Cotton has long been a cornerstone of Arizona’s agricultural economy, contributing significantly to the state’s economic vitality while demonstrating remarkable strides in environmental efficiency. A comprehensive study conducted by the University of Arizona Cooperative Extension quantifies the economic contributions of cotton farming and ginning to Arizona’s economy in 2022, based on the most recent USDA Census of Agriculture.

The study not only highlights the direct economic impacts of these activities but also accounts for indirect and induced multiplier effects, which capture economic activity in related industries and household spending. Additionally, the study examines trends in pesticide use and water efficiency, showcasing Arizona’s leadership in sustainable cotton production.

The May 2025 Study, conducted by Claudia Montanía, George Frisvold, and Dari Duval, Department of Agricultural & Resource Economics, University of Arizona Cooperative Extension, confirms the impact of this storied crop in Arizona agriculture.

“Aside from the top line dollars and job numbers, things that stuck out to me were first the big drop in pesticide use,” said George Frisvold, Professor & Extension Specialist in the Department of Agricultural & Resource Economics. “Arizona cotton used to be a high-pesticide use crop; now it is a low-pesticide use crop. Arizona’s drop compared to the rest of the Cotton Belt is a testament to the state's Integrated Pest Management programs. The improvement in water use efficiency is also impressive.  Arizona cotton growers are getting a lot more "crop per drop" than they did 40 years ago.” 

 

Economic Contributions of Cotton Farming and Ginning

In 2022, Arizona’s cotton industry—encompassing both farming and ginning—generated substantial economic activity across the state. The study estimates the total economic contribution at $322 million in sales, including multiplier effects. This figure breaks down as follows: $176 million in direct sales from cotton and cottonseed and approximately $9.6 million from cotton ginning. Beyond direct sales, the industry supported $59 million in labor income and contributed $132 million to Arizona’s Gross State Product (GSP), which measures the value added to the economy. Additionally, the cotton sector sustained 1,446 jobs, with 862 jobs directly in cotton farming, 188 jobs in cotton ginning, and 396 jobs in other Arizona industries supported through multiplier effects.

The economic impact of cotton extends beyond the fields and gins. Indirect multiplier effects capture the economic activity generated in non-agricultural industries that supply goods and services to cotton production, such as equipment, fertilizers, and transportation. Induced multiplier effects reflect spending by households employed in the cotton industry, supporting consumer-facing industries like retail, healthcare, and food services. Together, these direct, indirect, and induced effects illustrate the cotton industry’s far-reaching influence on Arizona’s economy.

Arizona’s Standing in National Cotton Production

Arizona ranks among the top three producers of Pima cotton in the United States, a high-quality, extra-long-staple variety prized for its strength and softness. This distinction underscores the state’s competitive edge in the global cotton market. At the county level, Pinal County stands out, ranking in the top 1% of U.S. counties for cotton and cottonseed sales. Graham County is in the top 10%, while Yuma and Maricopa Counties fall within the top quarter, and Pima County ranks in the top third nationally. These rankings highlight the geographic concentration of cotton production in Arizona and its significance to local economies.

Advances in Pesticide Use and Water Efficiency

Arizona’s cotton industry has made remarkable progress in reducing its environmental footprint, particularly in pesticide use and water efficiency. From the mid-1990s to 2023, Arizona cotton growers reduced pesticide applications from 9 per acre to just 0.58 per acre, a dramatic decline. This reduction lowered pesticide application costs from $244 per acre to $17.51 per acre, enhancing the economic viability of cotton farming. Notably, Arizona’s 0.58 pesticide applications per acre in 2023 were the lowest among cotton-producing states and less than one-fifth of the U.S. national average of 3.2 applications. These achievements reflect the adoption of advanced pest management practices, including integrated pest management (IPM) and precision agriculture technologies.

Water efficiency has also improved significantly. In 1984, Arizona cotton growers applied an average of 4.9 acre-feet (AF) of irrigation water per acre, yielding 242 pounds of cotton lint per AF. By 2023, water use had decreased to 4.2 AF per acre, while yields increased to 299 pounds of cotton lint per AF. This represents a 32% increase in cotton produced per unit of water, demonstrating the industry’s commitment to sustainable water management in a water-scarce region. Innovations such as drip irrigation, improved crop varieties, and data-driven irrigation scheduling have driven these gains, ensuring that Arizona’s cotton industry remains both productive and environmentally responsible.

Methodology: Measuring Economic Impact

The study employed the IMPLAN input-output model, a widely used tool for estimating the economic contributions of specific industries. IMPLAN accounts for direct, indirect, and induced effects, providing a comprehensive picture of how cotton farming and ginning ripple through Arizona’s economy. To ensure accuracy, the researchers modified the IMPLAN model using data from multiple sources, including the 2022 USDA Census of Agriculture, USDA National Agricultural Statistics Service (NASS), USDA Economic Research Service, and IMPLAN itself. This approach was necessary because cash receipt data for cotton farming and ginning in Arizona are often unavailable due to confidentiality restrictions. By cross-referencing these sources, the study achieved a robust estimate of the industry’s economic contributions.

Implications for Arizona’s Economy and Beyond

The findings of this study underscore the cotton industry’s dual role as an economic driver and a leader in sustainable agriculture. The $322 million in total sales and 1,446 jobs supported by cotton farming and ginning highlight its importance to Arizona’s rural communities and broader economy. Counties like Pinal, Graham, Yuma, Maricopa, and Pima benefit disproportionately, with cotton serving as a key source of revenue and employment. The industry’s multiplier effects further amplify its impact, supporting jobs and businesses in sectors ranging from equipment manufacturing to retail.

Moreover, Arizona’s cotton growers have set a national standard for environmental stewardship. The drastic reduction in pesticide use and improved water efficiency demonstrate that economic growth and sustainability can go hand in hand. These advancements not only lower production costs but also position Arizona’s cotton industry to meet growing consumer demand for sustainably produced goods.

Ultimately, Arizona’s cotton industry remains a vital component of the state’s economy, contributing $322 million in sales, $59 million in labor income, $132 million to Gross State Product (value added), and 1,446 jobs in 2022.

Its national prominence in Pima cotton production and top-ranking counties underscore its competitive strength. Simultaneously, the industry’s environmental achievements—reducing pesticide applications to the lowest in the nation and increasing water efficiency by 32%, set a benchmark for sustainable agriculture. As Arizona continues to balance economic growth with resource conservation, the cotton industry stands as a model of innovation and resilience, ensuring its enduring importance to the state’s economic and environmental landscape.