U.S. COTTON ACREAGE LIKELY TO INCREASE DESPITE POOR PRICES.

In its January supply-demand projections for cotton, the U.S. Department of Agriculture lowered its estimates of last year's cotton production by 180,000 bales, which put the crop at 17.22 million bales. Unfortunately, USDA also dropped projections of both mill use and exports by a combined 400,000 bales from December forecasts. Neither has been running high enough to reach previous targets. Now mill use for the 2000-01 marketing year is forecast at 9.8 million bales, down from 10.2 million last season. Exports are expected to reach 7.3 million bales, up from 6.8 million in 1999-00.

Some industry analysts contend these usage projections are still too optimistic. But even if the USDA targets are reached, cotton carryover will increase from 3.9 million bales to 4.1 million bales. Furthermore, there is a real prospect that carryover stocks will balloon to more than 5 million bales by the end of the 2001-02 marketing year.

Despite current unprofitable price levels and poor yield experiences the last couple of years, U.S. producers appear to be set to plant as much or more cotton in 2001 as in 2000. Final decisions have not been made and will be influenced by events yet to unfold.

Today, indications are that growers will likely increase acreage this year by about 1 percent, putting total planted acres at 15.7 million. Assuming weather is normal for a change, this acreage probably would produce a crop of about 19.1 million bales. How much cotton can the industry use in 2001-02? Probably not more than 18 million bales, and that would leave a carryout of nearly 5.3 million bales. This would represent the highest stocks-to-use ratio since 1992-93.

Under current and prospective supply-demand circumstances, there is little reason to get very bullish about cotton. Seasonal price strength is likely to be very limited this spring. Farm level prices for the season will likely average below 60 cents. Somewhat lower U.S. prices are likely in 2001-02. U.S. prices will be supported above 1999-00 levels by an improved world situation.

Source: Doane economists

DID YOU KNOW?

* In an average year, the U.S. cotton crop covers an area roughly equivalent to the combined land areas of Vermont, New Hampshire and Rhode Island.

* In a typical year, U.S. cotton farmers invest more than $652 million in fertilizers, $762 million in agricultural chemicals and $238 million in planting seed. They also pay more than $528 million for fuel and equipment and $610 million for farm labor.

* Business revenue stimulated by cotton in the U.S. economy is estimated at some $120 billion -- the greatest of any U.S. crop.

* Sixty-four percent of the cotton used by mills goes into apparel, 28 percent into home furnishings and 8 percent into industrial products. If all cotton produced annually in the United States were used in making a single product, such as blue jeans, it would make 5 billion pairs.

* The United States commonly supplies 7 million bales or more of the world's cotton exports, accounting for about 30 percent of the total world export market. The largest customers for U.S. raw cotton are in Asia and Mexico.

Source: National Cotton Council

[GRAPH OMITTED]

PROFILE OF THE U.S. COTTON INDUSTRY, 1997

STATE            No. of Businesses(*)   No. of Jobs     Revenue
                                                      (Million $)

Alabama                  1,661             18,750         2,711
Arizona                    968             10,525           430
Arkansas                   429             22,013           968
California               2,638             36,734         3,422
Georgia                  2,367             53,814         5,755
Louisiana                2,709             11,858           582
Mississippi              3,563             29,734         2,272
Missouri                 1,107              7,617           262
New Mexico                 492              1,258            44
North Carolina           2,516             74,619         7,517
Oklahoma                 1,785              2,553            99
South Carolina           1,063             33,028         3,670
Tennessee                2,297             14,880         2,278
Texas                   11,808             67,998         4,333
Other states             1,091             57,972         4,701
Total U.S.              38,494            443,353        40,143

(*) Includes farms, gins, merchants, warehouses, cottonseed oil mills and textile mills.

Source: National Cotton Council

RELATED ARTICLE: COTTON INDUSTRY LOSES LEADER

Roger Malkin, a pioneer and leader in U.S. agribusiness and long-time chairman and chief executive officer of Delta and Pine Land Company, Scott, Miss., died last November at the age of 69.

Jon E.M. Jacoby assumes the role of chairman, and F. Murray Robinson takes over as chief executive officer. Both have been with D&PL's leadership for a long time. Steve M. Hawkins continues as president and chief operating officer of the company.

A native of Brooklyn, N.Y., Malkin became a trusted member of the Mississippi Delta community and the cotton industry at large thanks to his tireless devotion to improving the conditions individuals and farmers faced.

"Roger left us an incredible legacy, and we will continue to build upon the vision he had for us as individuals and for his company," Hawkins says. "In his work, he combined a vision for the future with the daily connection to farmers."

Malkin's most notable contributions to agriculture came during his more than 20 years at D&PL. He shifted the business from a production farming operation to a major research force. During his tenure, the company introduced early-maturing cotton varieties, as well as transgenic varieties.

Last year, Malkin's contributions to the Mississippi Delta and the cotton industry received notice with the honor of a Lifetime Achievement Award from the Delta Council.