This United States Department of Agriculture summary report focuses on the revenues, costs, and finances of specialized cotton farms in 1986. The report also provides general information on all farms producing cotton. The data on which the report is based are from the 1986 Farm Costs and Returns Survey. Some of the conclusions drawn from the study are the following: (1) specialized commercial cotton farms--those with at least 50 percent of the value of their production from cotton and with at least $40,000 in total production--had relatively high net returns compared with other specialized field crop farms in 1986; (2) specialized cotton farms experienced more financial stress than most other types of farms; (3) low yields, yield quality problems in several areas, and low cotton prices were partly to blame for this financial stress; (4) large farms with sales of $250,000 or more had the most favorable returns and cost structures; (5) U.S. cotton production is concentrated in three areas that account for more than 90 percent of total production--the Delta, the Southern Plains, and the West; and (6) specialized cotton farms in the Southern Plains had the lowest returns and the highest incidence of financial stress among the major cotton regions. (KC)