Exports are Key to Economic Health of 2001 U.S. Cotton Crop Year

SAN DIEGO, CA – National Cotton Council economists said today the big variable for the 2001 U.S. cotton crop year is exports, specifically whether or not the Chinese will import raw cotton and how much.

In their annual outlook for delegates attending the NCC’s annual meeting here this week, the economists projected the 2001 U.S. crop would be 18.5 million bales, U.S. mills would use 9.8 million bales and exports possibly reaching 8.5 million bales.

Most analysts expected Chinese imports in the range of 2.5 to 3.5 million bales. Presuming it has adequate supplies, they said, the U.S. should expect to garner some 50 percent of any Chinese raw cotton imports. If that occurs, U.S. exports should reach the 8.5 million-bale mark.

Based on that production and offtake estimate, the economists said U.S. projected stocks would be 4.3 million bales on July 31, 2002 – the end of the 2001 marketing year.

Regarding the world situation, they said a significant drawing down of world cotton stocks should result in world ending stocks for July 31, 2001 of 37.4 million bales with a stocks to use ratio of 40.1 percent. They estimated world cotton production for 2001 at 90 million bales with the expectation of added foreign acreage. Continued world mill use growth, although slower than the last two years, is estimated at 93 million bales. With use exceeding production by 3 million bales, ending stocks July 31, 2002, would decline to 34.4 million bales and the world stocks to use ratio would decline to 37 percent, they noted.

"A realization of the expectation of Chinese imports would no doubt support world prices, but for the next crop year supplies seem adequate in relation to demand," the economists said.

The economists also noted that the economic pressures on the U.S. textile industry are as severe as any faced in the early 1980s, when annual use fell to just 5.2 million bales.

"Effective trade policy is crucial to the ultimate survival of the U.S. textile industry," they said.

The economists also announced the results of NCC’s 18^th Annual Early Season Planting Intentions Survey - total U.S. cotton plantings of 15.9 million acres in 2001. They also noted that, in addition to normal price uncertainties, rising energy costs are having a significant impact on U.S. agriculture, causing some growers to reconsider their planting decisions in 2001.

The survey’s projected 15.67 acres of upland plantings, if realized, would be the second largest upland planting since 1962, trailing only the 16.72 million acres in 1995.

In addition to the upland cotton intentions - a two percent increase over 2000 actual plantings - the NCC survey revealed extra long staple (ELS) intentions of 225,000 acres represent a 31.5 percent increase from 2000’s 172,000 acres. With average abandonment, total upland and ELS harvested area would be about 14.33 million acres. Applying each state’s average yield to its 2001 projected harvested acres generates a crop of 18.46 million bales - 17.98 million bales of upland cotton and 479,000 bales of ELS cotton. Cottonseed production is projected at 6.97 million tons in 2001.

Survey respondents also showed that cotton acreage will increase by 1.4 percent in the Southeast and by 10.8 percent in the Mid-South, while decreasing 1.8 percent in the Southwest and 4.3 percent in the Far West. Of note is that: 1) North Carolina growers’ intention to boost plantings by 5.7 percent to 983,000 acres, if realized, would be the state’s largest acreage since 1.11 million acres were planted in 1937, 2) the largest percentage increases in the Mid-South are projected for Arkansas, Tennessee and Mississippi and 3) in California, it appears some upland acreage will be switched into ELS.

The economists said 2001 actual U.S. plantings could be significantly different from cotton growers’ initial intentions due to changing weather and market conditions between now and planting time.