1. Jaime Malaga, Ph.D. Center for North American Studies Texas Tech University - Department of Agricultural & Applied Economics Recent Trends in U.S. Cotton and Sorghum Exports and their Impact on the South

2. Outline  Cotton Price and Exports  Cotton in the South  Cotton Trends and Expectations  Sorghum Price and Exports  Sorghum in the South  Sorghum Trends and Expectations  General Remarks

3. Cotton Price A Index (Monthly)

4. World Cotton Production and Mill Use Source: CERI

5. World Cotton Imports 2000-01 2010-11

6. World Cotton Exports 2000-01 2010-11

7. Cotton China Source: CERI

8. Cotton Mexico Source: CERI

9. Factors Affecting Cotton Markets Table 1 Description of the Variables Used in the Analyses - Changes in US cotton production - India cotton export restrictions - Pakistan flooding - China Textile Industry Quick recovery - Exchange rates - Depletion of cotton stocks - Inflation in China

10. US Cotton Production by Region Table 1 Description of the Variables Used in the Analyses Southwest (TX) Mid-South (MS, AR, LA, TN) Other Southeast (GA, NC, AL)

11. US Cotton Forecast? Table 1 Description of the Variables Used in the Analyses

12. US Sorghum (Prices) 2006-2010 Table 1 Description of the Variables Used in the Analyses Sorghum Price Gulf Port LA

13. US Sorghum Production and Exports

14. World Sorghum Exports 2006-2010 Table 1 Description of the Variables Used in the Analyses US Argentina 75% 65%

15. World Sorghum Imports 2006-2010 Table 1 Description of the Variables Used in the Analyses E.U. Mexico 41% Japan

16. US Sorghum by Region Table 1 Description of the Variables Used in the Analyses Southern States Total US

17. Southern Sorghum Production by States (200-2010)

18. US Sorghum Production by State (South) Table 1 Description of the Variables Used in the Analyses

19. Factors Affecting Sorghum Export Markets -US total production and exports declining (long term) Ethanol use increasing -Most of US exports going to Mexico (Chicken industry) -Some unexpected demand (EU) may affect flows and prices -Growing competition from Argentina and Australia -Potential new markets in Sub Saharan Africa and LA (Colombia, Chile, Ecuador)

20. Final Remarks -Cotton -Record high prices will go down and stabilize next year -US exports 75% of its cotton and exports will continue to grow -Southern States account for 90% of US exports -Relative prices of other commodities will be key variables. -Factors to watch: China mill use, Exchange rates, Energy prices, Indian, Australian and Brazilian exports, WTO Doha round? -Sorghum -Erratic prices will tend to stabilize and decline -US exports 40% of its sorghum but exports may decrease -Southern States (mainly TX) account for 40-45% of US production -Factors to watch: Mexican chicken industry, competition from Argentina and Australia, New emerging markets, ethanol industry demand.