National Cottonseed Products Association

NO. 2546
AUGUST 24, 2005

COTTON FORECAST AT 21.3 MILLION BALES

COTTONSEED PRODUCTS IN THE NEWS

WHAT'S NEW @ COTTONSEED.COM

CHANGE OF ADDRESS NEEDED

COTTONSEED & COTTONSEED PRODUCTS SUPPLY & DEMAND

THE PHILIPPINES LIFT BAN ON US BEEF AND BEEF PRODUCTS

COTTON LINTER YIELDS DIP IN 2004-05

MOVING?

COTTON FORECAST AT 21.3 MILLION BALES - USDA’s latest forecast for the 2005-06 crop puts all cotton production at 21.291 million bales, just 8% lower than the 23.3 million bales crop of a year ago but still almost 17% larger than the 2003-04 crop of 18.3 million bales. Cotton production in the Mid-south and Southeast are forecast slightly higher compared to last year, while production in the Southwest and West are expected to fall 15-20%.....Cottonseed production, based on average lint-to-seed ratios, is forecast to reach 7.6 million tons, compared to 8.2 million tons last year and 6.7 million tons in 2003-04…...NCPA data shows 2.923 million tons of cottonseed crushed during the 2004-05 season ending July 31. That is just higher than the 2.9 million ton level forecast by USDA. Also of importance is ending stocks of cottonseed at oil mills, which stood at just under 689,000 tons on July 31. That is 223,000 tons higher than the cottonseed stocks level forecast by USDA. Barring some significant season –ending adjustments to inventory, there appears to be ample inventory of seed to begin the season. The strong crush level is expected to continue into next season, as USDA moved its projection for 2005-06 cottonseed crushings up from 2.7 million tons a month ago to 2.9 million tons this month. Strong oil demand generated by the trans fat issue (see related story page 1) certainly is keeping the mills active…..High energy prices put the damper on everything except cottonseed hull demand. Reports are that oil drilling operations across the Southwest are seeking cottonseed hulls for their mixtures with drilling mud for efficient operations.

COTTONSEED PRODUCTS IN THE NEWS - New York City’s health department recently sent a letter to all its 20,000+ restaurants, urging them to stop serving foods that contain trans fats. Phil Lempert, food editor for the “Today” show, quickly picked up on the notice and pointed out that replacement oils for trans (partially hydrogenated) oils include monounsaturated and polyunsaturated oils such as peanut, olive, sunflower and cottonseed oils. The campaign by the city has been endorsed by both the National Restaurant Association and the American Heart Association…..Slate magazine, an on-line publication of the Washington Post, also recently addressed the trans fat issue. Its conclusion? Fast food restaurants could use cottonseed oil and have an oil that lasts longer in their deep-fat fryer…..The Houston Chronicle and Staunton (VA) Daily News note that it’s not too early to begin thinking about a quality compost for next season’s garden. Cottonseed meal, both agree, make excellent soil amendments.

WHAT'S NEW @ COTTONSEED.COM - Cottonseed crushings begin the first two weeks of the 2005-06 season strong with 63,000 and 66,000 tons crushed, respectively. For the first two weekly reporting periods, cottonseed crushings total 129,585 compared to 104,051 last year and 72,404 two years ago. Find the latest cottonseed data in the Statistics section of the web site…..Cottonseed and cottonseed products supply and demand estimates are updated for August. State-by-state cottonseed production forecasts by NCPA are also available in the Statistics section…..The Cottonseed Calendar contains the latest industry meeting news.

CHANGE OF ADDRESS NEEDED - In finalizing the 2005-06 Trading Rules Book, NCPA asks that all changes of address, phone, fax, e-mail and/or staffing be forwarded to the Association office.

COTTONSEED & COTTONSEED PRODUCTS SUPPLY & DEMAND

THE PHILIPPINES LIFT BAN ON US BEEF AND BEEF PRODUCTS - Agriculture Secretary Mike Johanns recently announced that the Philippines will resume imports of U.S. beef and beef products. “I am very pleased with the reopening of the Philippines market to U.S. beef and beef products, which demonstrates their commitment to trade based on internationally accepted scientific standards for human and animal health,” said Johanns. Under the agreement, the United States will now be able to export boneless beef from cattle not older than 30 months to the Philippines. The estimated value of the Philippines market reopening to U.S. boneless beef is $2.5 million. In 2003, the United States exported $4.9 million worth of beef and beef products to the Philippines. After the December 2003 discovery of the first BSE-infected cow in the United States, the Philippines adopted measures to restrict imports of certain types of U.S. beef, while allowing imports of U.S. boneless beef from cattle not older than 30 months with its memorandum order in January 2004. In June 2005, the Philippines imposed a temporary ban on beef and beef products from the United States following confirmation that a second U.S. cow had tested positive for BSE. (Source: USDA, 8/04/05)

COTTON LINTER YIELDS DIP IN 2004-05 - Based on data collected by NCPA from oil mills in the Eastern half of the US (AR, TN, MS, GA, SC), yields of cotton linters have been consistently below their five-year average this season. Historically hovering above or near 160 lbs of linters per ton of cottonseed crushed, this season’s linter yields are falling closer to 150 lbs per ton crushed. A couple of theories may explain the phenomenon—first—processing capacity in the lint room has not kept pace with the rest of the plant, leading to less than optimal yields in years when the crush moves to a brisk pace, and second—the much-discussed new generation seed sizes are smaller and as a result, have less lint available to processors. NCPA will continue to monitor the situation throughout the coming season.

MOVING? - Please send all change of address information to: National Cottonseed Products Association, 104 Timber Creek Drive, Suite 200, Cordova, TN 38018, or email to info@cottonseed.com.

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August 24, 2005