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August 2014 Cotton Leader

August 21st, 2014

THE COTTON BOARD HOLDS ANNUAL MEETING - RECOMMENDS BUDGET & ELECTS OFFICERS

During its Annual Meeting in Durham, North Carolina The Cotton Board reviewed and voted to recommend Cotton Incorporated’s proposed 2015 budget of $80 million to the Secretary of Agriculture. Cotton Incorporated was also funded at $80 million last year, and in the face of a declining economic environment and the many challenges facing cotton, The Cotton Board will be drawing from reserve funds to maintain this consistent funding level.

J. Berrye Worsham, President and CEO of Cotton Incorporated, highlighted the company’s key initiatives for 2015, saying " We have a renewed focus on improving cotton’s environmental footprint throughout the supply chain, increasing our speed-to-market with new projects and programs, developing call-to-action messaging that makes the ‘case for cotton’ to consumers and industry, and finally maximizing producer profitability through research and innovation."

In its Business Session, The Cotton Board elected new officers to guide the Program, including David Grant to serve as Chairman for the 2014/2015 Program year. Grant, a cotton producer from Garysburg, North Carolina commented on his election, saying, "Thank you from the bottom of my heart. I think the challenges we will face over the next couple of years will be as great as any our Program has ever faced. I expect help and input from all of our Board Members to help guide Cotton Incorporated in reversing our decline in market share."Grant has a long record of outstanding service to the industry and has served on The Cotton Board for eight years.

The full slate of newly elected Cotton Board officers is as follows: David Grant, Producer from Garysburg, North Carolina, Chairman; Aaron Barcellos, Producer from Los Banos, California, Vice-Chair; Janet Ydavoy, Importer from Yardley, Pennsylvania, Secretary;  George LaCour, Producer from Morganza, Louisiana, Treasurer.

An income forecast given by Cotton Board Senior Vice President and CFO, Lisa Droke, noted a better crop forecast that improves the overall income projections for the Program, and even after drawing from reserves Droke expects The Cotton Board to be in a healthy financial position moving forward. The budget and plan, along with The Cotton Board’s recommendation of approval, will be forwarded to the United States Department of Agriculture (USDA) for final approval.

Stop Sticky Cotton At the Source

Sticky cotton is one of the most costly and frustrating issues in the global cotton industry. When sticky cotton reaches the spinning mills, it can contaminate equipment and slow down operations for days, costing the mills—and sometimes growers—a lot of money. Fortunately, sticky cotton can be minimized with good aphid and whitefly management practices. To help minimize the economic effects of sticky cotton in 2014, Cotton Incorporated and the Plant Management Network have produced two new webcasts on aphid and whitefly management, the key sources of sticky cotton. "Preventing Sticky Cotton Caused by Whitefly and Aphid" by Dr. Peter Goodell, Cooperative Extension Advisor at the University of California, communicates the severity of the effects of sticky cotton and helps growers and consultants identify, scout, and manage aphids and whiteflies in order to prevent sticky cotton from occurring. In this talk, Goodell covers: The problems caused by sugars on cotton lint; Identification, scouting, assessing and managing sweet potato whitefly, biotype B; and Identification, scouting, assessing and managing cotton aphid. "Whitefly Management and Prevention of Excess Sugars in Cotton" by Dr. Peter Ellsworth, Professor and IPM Specialist with the University of Arizona, helps growers, pest managers and other practitioners understand how to implement a comprehensive IPM program to effectively manage whiteflies and minimize sticky cotton issues. In this talk, Ellsworth introduces concepts in whitefly sampling to support production decisions, as well as prevent or avoid conditions conducive to pest population development. Ellsworth also references new and recent research on the role of natural enemies in the effective management of whiteflies in cotton. He also discusses how the strategic deployment of selective chemistry can be used to kill whiteflies while avoiding injury to their natural predators. ‘Focus on Cotton’ contains more than 20 webcasts on various aspects of cotton crop management. These talks--freely accessible 24 hours a day, 7 days a week-- cover agronomic practices, crop protection, and ag engineering. This resource also features a new and improved Cotton Extension Search tool, where users can conveniently search for extension resources across all U.S. land-grant universities serving cotton producers. All of these resources are freely available courtesy of Cotton Incorporated at http://www.plantmanagementnetwork.org/foco.

THE COTTON BOARD ANNUAL REPORT IS NOW AVAILABLE

The Cotton Board’s 2013 Annual Report is now available online. To view the report, visit www.cottonboard.org and look under the "About" section. The report offers a letter from Gary Ross, 2013-14 Chairman of The Cotton Board. In his letter Ross says, " The Cotton Board continues to maintain a strong collection rate, positive audit results, strong communication efforts, and effective reviews of Program activities. I am proud of the organization and its staff." The report features 2013 financial information as well as Program highlights and an update on The Cotton Board’s producer and importer relations. A  listing of The Cotton Boards Board’s Members and Alternates is also included in the report. The 2013 annual report is available in an electronic/downloadable in format, however, if you would prefer to receive a copy of the report in paper or DVD format, please call The Cotton Board at 901.683.2500.

Get Your Company's Meeting Date in The Cotton Board Calendar

The Cotton Board has started preliminary production on their 2015 Cotton Board Industry Calendar. This calendar is sent to every cotton producer who grew at least 50 bales of cotton in the previous crop year. To add value for producers, the calendar includes the annual meeting dates of cotton industry organizations. If you would like The Cotton Board to list your meeting date in the 2015 calendar, please send an email to sgorman [at] cottonboard [dot] org and include your organizations name, the meeting date, meeting venue and meeting location

ECONOMIC UPDATE

After decreasing throughout July, prices for the December New York futures contract found support near 62 cents/lb in early August and have been holding to values between 62 and 65 cents/lb recently. The A Index decreased sharply on August 1, when the delivery terms were shifted to months after the 2014/15 harvest. Recent values for the A Index have been near 73 cents/lb and are the lowest since 2009. Due to a general increase in staple length over the past several years, Cotlook indicated that staple length for the reference quality for the A Index will increase from 1-3/32" to 1-1/8" in the 2015/16 crop year.

Both world production and consumption estimates for the 2014/15 crop years increased in the latest USDA report. The global harvest figure was revised 1.2 million bales higher, from 116.4 million to 117.6 million and the global mill-use estimate rose 1.3 million bales, from 111.3 million to 112.6 million. At the country-level, the largest changes for production were made for the U.S. and India, with forecasts for each of these countries rising 1.0 million bales. For the U.S., the increase was primarily a result of a reduction in the expected abandonment rate.

In terms of price outlook, the most likely factor driving reductions in price over the past few months has been the projected increase in available supply – due in large part to changes in Chinese cotton policy.  Following the announcement this spring that the reserve system will no longer be buying cotton, the weight of uncertainty relative to the Chinese reserve system has shifted from how much China will absorb to how much China will release. This implies an even greater increase in available stocks than described by the record world-less-China figure forecast for the current crop year and suggests continued downward pressure on prices.

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