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U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook
April 2008April 2008
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook
April 2008April 2008
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
Macroeconomic Macroeconomic EnvironmentEnvironment
U.S. Real GDP GrowthU.S. Real GDP Growth
Percent
-2
0
2
4
6
8
10
97 98 99 00 01 02 03 04 05 06 07
Dollars per Barrel
30
40
50
60
70
80
90
100
110
120
Jan
-04
Feb
-04
Mar
-04
May
-04
Jun
-04
Jul-
04S
ep-0
4O
ct-0
4D
ec-0
4Ja
n-0
5F
eb-0
5A
pr-
05M
ay-0
5Ju
l-05
Au
g-0
5S
ep-0
5N
ov-
05D
ec-0
5Ja
n-0
6M
ar-0
6A
pr-
06Ju
n-0
6Ju
l-06
Au
g-0
6O
ct-0
6N
ov-
06Ja
n-0
7F
eb-0
7A
pr-
07M
ay-0
7Ju
n-0
7A
ug
-07
Sep
-07
No
v-07
Dec
-07
Feb
-08
Mar
-08
U.S. Crude Oil Spot Price U.S. Crude Oil Spot Price
Cents per Gallon
80
110140
170
200230
260
290
320350
380
Jan
-04
Feb
-04
Mar
-04
May
-04
Jun
-04
Au
g-0
4S
ep-0
4N
ov-
04D
ec-0
4F
eb-0
5M
ar-0
5A
pr-
05Ju
n-0
5Ju
l-05
Sep
-05
Oct
-05
No
v-05
Jan
-06
Feb
-06
Ap
r-06
May
-06
Jul-
06A
ug
-06
Oct
-06
No
v-06
Dec
-06
Feb
-07
Mar
-07
May
-07
Jun
-07
Au
g-0
7S
ep-0
7O
ct-0
7D
ec-0
7Ja
n-0
8M
ar-0
8
U.S. #2 Diesel, Gulf Coast U.S. #2 Diesel, Gulf Coast
Percent
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
97 98 99 00 01 02 03 04 05 06 07 08
Percent
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
97 98 99 00 01 02 03 04 05 06 07 08
Civilian Unemployment RateCivilian Unemployment Rate
$ Billions
-400
-300
-200
-100
0
100
200
08 09 10 11 12 13 14 15 16 17
Aug-07 Mar-08
U.S. Federal Budget SurplusU.S. Federal Budget Surplus(CBO Projection)(CBO Projection)
$ Billion
0
5
10
15
20
25
30
04 06 08 10 12 14 16 18
Upland Cotton Other Commodity Programs Conservation
$ Billion
0
5
10
15
20
25
30
04 06 08 10 12 14 16 18
Upland Cotton Other Commodity Programs Conservation
CBO Ag Baseline SpendingCBO Ag Baseline Spending
Percent
0
2
4
6
8
10
12W
orld US
Indi
a
Chi
na
2006 2007 2008 2009
Percent
0
2
4
6
8
10
12W
orld US
Indi
a
Chi
na
2006 2007 2008 2009
Real GDP GrowthReal GDP Growthin Selected Countriesin Selected Countries
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
Jul
Jan
-05
Jul
Jan
-06
Jul
Jan
-07
Jul
Jan
-08
EuroEuro(Currency per U.S. Dollar)(Currency per U.S. Dollar)
100
105
110
115
120
125
Jan
-01
Mar
May Ju
lS
epN
ov
Jan
-02
Mar
May Ju
lS
epN
ov
Jan
-03
Mar
May Ju
lS
epN
ov
Jan
-04
Mar
May Ju
lS
epN
ov
Jan
-05
Mar
May
July
Sep
No
vJa
n-0
6M
arM
ay Jul
Sep
No
vJa
n-0
7M
arM
ay Jul
Sep
No
vJa
n-0
8M
ar
Real Exchange Rate Index Real Exchange Rate Index (Other Important Trade Partners, Source – Federal Reserve )(Other Important Trade Partners, Source – Federal Reserve )
80
90
100
110
120
130
140
150
160
170
180
Jan
-95
Jul
Jan
-96
Jul
Jan
-97
Jul
Jan
-98
Jul
Jan
-99
Jul
Jan
-00
Jul
Jan
-01
Jul
Jan
-02
Jul
Jan
-03
Jul
Jan
-04
Jul
Jan
-05
Jul
Jan
-06
Jul
Jan
-07
Jul
Jan
-08
Crops Livestock
Ag Prices Received Index Ag Prices Received Index
$ Billion
0
10
20
30
40
50
60
70
80
90
100
99 00 01 02 03 04 05 06 07f 08f
Market Government Emergency
U.S. Net Farm IncomeU.S. Net Farm Income
U.S. Cotton SupplyU.S. Cotton Supply
40
50
60
70
80
90
100
110
Au
g
Sep
No
v
Jan
Mar
May Ju
l
Sep
No
v
Dec 07 Dec 08
40
50
60
70
80
90
100
110
Au
g
Sep
No
v
Jan
Mar
May Ju
l
Sep
No
v
Dec 07 Dec 08
December Cotton FuturesDecember Cotton FuturesCents per Pound
275300325350375400425450475500525550575600625650675700
Au
g
Se
p
No
v
Fe
b
Ap
r
Ju
n
Au
g
Oc
t
De
c
Dec 07 Dec 08
275300325350375400425450475500525550575600625650675700
Au
g
Se
p
No
v
Fe
b
Ap
r
Ju
n
Au
g
Oc
t
De
c
Dec 07 Dec 08
December Corn FuturesDecember Corn FuturesCents per Bushel
580
680
780
880
980
1080
1180
1280
1380
1480
1580
1680
Au
g
Se
p
No
v
Fe
b
Ap
r
Ju
n
Au
g
Oc
t
Nov 07 Nov 07
580
680
780
880
980
1080
1180
1280
1380
1480
1580
1680
Au
g
Se
p
No
v
Fe
b
Ap
r
Ju
n
Au
g
Oc
t
Nov 07 Nov 07
November Soybean FuturesNovember Soybean FuturesCents per Bushel
SoutheastSoutheast 2,255 2,255 2,022 2,022 -10.3-10.3Mid-SouthMid-South 2,750 2,750 1,960 1,960 -28.7 -28.7 SouthwestSouthwest 5,122 5,122 4,935 4,935 -3.7 -3.7 WestWest 411 411 269 269 -34.5 -34.5
ALL UPLANDALL UPLAND 10,53810,538 9,1869,186 -12.8-12.8
ALL ELSALL ELS 292 292 204 204 -30.3 -30.3
ALL COTTONALL COTTON 10,830 10,830 9,390 9,390 -13.3-13.3
SoutheastSoutheast 2,255 2,255 2,022 2,022 -10.3-10.3Mid-SouthMid-South 2,750 2,750 1,960 1,960 -28.7 -28.7 SouthwestSouthwest 5,122 5,122 4,935 4,935 -3.7 -3.7 WestWest 411 411 269 269 -34.5 -34.5
ALL UPLANDALL UPLAND 10,53810,538 9,1869,186 -12.8-12.8
ALL ELSALL ELS 292 292 204 204 -30.3 -30.3
ALL COTTONALL COTTON 10,830 10,830 9,390 9,390 -13.3-13.3
2008 U.S. Planting Intentions2008 U.S. Planting Intentions
20072007 20082008 %% Actual Actual Intended* Intended* ChangeChange
20072007 20082008 %% Actual Actual Intended* Intended* ChangeChange
Thousand AcresThousand AcresThousand AcresThousand Acres
*2008 NASS Prospective Plantings Report *2008 NASS Prospective Plantings Report
Million Bales
0
4
8
12
16
20
24
28
95 96 97 98 99 00 01 02 03 04 05 06 07e 08f*
U.S. Cotton ProductionU.S. Cotton Production
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
Million Bales
0
5
10
15
20
25
30
35
95 96 97 98 99 00 01 02 03 04 05 06 07e 08f*
Beg Stocks Imports Production
U.S. Cotton SupplyU.S. Cotton Supply
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
U.S. Cotton DemandU.S. Cotton Demand
Million Bale Equivalents
0
10
20
30
40
50
60
97 98 99 00 01 02 03 04 05 06 07 08f
Cotton Other
Net Domestic Fiber ConsumptionNet Domestic Fiber Consumption
Percent
38
39
40
41
42
43
44
45
97 98 99 00 01 02 03 04 05 06 07
Percent
38
39
40
41
42
43
44
45
97 98 99 00 01 02 03 04 05 06 07
Cotton’s Share of Fiber ConsumptionCotton’s Share of Fiber Consumption
Million Bale Equivalents
0
4
8
12
16
20
24
28
97 98 99 00 01 02 03 04 05 06 07 08f
Retail Imported
Components of Retail Cotton Components of Retail Cotton ConsumptionConsumption
Million Bale Equivalents
0
5
10
15
20
25
97 98 99 00 01 02 03 04 05 06 07 08f
Million Bale Equivalents
0
5
10
15
20
25
97 98 99 00 01 02 03 04 05 06 07 08f
U.S. Cotton Textile ImportsU.S. Cotton Textile Imports
U.S. Cotton Content in Textile ImportsU.S. Cotton Content in Textile ImportsMillion Bale Equivalents
0
3
6
9
12
15
18
21
24
97 98 99 00 01 02 03 04 05 06 07
Non-U.S. Cotton ROW NAFTA CBI
Million Bale Equivalents
0
3
6
9
12
15
18
21
24
97 98 99 00 01 02 03 04 05 06 07
Non-U.S. Cotton ROW NAFTA CBI
U.S. Trade With MexicoU.S. Trade With MexicoMillion Bales
0
1
2
3
4
97 98 99 00 01 02 03 04 05 06 07
Imports Exports
Million Bales
0
1
2
3
4
97 98 99 00 01 02 03 04 05 06 07
Imports Exports
U.S. Trade with CBIU.S. Trade with CBIMillion Bales
0
1
2
3
4
97 98 99 00 01 02 03 04 05 06 07
Imports Exports
Million Bales
0
1
2
3
4
97 98 99 00 01 02 03 04 05 06 07
Imports Exports
U.S. Imports from ChinaU.S. Imports from ChinaMillion Bales
0
1
2
3
4
5
6
97 98 99 00 01 02 03 04 05 06 07
Million Bales
0
1
2
3
4
5
6
97 98 99 00 01 02 03 04 05 06 07
U.S. Textile and Apparel Imports from ChinaU.S. Textile and Apparel Imports from China(All Fibers)(All Fibers)
Billion SMEs
0
5
10
15
20
25
00 01 02 03 04 05 06 07
Agreement Categories
Non-Agreement Categories
Billion SMEs
0
5
10
15
20
25
00 01 02 03 04 05 06 07
Agreement Categories
Non-Agreement Categories
U.S. Cotton Mill UseU.S. Cotton Mill Use(Calendar Year, Million Bales)(Calendar Year, Million Bales)
Million Bales
0
2
4
6
8
10
12
97 98 99 00 01 02 03 04 05 06 07 08f
*National Cotton Council Forecast*National Cotton Council Forecast
U.S. Cotton Mill UseU.S. Cotton Mill Use(Crop Year, Million Bales)(Crop Year, Million Bales)
Million Bales
0
2
4
6
8
10
12
97 98 99 00 01 02 03 04 05 06 07e 08f**USDA 2008 Ag Outlook Forum Estimates*USDA 2008 Ag Outlook Forum Estimates
Million Bales
0
5
10
15
20
25
30
97 98 99 00 01 02 03 04 05 06 07e 08f*
Exports Mill Use Production
U.S. Cotton Production & Use
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
The World Market The World Market & U.S. Cotton Exports& U.S. Cotton Exports
Million Bales
-10
0
10
20
30
40
50
60
70
97 98 99 00 01 02 03 04 05 06 07e 08f*
Net Imports Production Use Stocks
Million Bales
-10
0
10
20
30
40
50
60
70
97 98 99 00 01 02 03 04 05 06 07e 08f*
Net Imports Production Use Stocks
China Cotton Supply & UseChina Cotton Supply & Use
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
World Cotton ProductionWorld Cotton ProductionMillion Bales
0
25
50
75
100
125
97 98 99 00 01 02 03 04 05 06 07e 08f*
Million Bales
0
25
50
75
100
125
97 98 99 00 01 02 03 04 05 06 07e 08f*
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
Million Bales
0
20
40
60
80
100
120
140
160
96 97 98 99 00 01 02 03 04 05 06 07e
Cotton Polyester
Million Bales
0
20
40
60
80
100
120
140
160
96 97 98 99 00 01 02 03 04 05 06 07e
Cotton Polyester
World Fiber Mill UseWorld Fiber Mill Use
*PCI
Cents per Pound
30
40
50
60
70
80
90
Jan
-04
Ap
r-04
Au
g-0
4
No
v-04
Mar
-05
Jun
-05
Sep
-05
Jan
-06
Ap
r-06
Au
g-0
6
No
v-06
Mar
-07
Jun
-07
Oct
-07
Jan
-08
"A" FE Index
Asian Polyester Staple
Fiber PricesFiber Prices
World Cotton Mill UseWorld Cotton Mill Use
Million Bales
0
20
40
60
80
100
120
140
97 98 99 00 01 02 03 04 05 06 07e 08f*
Million Bales
0
20
40
60
80
100
120
140
97 98 99 00 01 02 03 04 05 06 07e 08f*
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
Million Bales
50
60
70
80
90
100
110
120
130
97 98 99 00 01 02 03 04 05 06 07e 08f*
Production Use
Million Bales
50
60
70
80
90
100
110
120
130
97 98 99 00 01 02 03 04 05 06 07e 08f*
Production Use
Foreign Cotton Production & UseForeign Cotton Production & Use
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
U.S. Cotton ExportsU.S. Cotton ExportsMillion Bales
0
2
46
8
10
12
1416
18
20
97 98 99 00 01 02 03 04 05 06 07e 08f*
Million Bales
0
2
46
8
10
12
1416
18
20
97 98 99 00 01 02 03 04 05 06 07e 08f*
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
World Cotton Ending StocksWorld Cotton Ending Stocks
Million Bales
0
10
20
30
40
50
60
70
97 98 99 00 01 02 03 04 05 06 07e 08f*
U.S. ROW China
Million Bales
0
10
20
30
40
50
60
70
97 98 99 00 01 02 03 04 05 06 07e 08f*
U.S. ROW China
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
39 4144
60
37
44
53
43
58 6056
0
10
20
30
40
50
60
70
80
97 98 99 00 01 02 03 04 05 06 07e
Percent
39 4144
60
37
44
53
43
58 6056
0
10
20
30
40
50
60
70
80
97 98 99 00 01 02 03 04 05 06 07e
Percent
Cotton Stocks/UseCotton Stocks/Use (World less China)(World less China)
U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales
Beginning Stocks 9.48 9.70Production 19.40 15.00Imports 0.02 0.00
Total Supply 28.89 24.70
Mill Use 4.70 4.50Exports 14.50 15.00
Total Offtake* 19.20 19.50
Ending Stocks 9.70 5.20Stocks-to-Use Ratio 50.5% 26.7%
2007/08 2008/09**
**USDA 2008 Ag Outlook Forum Estimates**USDA 2008 Ag Outlook Forum Estimates*Includes Unaccounted*Includes Unaccounted
Beginning Stocks 61.20 59.64Production 119.73 123.00Imports 39.09 43.10
Mill Use 124.94 129.50Exports 38.94 42.70
Ending Stocks 59.64 57.04Stocks-to-Use Ratio 47.7% 44.0%
World Supply and DemandWorld Supply and DemandMillion BalesMillion Bales
2007/08 2008/09*
* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates
MerchantsMerchantsGinnersGinners CottonseedCottonseed
ProducersProducers
CooperativesCooperatives
WarehousesWarehousesManufacturersManufacturers