1. The Economic Outlook for U.S. Cotton 2004 Prepared by Economic Services Gary Adams Steve Slinsky Shawn Boyd Michelle Huffman

2. Macroeconomic Environment

3. Change in U.S. Real GDP

4. Civilian Unemployment Rate

5. Manufacturing Employment

7. Consumer Price Index for Apparel

8. U.S. Federal Budget Surplus as Projected by CBO

9. CBO Ag Baseline Spending

10. Euro (Currency per U.S. Dollar)

11. Real Exchange Rate Index (Other Important Trade Partners, Source – Federal Reserve )

12. Ag Prices Received Index

13. U.S. Net Farm Income

14. U.S. Cotton Supply

15. U.S. Upland Planted Area

16. U.S. ELS Planted Area

17. U.S. Cotton Yield

18. U.S. Cotton Supply

19. Southeast34.4 34.127.9 27.5 Mid-South 34.6 34.428.2 27.6 Southwest34.4 33.329.4 28.0 West36.8 36.131.6 29.9 U.S.34.7 34.328.8 28.0 Southeast34.4 34.127.9 27.5 Mid-South 34.6 34.428.2 27.6 Southwest34.4 33.329.4 28.0 West36.8 36.131.6 29.9 U.S.34.7 34.328.8 28.0 2003 Crop Staple and Strength 2003 5-Yr. StapleStrength 5-Yr.

20. Southeast94.2 77.642.3 44.8 Mid-South 95.8 73.146.3 46.5 Southwest89.2 76.444.3 43.1 West96.1 95.242.8 45.0 U.S.93.7 78.644.4 44.8 Southeast94.2 77.642.3 44.8 Mid-South 95.8 73.146.3 46.5 Southwest89.2 76.444.3 43.1 West96.1 95.242.8 45.0 U.S.93.7 78.644.4 44.8 2003 Crop Color and Mike 2003 5-Yr. %SLM+Micronair e 5-Yr.

21. December Cotton Futures Cents per Pound

22. December Corn Futures Cents per Bushel

23. November Soybean Futures Cents per Bushel

24. Southeast3,038 3,102 2.1 Mid-South 3,575 3,945 10.3 Southwest5,870 6,621 12.8 West821 879 7.0 ALL UPLAND 13,304 14,546 9.3 ALL ELS179 212 18.6 ALL COTTON13,483 14,759 9.5 Southeast3,038 3,102 2.1 Mid-South 3,575 3,945 10.3 Southwest5,870 6,621 12.8 West821 879 7.0 ALL UPLAND 13,304 14,546 9.3 ALL ELS179 212 18.6 ALL COTTON13,483 14,759 9.5 2004 U.S. Planting Intentions 20032004% Actual Intended Change Actual Intended Change 20032004% Actual Intended Change Actual Intended Change Thousand Acres

25. U.S. Cotton Supply

26. U.S. Cotton Demand

27. U.S. Retail Fiber Consumption

28. Cotton’s Share of Fiber Consumption

29. U.S. Retail Cotton Consumption

30. U.S. Cotton Textile Imports

31. U.S. Cotton Content in Textile Imports

32. U.S. Cotton Textile Trade with Mexico

33. U.S. Cotton Textile Trade with CBI

34. U.S. Cotton Textile Imports from China

35. U.S. Textile Imports from China (China Textile Safeguard Categories)

36. Cotton Product Imports from Vietnam

37. U.S. Cotton Mill Use (Calendar Year, Million Bales)

38. U.S. Cotton Mill Use (Crop Year, Million Bales)

39. The World Market & U.S. Cotton Exports

40. China Cotton Supply & Use

41. World Cotton Production

42. Change in ‘04 Cotton Production Up 10.1 mil bales relative to 2003

43. World Fiber Demand

44. World Cotton Mill Use

45. Change in ‘04 Cotton Mill Use Up 1.1 mil bales relative to 2003

46. Foreign Cotton Production & Use

47. U.S. Cotton Exports

48. World Cotton Ending Stocks

49. Cotton Stocks/Use (World less China)

50. Beginning Stocks5.384.25 Production18.2218.49 Imports0.050.04 Total Supply23.6622.78 Mill Use6.205.70 Exports13.2012.51 Total Offtake19.4018.21 Ending Stocks4.254.57 Stocks-to-Use Ratio21.9%25.1% U.S. Supply and Demand Million Bales 2003/042004/05

51. Beginning Stocks36.9732.36 Production92.20102.28 Imports32.4031.90 Mill Use97.1198.16 Exports32.0531.60 Ending Stocks32.3636.75 Stocks-to-Use Ratio33.3%37.4% World Supply and Demand Million Bales 2003/042004/05

52. Cotton Gross Receipts (Cents/Lb)

53. Merchants Ginners Crushers Producers Cooperatives Warehouses Manufacturers Bound Copies of the Outlook are Available at the Close of this Session