What's up with Fabric Prices??

Have you gotten "sticker shock" buying fabric lately? The prices on cotton fabric have been rising steadily for the last year or two. Just four years ago, my average price per yard was in the $8 range, and now it is in the $10 range--Ouch! So what's up, and will prices keep going up?

Cotton--isn't it pretty?!

Let's start with WHY prices are going up. It's largely due to the weakening dollar and that old "supply and demand" rule. Premium goods are printed in Korea and Japan where the dollar is weak. Of course we have yet to see what the tsunami will do to affect prices on goods coming out of Japan. We are also in the midst of a two-year, world-wide cotton shortage. Crops have been hit with a string of bad harvests; India and China, the two largest suppliers, have either stopped or are restricting their exportation because of increasing consumption by their own people. Starting to get an idea of what's going on here??

Yummy!

 The quilting industry is actually quite small comparatively, and it takes specialized print mills to produce the yummy designs that we crave. At one time there were about 25 mills that could produce our prized quilting fabrics, but now there are only 10! Customs costs have increased because when the fabric arrives here, customs is based on the higher price of goods--a double whammy.  Shipping costs continue to rise as gas prices rise. Anything made with cotton is being affected, and retailers such as Levi's hint at price increases as they struggle with the same issues. It all sounds pretty ominous, doesn't it?!

Well, I think it's about time to hear some good news, don't you? Thankfully, there IS some good news. First off, this is not the first time there has been a sharp rise in cotton prices. Interestingly, cotton increased from $0.10/lb to $1.89/lb during the American Civil War in the 1860s. Since America was the largest producer of cotton at the time, about 2.5 million bales of cotton were burned to create the shortage in a failed attempt to draw Europe to it's defense. Prices returned to "normal" after 15 months or so.

Yummy, too!

Secondly, when we consider inflation in our data, we find that prices for cotton during the last decade were historically low. Data suggests that quilt fabric prices have gone up about 44% in 20 years. Sounds high, huh? But wait a minute--how about that loaf of bread you bought at the grocery store. Did you realize that's gone up 284% in the same amount of time? And the ground beef you're having for dinner this week--that's gone up 270%. Bought a new car recently? Cars have gone up an average of 65%. Hmmm, I'll take that 44%!

So what does this all mean? There really is a valid reason for the prices to go up. When you bundle the worldwide shortage, the increasing costs of doing business, and inflation, it only makes sense that prices have to go up. Will they come back down? Maybe, but probably not to the $8 a yard range; however, to keep things in perspective, a quilt that uses 10 yards of fabric to complete at $8 a yard would cost $80; at current average prices of $10 per yard, it would cost $100. That's only $20 more. Here's hoping the higher cost of goods will not prevent us from seeing the larger picture and doing what we love!

Have any thoughts on the subject? I'd love to hear them!

Resources for this post are:

1. "Cotton Prices: Historical Data and Shopowner Perspectives" from FabShopNews Magazine, February 2011
2.  "Wondering what's up with cotton prices?" by Jim Salinas from American Quilt Retailer, January 2011
3.  "What's Up with Cotton?" industry leaders' statements compiled by Susan Fuquay for American Quilt Retailer, March 1, 2011
4.  "Flashback to 1870 as Cotton Hits Peak" by Adam Cancryn and Carolyn Cui from the Wall Street Journal Online, October 16, 2010