The United States produces over one-fourth of the world cotton crop. Most of the Llano cotton is grown for export. The international market trades in inferior-grade cotton more so than the domestic market. The industry has experienced several major market swings in the past decade, and the bottom fell out of the local agricultural economy in the early to mid-1980s. Sluggish regional and world economic growth, the heavy debt burden of many countries, the high value of the dollar, and the success of agricultural programmes elsewhere reduced domestic and export demand.
Yields hit record levels and surpluses quickly accumulated despite planting-reduction programmes.
Increased stocks depressed commodity prices and lowered farm income. Locally, irrigation costs continued to escalate and interest rates were phenomenally high. Cotton yields in the area declined at a rate of about 11 kg per hectare per year between 1965 and 1985, although increases were recorded in 1987 and 1988. A major factor in maintaining the farming economy of the Llano has been, and still is, the US government's involvement in financial support and planting area controls. These programmes, administered through the Agricultural Stabilization and Conservation Service, provide for commodity loans and purchases as well as price support and production adjustment payments to farmers.