ABSTRACT

Oversupply conditions for the 2001/02 and 2002/03 have resulted in few opportunities for producers to realize more than few cents of equity from the market above the adjusted world price. The 2002 farm bill includes incentives for producers to plant the number of acres that will result in production equal to units protected by the farm program payments, i.e., 85 percent of the base times the yield; with normal abandonment and yields, this would result in a 2003 crop of approximately 17.4 million bales. Domestic mill use is likely to stabilize as the U.S. dollar weakens against foreign currencies and exports will remain strong as low world stocks generate demand for U.S. cotton. Low stock levels could also pressure prices to the upside if U.S. production falls significantly below 17.4 million bales.