USDA PERSPECTIVE ON THE OUTLOOK FOR COTTON

Abstract

The theme of this 77th Agricultural Outlook Forum, “Farm and Policy Prospects,” seems appropriate as agriculture embarks on the 21st century under a new Administration. The policy debate on the shape of future cotton farm policy began with last week’s hearings in the House of Representatives, and the discussion is influenced by a number of contradictions in the current cotton situation. World cotton consumption is estimated at record levels for both the past and present season but, after rebounding from 1999/2000’s 25-year low, cotton prices have fallen in recent months. In the United States, consumers have continued to increase purchases of cotton products, yet domestic mill use of cotton is expected to reach a 9-year low in 2000/01. And, despite higher average market prices, farm income is likely to decline this season, due to a reduction in government payments which more than offsets the higher market returns. However, lower income levels have not dampened farmers’ enthusiasm for cotton, and planted area is forecast to rise this spring.