4]. Farms at or below this revenue threshold qualify as small businesses for federal procurement preferences, SBA-backed loan programs, and agricultural disaster assistance. While many cotton operations exceed this threshold due to the acreage-intensive nature of production, the standard applies to total receipts including government payments and crop insurance indemnities. Eligible businesses can access SBA 7(a) loans[8] for working capital, equipment, and acquisition financing, while 504 loans[9] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | BayFirst National Bank | 8 | $1.2M | $150K |
Frequently Asked Questions
Common questions about this industry.
What crops are classified under NAICS 111920?
NAICS 111920 covers all cotton farming operations including upland cotton (the dominant variety accounting for roughly 97 percent of U.S. production) and extra-long staple cotton (also called Pima or ELS cotton) grown primarily in the Southwest [1]. The U.S. Census Bureau[10] classifies both irrigated and dryland cotton production under this code, as well as organic cotton farming operations.
What is the SBA size standard for cotton farming?
The SBA sets the small business size standard for NAICS 111920 at $3.25 million in average annual receipts [4]. This threshold determines eligibility for federal small business programs including SBA-backed loans, contracting preferences, and disaster relief. Per SBA regulations[11], receipts are calculated as a multi-year average and include government payments.
How large is the U.S. cotton farming industry?
U.S. cotton production for the 2024-25 season was estimated at 14.41 million bales across 11.18 million planted acres [2]. Per USDA NASS[3] data, Texas is the dominant producing state, followed by Georgia, Mississippi, Arkansas, and several other southeastern and southwestern states. The broader cotton supply chain accounts for more than $35 billion in products and services annually.
What are the primary valuation drivers for cotton farms?
Cotton farm valuation depends on total cultivable acreage and soil quality, irrigation infrastructure and water rights, farm program payment history and base acres, equipment inventory and condition, historical yields relative to county averages, and proximity to ginning facilities. Irrigated cotton land in the Texas High Plains and Mississippi Delta typically commands premium valuations compared to dryland acreage. Per USDA ERS[4] farmland value surveys, cotton-growing land values track closely with commodity price expectations and federal farm program support levels.
How do federal farm programs affect cotton operations?
Cotton farmers participate in several federal support programs including Price Loss Coverage and Agriculture Risk Coverage through the Farm Bill, the Marketing Assistance Loan program that provides short-term financing using cotton as collateral, and federally subsidized crop insurance through the USDA Risk Management Agency[12]. These programs provide a safety net against price declines and production losses, and their payment levels directly affect farm cash flow, land values, and overall enterprise valuation.
What role do exports play in the U.S. cotton market?
The United States is typically the world's largest cotton exporter, shipping a majority of its annual crop to overseas textile manufacturing centers. Major export destinations include China, Vietnam, Pakistan, Bangladesh, Turkey, and Indonesia. Per the USDA Foreign Agricultural Service[13], export volumes are heavily influenced by global textile demand, exchange rates, and trade policy developments including tariffs and bilateral trade agreements.
What are the main production costs for cotton farming?
The largest operating costs for cotton production include seed and technology fees (most U.S. cotton is planted with biotech varieties carrying trait licensing fees), fertilizer and crop protection chemicals, fuel and equipment operating costs, irrigation expenses where applicable, and ginning fees at harvest. Labor costs are relatively lower than many crop categories due to full mechanization of planting and harvesting. Per USDA ERS[4] cost-of-production data, total per-acre production costs for cotton have increased substantially over the past decade driven primarily by seed technology fees and fertilizer prices.
How does weather affect cotton production risk?
Cotton is vulnerable to drought during the critical flowering and boll development period, excessive rainfall and hurricanes during harvest season, and early frost that can reduce fiber quality and yield. The difference between planted and harvested acres in any given year often reflects weather-related abandonment, with drought in the Texas High Plains being the most common cause. Federal crop insurance through the USDA Risk Management Agency[12] is widely used, with the majority of U.S. cotton acreage covered under revenue protection or yield protection policies.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [3]gins, warehouses, oilseed mills, and textile mills nass.usda.gov
- [4]USDA ERS ers.usda.gov
- [5]Bureau of Labor Statistics bls.gov
- [6]U.S. Census Bureau census.gov
- [7]SBA sba.gov
- [8]SBA 7(a) loans sba.gov
- [9]504 loans sba.gov
- [10]U.S. Census Bureau census.gov
- [11]SBA regulations sba.gov
- [12]USDA Risk Management Agency rma.usda.gov
- [13]USDA Foreign Agricultural Service fas.usda.gov
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