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2020 Mid-Year Report REPORT OF COTTON INCORPORATED TO THE SECRETARY’S OFFICE Mid-Year 2020 TABLE OF CONTENTS OVERVIEW OF CONTENTS ......................................................................................................................................... 3 EXECUTIVE SUMMARY ............................................................................................................................................... 4 AGRICULTURAL RESEARCH COMMITTEE ............................................................................................................... 9 AGRICULTURAL AND ENVIRONMENTAL RESEARCH .......................................................................................... 9 Strategic Objective 1: Increase the short-term profitability of U.S. cotton production. .......................................... 9 Strategic Objective 2: Increase the long-term profitability of U.S. cotton production. .......................................... 13 Strategic Objective 3: Increase number of future scientists of U.S. cotton and improve the reputation of U.S. cotton production. ............................................................................................................... 13 Addressing the Contamination Threat ................................................................................................................. 14 RESEARCH AND DEVELOPMENT COMMITTEE ..................................................................................................... 17 FIBER COMPETITION: FIBER QUALITY RESEARCH .......................................................................................... 17 Strategic Objective 1: Improve quality measurements of cotton fiber, yarns, and fabrics. .................................. 17 Strategic Objective 2: Provide accurate test data to support research and marketing efforts. ............................ 20 Strategic Objective 3: Develop and maintain software tools to buy, sell, move, and use cotton with improved efficiency and profitability. ................................................................................................... 23 Strategic Objective 4: Service and market CMS products that promote cotton as the most efficient and profitable fiber in the marketplace. ...................................................................................................... 23 PRODUCT DEVELOPMENT AND IMPLEMENTATION ......................................................................................... 25 Strategic Objective 1 Concentrate efforts on broadly defined key market categories where cotton has suffered significant market share erosion. Identify and research sustainable innovations in technology and product development that can recover, grow, and preserve cotton market share. ...... 25 Strategic Objective 2: Optimize and implement products and technologies to advance cotton in global markets. ............................................................................................................................................ 31 Strategic Objective 3: Augment cotton marketing activities/influence industry decisions through technical avenues such as standardization and education. .............................................................................. 36 GLOBAL SUPPLY CHAIN MARKETING COMMITTEE ............................................................................................. 39 GLOBAL SUPPLY CHAIN MARKETING ................................................................................................................. 39 Strategic Objective 1: Maintain a global presence for cotton. ............................................................................. 39 Strategic Objective 2: Develop and facilitate the adoption of product and technology ideas. ............................. 40 Strategic Objective 3: Conduct technical education and training to support cotton use. ..................................... 46 CONSUMER MARKETING COMMITTEE ................................................................................................................... 48 ADVERTISING, PUBLIC RELATIONS, STRATEGIC ALLIANCES, AND CORPORATE STRATEGY & PROGRAM METRICS ................................................................................................................................................................ 48 Strategic Objective: Use advertising, public relations, and strategic alliances to build consumer demand and trade awareness for cotton and cotton products as well as use market intelligence to assess opportunities and threats for cotton, influence corporate strategy efforts, and leverage program metrics to evaluate and improve tactics for fulfilling Cotton Incorporated’s mission. ............................................................................................................................................ 48 APPENDIX A: MEDIA OUTREACH COVERAGE....................................................................................................... 58 CORPORATE ADMINISTRATION/FINANCE ............................................................................................................. 60 EXPLANATION OF TERMS AND ACTIVITIES .......................................................................................................... 61 2 OVERVIEW OF CONTENTS Each year Cotton Incorporated prepares a formal Strategic Plan* that covers the key principles that guide the Company’s long- range activities. The major priority areas over the next five years for programs at Cotton Incorporated are: ▪ Growing cotton demand to 135 million bales by 2028 o Cotton product innovation and implementation o Cotton sustainability o Global presence for cotton ▪ Growing U.S. cotton demand and production to 20 million bales by 2028 o U.S. cotton sustainability o Farm profitability – cost of production o Fiber quality / contamination o Cottonseed value o Cotton Management System: EFS® implementation o CCI contribution In order to fulfill these priorities, specific strategic objectives are outlined for each of Cotton Incorporated’s four Operating Committees and related subdivisions: ▪ Agricultural Research Committee o Agricultural and Environmental Research o Sustainability ▪ Research and Development Committee o Fiber Competition: Fiber Quality Research o Fiber Competition: Cotton Management System (EFS®) o Product Development and Implementation (PDI) ▪ Global Supply Chain Marketing Committee o Global Supply Chain Marketing o Importer Support Program ▪ Consumer Marketing Committee o Advertising, Corporate Communications, and Brand Partnerships o Corporate Strategy and Program Metrics (CSPM) Operating Committees determine tactics and activities to meet the strategic objectives identified for their program area or divisions within their program area and provide deliverables of their activity to the Board. This bi-annual report includes the following sections: 1. Executive Summary: Overview of year-to-date progress report toward achieving Cotton Incorporated’s mission and strategic objectives, organized by program committee and its related divisions. 2. Report of Activities by Program Committee and Strategic Objectives: Detail of year-to-date progress report toward achieving Cotton Incorporated’s mission and strategic objectives, organized by Program Committee and its related divisions. 3. Explanation of Terms and Activities: Summary descriptions of ongoing projects and key terminology used to explain activities within each Program Committee and its divisions are included as a reference guide *Please refer to page 1 of the 2020 Plan & Proposed Budget Book for complete details on Cotton Incorporated’s current strategic plan. 3 EXECUTIVE SUMMARY This Executive Summary section provides an overview of the report from each of Cotton Incorporated’s four operating committees and related subdivisions. Agricultural Research Committee Agricultural & Environmental Research (AERD) Agricultural research at Cotton Incorporated is directed by experienced research leaders and conducted by student workers alongside experienced University and USDA-ARS scientists. This model has adapted to COVID-19 by utilizing more video conferencing instead of site visits and by asking cooperating scientists to prioritize activities that accomplish the overall mission of improving cotton production profitability while meeting the safety guidelines imposed by their institutions and local governments. Cooperators funded by Agricultural Research were able to plant their field trials as this is conducted individually and further have spent more time on data analysis, grant writing, summarization, and coordination across teams. This last activity, coordination across teams on video calls, will pay significant dividends in the future considering that traditionally researchers compete for grants to be leaders in delivering high impact science. With travel restrictions, COVID-19 has allowed more time and encouraged scientists to better communicate and coordinate with each other. Despite the challenges facing Cotton Incorporated staff and their cooperators, the challenges facing cotton producers have been even more intense. Low commodity prices, adverse weather (drought, extreme heat, flooding), and resistant weeds make farming challenging. The realization that a year’s investment of capital and long hours will only result in a financial loss would be impossible for most people to accept – for cotton, corn, and soybean producers this is the situation growers face. Sustainability Division The
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