1. The Economic Outlook for US Cotton 2007 Prepared by Economic Services Gary Adams Steve Slinsky Shawn Boyd Michelle Huffman

2. Macroeconomic Environment

3. US Crude Oil Spot Price

4. World Economic Growth

5. US Federal Budget Surplus CBO Jan. ’07 Forecast

6. CBO Ag Baseline Spending

7. US Net Farm Income

8. US Cotton Demand

9. US Cotton Textile Imports

10. US Cotton Mill Use

11. US Exports & The International Market

12. US Upland Export Commitments

13. (Million Bales) Aug05-Jan06Aug06-Jan07Difference Mexico1.3071.536 +0.229 Turkey0.9831.103+0.121 China5.3451.125-4.220 Total10.6816.300-4.381

14. China Cotton Supply & Use

15. India Cotton Supply & Use

16. Foreign Cotton Production & Use

17. US Cotton Exports

18. US Cotton Supply

19. 2007 US Planting Intentions 2006 Actual 2007 Intentions Percent Change Southeast3,3532,615-22.0% Mid-South4,2353,395-19.8% Southwest6,8356,377-6.7% West525441-16.0% Total Upland14,94812,828-14.2% ELS32636110.9% All Cotton15,27413,190-13.6%

20. US Cotton Yield

21. US Cotton Production

22. US Cotton Production & Use Mill Use Exports

23. US Cotton Ending Stocks

24. World Cotton Supply & Demand Mill Use Production

25. Cotton Stocks-to-Use U.S. Rest of World

26. Cotton Stocks/Use vs A Index

27. Nearby NY and “A” (FE) Index

28. The Economic Outlook for US Cotton 2007 Prepared by Economic Services Gary Adams Steve Slinsky Shawn Boyd Michelle Huffman