NCC Sees Full ’10 Agenda
Retiring NCC Chairman Jay Hardwick told delegates at the NCC’s 72nd Annual Meeting in Memphis that ’10 promises a full NCC agenda, including efforts on: 1) final implementation of the current farm bill; 2) initial preparation for the ’12 farm bill, through participation in House Agriculture Committee hearings; 3) timely passage of emergency disaster assistance; 4) the Administration’s new budget proposal containing a number of severe reductions in the farm safety net; and 5) critical trade issues involving the WTO Brazil case, continued Doha negotiations and potentially damaging trade preference initiatives in this hemisphere.
“I am fully confident that the Council will successfully address these and other challenges, while taking advantage of the opportunities before us to become an even stronger industry and more effective organization,” Hardwick said. “I am very encouraged by the outstanding efforts to increase Council membership and involve more leaders in Texas and in other areas of the Cotton Belt.”
He said the “Vision 21” project and the process following its completion will bring together the industry’s stakeholders for the development of new NCC policies and program initiatives. These also will help guide Cotton Council International’s future efforts in building new markets as well as directing Cotton Foundation resources to achieve industry profitability and efficiency.
Hardwick noted there is a renewed optimism accompanying the prospects of increased cotton production and the resulting positive impacts on the industry’s infrastructure and overall rural economy in the Cotton Belt.
In his report, Hardwick also recapped the NCC’s major ’09 activities, which included a primary focus on farm bill implementation and trade, work on emergency disaster assistance and a number of pressing technical issues, as well as initiatives regarding the industry’s long-term priorities. Details of those efforts can be found in the NCC’s ’10 Report to Members at http://www.cotton.org/about/report/2010/index.cfm. In addition, a complete listing of ’10 US cotton’s leaders along with industry award recipients is at http://www.cotton.org/news/meetings/2010annual/index.cfm.
In the joint session of delegates, NCC Vice President of Economics & Policy Analysis Dr. Gary Adams told attendees that the lingering effects and uncertainties for the general economy continue to present challenges for the industry but data suggest the worst has been weathered and recent concerns are being replaced with prospects for recovery and growth.
In his ‘10 Economic Outlook, Adams said a major reason for optimism is that after seven months of the ’09 marketing year, it is increasingly clear that global cotton stocks will see their first substantial decline since the ’02 marketing year, and the estimated stock reduction of 9.4 million bales would be the largest single-year drawdown since ’86. Projected ’09 global mill use of 114.6 million bales -- 3.1 percent higher than ’08 -- and ending stocks of 51.5 million bales would result in a global stocks-to-use ratio of 45%.
“An unknown at this point is the extent to which the rebound in mill use is due to stronger consumer demand or the replenishing of pipeline inventories,” Adams said. “For the 2010 marketing year, world mill use is projected to grow by 2.3 percent, reaching 117.3 million bales. This growth, though, is predicated on the continued improvement in the general economy.”
Adams said that ending U.S. cotton stocks are projected to fall to 3.7 million bales by the 2009 marketing year’s end – the lowest stocks since the 2003 marketing year and a dramatic change from the 10 million bales of stocks just two years earlier. For the 2010 marketing year, U.S. cotton stocks are projected to remain at 3.7 million bales as the combination of 3.4 million bales of mill use and 12.1 million bales of exports are in line with the projected crop of 15.5 million bales.
Worldwide 2010 stocks are expected to decline by 900,000 bales, bringing the stocks-to-use ratio down to 43.2 percent.
Adams also noted that U.S. cotton’s competitiveness with grains and oilseeds has improved to its most favorable position since prior to the 2006 season. This is reflected in the NCC’s annual planting intentions survey results, a projected 10.1 million acres in ’10 -- up 10.3% from ’09.
The complete outlook is available in the Economics section of the NCC website http://www.cotton.org/econ/index.cfm.
NCC President/CEO Mark Lange provided an update on “Vision 21,” a Cotton Foundation project with initial support provided by Monsanto and a recent commitment from John Deere. He said additional support is being sought from other major Foundation members in order to fully fund the project, which is being administered by the NCC, Cotton Incorporated and Cotton Council International.
The project has three work areas: 1) analyzing the demographic and structural facets, with underlying sources of change, in the Asian consumer apparel and textile product markets; 2) studying the “sustainability” and environmental aspects of U.S. cotton production, storage, transport, and textile processing, apparel manufacturing and consumer handling; and 3) addressing cotton logistics and flow from gin to market with a focus on meeting export demand, minimizing bale handling and reducing costs.
Lange said after the three work areas are completed, the NCC will communicate findings/analysis to the US cotton industry and affiliated interests.
“This would permit the industry access to the work of experts and an opportunity, if possible, for building consensus as to some conclusions and resulting legislation, programs or regulatory changes necessary to address a commonly held future vision,” Lange said
Cotton Incorporated President/CEO J. Berrye Worsham told NCC delegates that despite a gauntlet of global economic challenges, Cotton Incorporated achieved significant strides in ’09 and carries strong momentum to increase demand and profitability for cotton moving into ’10. This is being done through targeted objectives that include: 1) an effort to reach the consumer and trade press with effective messages about cotton; 2) improving profitability of US cotton through research and promotion demand-building activities; 3) being a catalyst for new cotton products and processes; 4) improving opportunities for cotton through training and education programs; and 5) maintaining a global presence for cotton. He also noted that sustainability and an emphasis on the environment would continue in every aspect of Cotton Incorporated’s ’10 efforts.
