U.S.

and World Cotton

Economic Outlook

June 2010

Prepared by:
Economic Services
National Cotton Council
Macroeconomic
Environment
 U.S. Real GDP Growth
Percent
10
8
6
4
2
0
-2
-4
-6
-8
-10
05 06 07 08 09 10
 20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
Jan-04
Mar-04
Jun-04
Sep-04
Dec-04
Feb-05
May-05
Aug-05
Nov-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jun-07
Sep-07
Dollars per Barrel

Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Feb-09
May-09
U.S. Crude Oil Spot Price

Aug-09
Nov-09
Feb-10
May-10
 80
110
140
170
200
230
260
290
320
350
380
410
440
Jan-04
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Nov-05
Feb-06
May-06
Aug-06
Nov-06
Feb-07
May-07
Aug-07
Oct-07
Cents per Gallon

Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jun-09
U.S. #2 Diesel, Gulf Coast

Sep-09
Dec-09
Mar-10
Jun-10
 Civilian Unemployment Rate
Percent
10.5
10.0
9.5
9.0
8.5
8.0
7.5
7.0
6.5
6.0
5.5
5.0
4.5
4.0
3.5
99 00 01 02 03 04 05 06 07 08 09 10
 U.S. Federal Budget Surplus
(CBO Projection)
$ Billions
Aug-09 10-Jan
200

-200

-600

-1,000

-1,400

-1,800
09 10 11 12 13 14 15 16 17 18
 CBO Ag Baseline Spending

$ Billion
30
28 Upland Cotton Other Commodity Programs Conservation
26
24
22
20
18
16
14
12
10
8
6
4
2
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
 Real GDP Growth
in Selected Countries
Percent
16
14
2008 2009 2010 2011
12
10
8
6
4
2
0
-2
-4
US

India

China
World
 0.55
0.65
0.75
0.85
0.95
1.05
1.15
1.25
Jan-97
Jul
Jan-98
Jul
Jan-99
Jul
Jan-00
Jul
Jan-01
Jul
Jan-02
Jul
Jan-03
Jul
Jan-04
Euro

Jul
Jan-05
Jul
Jan-06
Jul
Jan-07
(Currency per U.S. Dollar)

Jul
Jan-08
July
Jan-09
July
Jan-10
 Real Exchange Rate Index
(Other Important Trade Partners, Source – Federal Reserve )

130

125

120

115

110

105

100

95
Jan-07

Jan-10
Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-08

Jan-09
 100
110
120
130
140
150
160
170
180
190
200

80
90
Jan-95
Jul
Jan-96
Jul
Jan-97
Jul
Jan-98
Jul
Jan-99
Jul
Jan-00
Jul
Jan-01
Crops

Jul
Jan-02
Jul
Jan-03
Jul
Jan-04
Jul
Jan-05
Livestock

Jul
Jan-06
Jul
Jan-07
Jul
Jan-08
Jul
Ag Prices Received Index

Jan-09
Jul
Jan-10
 U.S. Net Farm Income
$ Billion
100
Market Government Emergency
90
80
70
60
50
40
30
20
10
0
99 00 01 02 03 04 05 06 07 08 09p 10f
U.S. Cotton Supply
 December Cotton Futures
Cents per Pound
110

Dec 09 Dec-10
100

90

80

70

60

50

40

30
May
Mar
Aug

Nov

Nov
Jan

Sep
Jul
Sep
 December Corn Futures
Cents per Bushel
825
775
725
Dec 09 Dec-10
675
625
575
525
475
425
375
325
275
Aug

May
Sep

Jan

Sep
Jul
Nov

Mar

Nov
 November Soybean Futures
Cents per Bushel
1680
Nov 09 Nov-10
1580
1480
1380
1280
1180
1080
980
880
780
680
580
Aug

May
Sep

Sep
Jul
Jan
Nov

Nov
Mar
 2010 U.S. Cotton Plantings
Thousand Acres

2009 2010 %
Actual Estimated* Change

Southeast 1,891 2,390 26.4

Mid-South 1,627 1,730 6.3
Southwest 5,243 5,875 12.1
West 247 320 29.5
ALL UPLAND 9,008 10,315 14.5
ALL ELS 141 190 34.4
ALL COTTON 9,150 10,505 14.8
*USDA-NASS Prospective Plantings Report
 2010 U.S. Cotton Plantings
Thousand Hectares

2009 2010 %
Actual Estimated* Change

Southeast 765 967 26.4

Mid-South 658 700 6.3
Southwest 2,122 2,378 12.1
West 100 130 29.5
ALL UPLAND 3,645 4,174 14.5
ALL ELS 57 77 34.4
ALL COTTON 3,703 4,251 14.8
*USDA-NASS Prospective Plantings Report
 U.S. Cotton Production

28 6

24
5

Million Metric Tons

20
4
Million Bales

16
3
12
2
8

4 1

0 0
96 97 98 99 00 01 02 03 04 05 06 07 08 09e 10p
 U.S. Cotton Supply
35
Beg Stocks Imports Production 7
30
6
25

Million Metric Tons

5
Million Bales

20
4
15
3

10 2

5 1

0 0
96 97 98 99 00 01 02 03 04 05 06 07 08 09e 10p
U.S. Cotton Demand
 Net Domestic Fiber Consumption
Fiber Equivalents

60
Cotton Other 12
50

Million Metric Tons

10
40
Million Bales

8
30
6

20 4

10 2

0 0
98 99 00 01 02 03 04 05 06 07 08 09 10f
Cotton’s Share of Fiber Consumption
Percent
45

44

43

42

41

40

39

38
97 98 99 00 01 02 03 04 05 06 07 08 09
 Components of Retail Cotton
Consumption
Fiber Equivalents
28 6
Retail Imported
24
5
20

Million Metric Tons

4
Million Bales

16
3
12
2
8

4 1

0 0
98 99 00 01 02 03 04 05 06 07 08 09 10f
 U.S. Cotton Textile Imports
Fiber Equivalents
25
5
20

Million Metric Tons

4
Million Bales

15
3

10 2

5 1

0 0
98 99 00 01 02 03 04 05 06 07 08 09 10f
U.S. Cotton Content in Textile Imports
Fiber Equivalents
24
CBI 5
NAFTA
21 ROW
Non-U.S. Cotton
18 4

Million Metric Tons

Million Bales

15
3
12

9 2

6
1
3

0 0
98 99 00 01 02 03 04 05 06 07 08 09
 U.S. Trade With Mexico
4
Imports Exports 0.8

Million Metric Tons

0.6
Million Bales

2
0.4

1 0.2

0 0
00 01 02 03 04 05 06 07 08 09
 U.S. Trade with CBI
4
Imports Exports 0.8

Million Metric Tons

0.6
Million Bales

2
0.4

1 0.2

0 0
00 01 02 03 04 05 06 07 08 09
 U.S. Imports from China
6
1.2
5
1

Million Metric Tons

4
Million Bales

0.8
3
0.6
2 0.4

1 0.2

0 0
00 01 02 03 04 05 06 07 08 09
 U.S. Cotton Mill Use
(Calendar Year, Million Bales)
12
2.4
10

Million Metric Tons

2.0
Million Bales

8
1.6
6
1.2
4 0.8

2 0.4

0 0.0
98 99 00 01 02 03 04 05 06 07 08 09 10f
 U.S. Cotton Mill Use
(Crop Year, Million Bales)
12
2.4
10
2

Million Metric Tons

8
Million Bales

1.6
6
1.2
4 0.8

2 0.4

0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 U.S. Cotton Production & Use
30
6
Exports Mill Use Production
25
5

Million Metric Tons

20
Million Bales

15
3

10 2

5 1

0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 The World Market
& U.S. Cotton Exports
 China Cotton Supply & Use
70
Net Imports Production Use Stocks 13.8
60
11.8
50

Million Metric Tons

9.8
Million Bales

40
7.8
30
5.8
20 3.8
10 1.8
0 -0.2
-10 -2.2
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 World Cotton Production
125
25
100

Million Metric Tons

20
Million Bales

75
15

50 10

25 5

0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 World Fiber Mill Use

160
Cotton Polyester
140 30

Million Metric Tons

120 25
Million Bales

100
20
80
15
60
10
40
20 5

0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10f

*PCI
 30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
Jan-04
Apr-04
Aug-04
Nov-04
Mar-05
Jun-05
Sep-05
Jan-06
Apr-06
Aug-06
Nov-06
"A" FE Index

Mar-07
Jun-07
Cents per Pound

Oct-07
Asian Polyester Staple

Jan-08
Fiber Prices

May-08
Aug-08
Nov-08
Mar-09
Jun-09
Oct-09
Jan-10
May-10
 World Cotton Mill Use
140 30
120
25

Million Metric Tons

100
Million Bales

20
80
15
60
10
40

20 5

0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 Foreign Cotton Production & Use

130
Stocks Production Use 27
120
110 24

Million Metric Tons

Million Bales

100
21
90
80 18
70 15
60
12
50
40 9
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 U.S. Cotton Exports

20
18 4
16

Million Metric Tons

14 3
Million Bales

12
10
2
8
6
4 1
2
0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 World Cotton Ending Stocks

70
U.S. ROW China 14
60
12

Million Metric Tons

50
Million Bales

10
40
8
30 6
20 4
10 2
0 0
98 99 00 01 02 03 04 05 06 07 08 09e 10p
 Cotton Stocks/Use
(World less China)
Percent
80

70
58 61
60 58
60 56
52
50 44 46 44
43 44
39 41
40

30

20

10

0
98 99 00 01 02 03 04 05 06 07 08 09 10
 U.S. Supply and Demand
Million Bales
2009/10e 2010/11p
Beginning Stocks 6.34 2.90
Production 12.19 16.70
Imports 0.01 0.00
Total Supply 18.53 19.60
Mill Use 3.40 3.30
Exports 12.25 13.50
Total Offtake 15.65 16.80
Ending Stocks 2.90 2.80
Stocks-to-Use Ratio 18.5% 16.7%
 U.S. Supply and Demand
Million Metric Tons
2009/10e 2010/11p
Beginning Stocks 1.38 0.63
Production 2.66 3.64
Imports 0.00 0.00
Total Supply 4.04 4.27
Mill Use 0.74 0.72
Exports 2.67 2.94
Total Offtake 3.41 3.66
Ending Stocks 0.63 0.61
Stocks-to-Use Ratio 18.5% 16.7%
 World Supply and Demand
Million Bales
2009/10e 2010/11p
Beginning Stocks 62.70 52.21
Production 102.89 114.32
Imports 35.70 36.12

Mill Use 116.43 119.49

Exports 35.26 36.14

Ending Stocks 52.21 49.59

Stocks-to-Use Ratio 44.8% 41.5%
 World Supply and Demand
Million Metric Tons
2009/10e 2010/11p
Beginning Stocks 13.66 11.37
Production 22.42 24.91
Imports 7.78 7.87

Mill Use 25.37 26.03

Exports 7.68 7.87

Ending Stocks 11.37 10.80

Stocks-to-Use Ratio 44.8% 41.5%
 Producers Cooperatives
Ginners Cottonseed Merchants

Warehouses Manufacturers