US Cotton to shut down Rio Rancho production

The Rio Rancho U.S. Cotton location will be ceasing production in 2025.

In an announcement Wednesday afternoon from U.S. Cotton, LLC, the company said it will be consolidating consumer products manufacturing from the local facility to those in Cleveland, Ohio, and Belmont, North Carolina. The announcement said "rising raw material costs and increased competition have impacted the cost competitiveness of domestic cotton consumer products manufacturing. Consolidation of facilities is necessary for U.S. Cotton to maintain the company's position in the highly competitive consumer products business."

According to the U.S. Cotton website, the company was founded by Anthony Thomas in 1983 as an importer and distributor of Swiss Beauty cotton pads in California. In 1990, the company relocated to Rio Rancho and began to manufacture and distribute cotton balls and pads. Over the years, it went through a number of mergers and acquisitions, and in 2003 began manufacturing paper sticks and a newly constructed factory in Rio Rancho. In 2005, U.S. Cotton invested in USC Bag Manufacturing, supplying 100% of its plastic bag needs from the Rio Rancho facility.

Rio Rancho production will be discontinued in phases, Wednesday's announcement said, with complete shut down expected in the third quarter of 2025. The company did not say how many jobs would be affected.

"We want to express our sincere gratitude to U.S. Cotton for their many years of commitment and contribution to Rio Rancho," said Jerry Schalow, president and CEO of the Rio Rancho Regional Chamber of Commerce. "While we are saddened by their decision to consolidate manufacturing operations, we remain optimistic about the future of our local workforce."

"U.S. Cotton has been a long-time community partner here in Rio Rancho," Mayor Gregg Hull said. "While it is disappointing to see them close the Rio Rancho facility, I am grateful for the 20-plus years they have invested in our community."

Other aspects of the cotton market

Though U.S. Cotton is a consumer products company, recent USDA data on the cotton market predicts lows in other parts of the cotton industry, particularly cotton mill use.

In January, the USDA predicted that U.S. cotton mill use would drop to a level not seen in more than 100 years in the 2023-24 marketing year, which ran August to July. It was predicted 1.9 million bales of raw cotton would be processed into textiles, a level not seen since 1884-85, when 1.7 million bales were processed.

"U.S. cotton mill use has been mostly on a downward trend since the early 1940s when cotton use peaked during World War II," the USDA January report reads. "Soon after the end of the war, synthetic fibers were developed and began substituting for cotton. Use of synthetics in the production of textiles continued to expand and further reduced cotton mill use through the early 1980s, when the downward trend was dramatically reversed."

Use of cotton again peaked in the 1990s but again hit a downward trend in the 2000s as production moved to other countries. "Although U.S. raw cotton exports benefited from increased foreign mill demand, U.S. cotton mill use weakened, and the downward trend led to the near historically low 2023-24 U.S. cotton mill use projection," the report concludes.

An Aug. 14 USDA market outlook projected that with increased cotton production outpacing a rise in mill use, global cotton prices are projected to decline for the third consecutive year in 2024-25.

Looking forward

“This was a difficult but necessary decision,” said Jacob Burroughs, president and chief executive officer of U.S. Cotton. “Our Rio Rancho facility was U.S. Cotton’s first manufacturing plant and is important to the company’s history. U.S. Cotton is aware of the impact this decision will have on its Rio Rancho employees. The company is taking steps to make this difficult transition as smooth as possible, and we will work with local and state officials to help ensure that all training resources are made available to affected employees.".

Local officials are also ready to help U.S. Cotton employees through the transition.

"We look forward to partnering with NM Workforce Solutions to help transition current employees to new opportunities," Hull said.

"U.S. Cotton has been a vital component to the growth and development of Rio Rancho and its economy since it located to the community," said Fred Shepherd, president and CEO of Sandoval Economic Alliance. "Sandoval Economic Alliance, along with the Department of Workforce Solutions and the NM Economic Development Department, will continue to support U.S. Cotton and their employees through this period of transition. We have already begun identifying regional employers with hiring needs to assist those being impacted. We have also begun to work with the brokerage community to help market the existing real estate and attract additional employers and job opportunities to our community."

"We look forward to working closely with U.S. Cotton employees to help them transition into new and exciting opportunities within our vibrant community," Schalow said. "Additionally, we are committed to finding a new, dynamic manufacturing company to continue driving growth in the Rio Rancho economy."