SHIFT TO CRUSHINGS TO MAXIMIZE INCOME FROM COTTONSEED

CRUSH MAY MEET OR EXCEED LEVEL OF A YEAR AGO

WHAT’S NEW @ COTTONSEED.COM

ANNUAL CONVENTION NEWS & NOTES

COTTONSEED OIL TOUR BLOG

COTTONSEED PRODUCTS EXPORT REPORT - December 2007

CONSULTANT REPORTS ON MEXICO

AMENDMENTS TO THE TRADING RULES

MOVING?

SHIFT TO CRUSHINGS TO MAXIMIZE INCOME FROM COTTONSEED - Cottonseed crushings vs whole seed feeding may be experiencing a classic economic case of “a shift in the demand curve”. As the chart below illustrates (not to scale & for illustrative purposes only), while maximum cottonseed incomes may be constant (taking into account all seed), the amount of cottonseed crushed needed to achieve that max appears to be on the increase. Previously, max cottonseed incomes were achieved at a point – somewhere near 60% whole seed & 35% crush, for example. Today, it appears that point has shifted to perhaps 50% whole seed usage & 40% crushed. USDA projecting crush higher for the 2007/08 season in January ‘08 vs December ‘07 may also have been a signal of the “shift”.

CRUSH MAY MEET OR EXCEED LEVEL OF A YEAR AGO - Year-to-date cottonseed crushings, based on NCPA’s weekly data, continue to track above last year’s pace. As the chart below illustrates,  year-to-date cottonseed crushings are close to 104% of a year ago. Should that pace continue through the remainder of the year—which ends July 31—this season’s crush could meet or exceed the 2.68 million tons crushed in 2006-07. Currently, USDA has forecast 2.65 million tons crushed in 2007-08.

WHAT’S NEW @ COTTONSEED.COM - NCPA’s latest survey of member mills showed cottonseed crushings for the month of January 270,543 tons, compared to 256,366 in December and 253,615 in January 2007. See the Statistics section for complete details, as well as up-to-date data for weekly crushings…..NCPA’s Mexico Consultant, Ricardo Silva, provides an update on Mexican cotton production in his January report. Follow the link in the Members Only section for his most recent report…..Convention news and updates will be posted to the Convention section of the web site. Be sure to check for news, registrations, and other updates.

ANNUAL CONVENTION NEWS & NOTES - Start making plans for NCPA’s 112th Annual Convention—May 2-6, 2008 at the Hilton Sandestin Beach Golf Resort & Spa. Call the toll free number for reservations at 1-800-367-1271. Be sure to mention NCPA’s group code of “NCP”….. John Baize, Baize & Associates, will again review supply and demand factors impacting the US vegetable oil industry during the Monday business session. In addition, NCPA is pleased to welcome Dr. Dermot Hayes, professor of economics & finance at Iowa State University. Dr. Hayes has done extensive research on the economic impact of DDG’s and will discuss their impact on U.S. grain, oilseed and livestock markets….Registration materials are NOW available under the Convention link on the Association web site. Be sure to take advantage of the money-saving early registration period! New this year—Deep Sea Fishing adventure!!

COTTONSEED OIL TOUR BLOG - Heartland Daily Newspaper Recommends Cottonseed Oil— A recent issue of Ohio’s Wilmington News-Journal offered readers “Nutrition tips for the New Year,” including  choosing healthier oils like cottonseed oil.  Recognized as “One of the Best Small Towns in America,” the City of  Wilmington prides itself on caring for all its people, including their health. Read more about this and other cottonseed oil news at cottonseedoiltour.com.

COTTONSEED PRODUCTS EXPORT REPORT - December 2007

CONSULTANT REPORTS ON MEXICO - NCPA’s consultant in Mexico, Ricardo Silva, reports that according to the Confederation of Associations of Mexican Cotton Growers, Mexico will likely see an increase in cotton production, from 634,173 bales for 2007-08 to nearly 700,000 bales of cotton for 2008-09. The 9.5% increase will primarily occur in the northern Mexican state of Sonora (see Table 1 in his report in the Members Only section), where plantings are expected to increase from 3,600 hectares in 07-08 to 15,000 hectares in 08-09, according to the Confederation. Cottonseed production in Mexico is forecast to be just over 265,000 metric tons…...The major cotton producing areas of Mexico are in the northern states of Baja California (Mexicali), Sonora, Chihuahua, Coahuila (the La Laguna area is between the states of Coahuila and Durango) and Tamaulipas, which has the lowest production. Chihuahua is the largest cotton producing state and also supplies whole seed for the estimated 50,000 dairy cows located in Delicias and Juarez, Chihuahua. Also located in close proximity is the main dairy area of Mexico in La Laguna. The major dairy cooperative in La Laguna is NUPLEN (LALA) that normally imports around 100,000 metric tons of U.S cottonseed…..Rain in the northern states of Mexico that have cow-calf operations is expected to provide adequate forage and therefore not increase demand for US cottonseed meal, although there have been various inquiries for U.S. meal from the states of Chihuahua and Sinaloa…...Ing. Carlos Del Pozo, Director of Alimentos Larro of Panama has reported considerable interest in distributing and using pelleted cottonseed for dairy use. They also would like to receive price quotes on U.S. cottonseed meal for delivery to ports in Panama. NCPA is working to initiate a small feeding trial using cottonseed meal for feed to saltwater shrimp in their Aquaculture Research Facilities in Panama.

AMENDMENTS TO THE TRADING RULES - The Rules Committee of the National Cottonseed Products Association is scheduled to meet at the Sandestin Beach Hilton, Destin, Florida, on Sunday morning, May 4, 2008, to consider proposed amendments to the Trading Rules. Proposals approved by the Committee will be referred to the membership to be voted on at the business session on Monday morning, May 5. The By-Laws provide that proposed amendments, except those applicable to the methods of chemical analysis contained in Chapter VII, must be submitted to the Secretary at least 30 days prior to the convention. Each proposal so submitted must include the full text of the entire rule or section, as it is proposed to read after amendment. Copies of all proposals received by the Secretary will be referred to the Rules Committee for study and to all members for their information and comment. If you wish to propose an amendment, please draft it in the form described in the above paragraph and mail it so it will reach this office no later than Friday, April 4. It is recommended that you accompany any proposal with a letter giving the reasons for the change. All members are welcome at the Rules Committee meeting and may join in the discussion. If you propose an amendment, it is especially desirable that you be present.

MOVING? - Please send all change of address information to: National Cottonseed Products Association, 866 Willow Tree Circle, Cordova, TN  38018, or email to info@cottonseed.com.

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© National Cottonseed Products Association, Inc.

March 4, 2008