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Major Presentation Points
• World textile fiber market growing (population & economic growth)• Cotton had significant headwinds over past decade• Next 10 years should be better for cotton• Sustainability will continue to become more important—could be
advantage for cotton• Alternative crops (corn & soybeans) not likely to take acres from cotton• U.S. cotton acreage (except 2020) is likely to remain near current levels• Large crops will put significant downward pressure on cottonseed prices• Cottonseed research & promotion along with ULGCS critical to enhance
seed value for growers
U.S. Upland Cotton Acres
14.95
10.54
9.30 9.01
10.77
14.43
12.08
10.2110.85
8.42
9.88
12.36
13.8513.45
0
2
4
6
8
10
12
14
16
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Mill
ion
s
World Production & Use of Cotton
80
85
90
95
100
105
110
115
120
125
130
Mill
ion
48
0 L
b. B
ales
Production UseSource: USDA
World Per Capita Cotton Demand
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
Pou
nd
s p
er c
apit
a
Source: USDA
0.2% Growth per Year
Cotton’s Share of Market – Major Apparel Categories
45%
50%
55%
60%
65%
70%
Source: Cotton Incorporated’s Retail MonitorTM
Percent, Seasonally Adjusted
Cotton’s Recent Headwinds
• Financial Crisis• Price Spike & Price Volatility• Cheap Synthetic Fiber Prices• Denim Market Weakness• Fabric Weight Reductions• Athletic Apparel Emergence• Polyester Fashion Trend• Sustainability Concerns
KEY FACTORS FOR COTTON TO IMPROVE COMPETITIVENESS
Maintain Positive Brand, Retailer &
Consumer Perceptions
Improved Sustainability &
Sustainability Communications
Ability to Supply the Market in Volume &
Quality
Continued Fiber, Fabric & Product
Innovations
PERFORMANCE FEATURESConsumers want their clothing to do more, so they can do less
EasyCare
82%
StainResistance
77%
TemperatureControl
78%
MoistureManagement
75%WrinkleResistance
76%
FadeResistance
80%
Percent saying the following features are appealing:
Source: CCI & Cotton Incorporated’s 2018 Global Lifestyle Monitor
2018 Cotton Incorporated Technologies
TOUGH COTTON™ Technology Moisture Management + Antimicrobial SWEAT-HIDING Technology
2
94
189
239257
300
354 362
418432 437
461
495
540555
568
Cotton LEADS™ Partners—Still Expanding
COTTON USA
U.S. Cotton Trust Protocol
Creatures in the deepest trenches of the sea are eating plastic
In six of the ocean’s deepest crevasses, scientists found tiny shrimp-like creatures chomping on tiny bits of plastic.
By: Sarah Gibbens. Published February 28, 2019
Synthetic Fibers & Plastics
Increasing Concerns
MICROPLASTICS ISSUEMicroplastics pollution is widespread
Source: Adventurers and Scientists for Conservation Microplastic Study
MICROPLASTICS RESEARCHNorth Carolina State University research on microfiber degradation
Aquatic Biodegradation – Results0
10
20
30
40
50
60
70
80
90
% B
IOD
EGR
AD
ATIO
N
0
Cotton76%
Polyester4%
DAYS
25020015010050
Index of Textile Aquatic Microplastics(Assumes 5.5%/yr. degradation rate & 3%/yr. future world production of synthetic fibers)
Index: 2018 = 100
100
150
212
292
0
50
100
150
200
250
300
2018 2028 2038 2048
3x More Textile Microplastics Possible by 2048
TOP ENVIRONMENTAL CONCERNSIssues vary across the globe
U.S. Rest of World• Water Quality (81%)
• Air Quality (77%)
• Depletion of Natural Resources (76%)
• Air Quality (89%)
• Water Quality (87%)
• Climate Change (86%)
Source: CCI & Cotton Incorporated’s 2017 Global Environment Survey
CONSUMER AWARENESS AND CONCERNMicrofiber waste is a top concern for those aware of fiber production issues
25%
Average awareof issues
84%
Concerned with microfiber waste
Source: CCI & Cotton Incorporated’s 2017 Global Environment Survey
SUSTAINABLE FABRICSCotton is considered most sustainable
Percent saying the following fibers are safe for the environment:
CottonNylonRayon Polyester
90% 53% 45% 46%
Source: CCI & Cotton Incorporated’s 2018 Global Lifestyle Monitor
Wool &Silk
86%
FIBER LABEL CHECKING INCREASES IN THE U.S.
Source: Cotton Incorporated’s Lifestyle Monitor™ Survey
PERCENT ALWAYS/USUALLY CHECK FIBER CONTENT LABELS
56% of Boomers
check fiber labels
96 01 06 11 16 17
46% of Gen Xers
check fiber labels
96 01 06 11 16 17
38% of Millennials
check fiber labels
1795 00 05 10 15 18* 95 00 05 10 15 18 00 05 10 15 18
*Partial year data, through June 2018
Stable Increasing
World Per Capita Cotton Demand
2.3
2.5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
4.1
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
Kilo
gram
s p
er c
apit
a
Pou
nd
s p
er
cap
ita
Source: USDA for history. Cotton Incorporated World Fiber Demand & Supply Models for Projections
World Cotton Demand
0102030405060708090
100110120130140150160
Mill
ion
48
0 L
b. B
ales
Source: USDA and Cotton Incorporated
Cotton Area: Responsiveness to World Cotton Price
Highly Responsive
• U.S.A.• Australia• Brazil• Turkey
Moderately Responsive
• China• India• Rest of World
Least Responsive
• Pakistan• Uzbekistan
U.S. Corn Price Received
0
1
2
3
4
5
6
7
8
Do
llars
pe
r B
ush
el
Actual Projected Linear (Actual)
Source: USDA & Cotton Incorporated
U.S. Soybean Price Received
0
2
4
6
8
10
12
14
16
Do
llars
pe
r B
ush
el
Actual Projected Linear (Actual)
Source: USDA & Cotton Incorporated
U.S. Upland Cotton Price Received
0
10
20
30
40
50
60
70
80
90
100
Cen
ts p
er
Pou
nd
Actual Projected Linear (Actual)
Source: USDA & Cotton Incorporated
Cotton/Corn Price Ratio(Average Price Received Basis)
0
5
10
15
20
25
30
35
40
Rat
io
Actual Projected
Source: USDA & Cotton Incorporated
Cotton/Corn Futures Price Ratio at Planting Timevs. Upland Cotton Acres
6
8
10
12
14
16
18
10
15
20
25
30
35
Mill
ion
Acr
es
Pri
ce R
atio
(C
ott
on
vs.
Co
rn)
Cotton Acres (right) Price Ratio (left)
Source: USDA, CME Group, NCC.
U.S. Upland Cotton Acres
6
8
10
12
14
16
18
Mill
ion
Acr
es
Actual Projected Linear (Actual)
Source: USDA & Cotton Incorporated
Total U.S. Cotton Production
0
5
10
15
20
25
Mill
ion
48
0 L
b. B
ales
Source: USDA & Cotton Incorporated
U.S. Exportsvs. Non-U.S. Mill Demand
0
2
4
6
8
10
12
14
16
18
20
40
50
60
70
80
90
100
110
120
130
Mill
ion
Bal
es
Mill
ion
Bal
es
US Exports Foreign Mill UseSource: USDA
Cottonseed Prices
0
50
100
150
200
250
300D
olla
rs p
er
Sho
rt T
on
U.S. Avg.
Source: USDA
Cottonseed Prices vs. Soybean Price
$0
$2
$4
$6
$8
$10
$12
$14
$16
$0
$50
$100
$150
$200
$250
$300
$ p
er
Bu
she
l
$ p
er
Sho
rt T
on
Cotseed (Left) Soy (Right)
Cottonseed Total Crush
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0000
00
Sh
ort
To
ns
U.S. Avg.
Source: USDA
Cottonseed Price vs. Milk Price
$5
$7
$9
$11
$13
$15
$17
$19
$21
$23
$0
$50
$100
$150
$200
$250
$300
$ p
er
Cw
t
$ p
er
Ton
Cotseed (Left) Milk (Right)
Source: USDA
Cottonseed Total U.S. Production Less Crush
0
1,000
2,000
3,000
4,000
5,000
6,0000
00
To
ns
U.S. Avg.
Source: USDA
Cottonseed Price vs. Cottonseed Production - Crush
0
1
2
3
4
5
6$0
$50
$100
$150
$200
$250
$300
Mill
ion
Sh
ort
To
ns
(In
vert
ed
Sca
le)
$ p
er
Sho
rt T
on
Cotseed Price CS Prod.
Source: USDA
WHOLESEED MARKETING
COTTONSEED OIL MARKETING
World Per Capita Total Fiber Demand
2
4
6
8
10
12
14
5
10
15
20
25
30
35
Kilo
gram
s p
er
cap
ita
Pou
nd
s p
er
cap
ita
Source: USDA, Fiber Organon, PCI Fibers
1.9% Growth per Year
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