Major Presentation Points

• World textile fiber market growing (population & economic growth) • Cotton had significant headwinds over past decade • Next 10 years should be better for cotton • Sustainability will continue to become more important—could be advantage for cotton • Alternative crops (corn & soybeans) not likely to take acres from cotton • U.S. cotton acreage (except 2020) is likely to remain near current levels • Large crops will put significant downward pressure on cottonseed prices • Cottonseed research & promotion along with ULGCS critical to enhance seed value for growers U.S. Upland Cotton Acres

16 14.95 14.43 13.85 14 13.45 12.08 12.36 12 10.54 10.77 10.85 10.21 9.88 10 9.30 9.01 8.42

Millions 8

6

4

2

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 World Production & Use of Cotton

130 125 120 115 110 105 100 95

Million Million 480 Lb.Bales 90 85 80

Production Use Source: USDA World Per Capita Cotton Demand

9.0 8.5 0.2% Growth per Year 8.0 7.5 7.0 6.5

Pounds per capita per Pounds 6.0 5.5 5.0

Source: USDA Cotton’s Share of Market – Major Apparel Categories

Percent, Seasonally Adjusted 70%

65%

60%

55%

50%

45%

Source: Cotton Incorporated’s Retail MonitorTM Cotton’s Recent Headwinds

• Financial Crisis • Price Spike & Price Volatility • Cheap Synthetic Fiber Prices • Denim Market Weakness • Fabric Weight Reductions • Athletic Apparel Emergence • Polyester Fashion Trend • Sustainability Concerns KEY FACTORS FOR COTTON TO IMPROVE COMPETITIVENESS

Maintain Positive Brand, Retailer & Consumer Perceptions Improved Sustainability & Continued Fiber, Fabric & Product Sustainability Innovations Communications

Ability to Supply the Market in Volume & Quality PERFORMANCE FEATURES Consumers want their clothing to do more, so they can do less

Percent saying the following features are appealing:

82% Easy 80% Fade 78% Temperature Care Resistance Control

77% Stain 76% Wrinkle 75% Moisture Resistance Resistance Management

Source: CCI & Cotton Incorporated’s 2018 Global Lifestyle Monitor 2018 Cotton Incorporated Technologies

TOUGH COTTON™ Technology Moisture Management + Antimicrobial SWEAT-HIDING Technology Cotton LEADS™ Partners—Still Expanding

568 555 540 495 461 432 437 418

354 362

300 257 239

189

94

2 COTTON USA U.S. Cotton Trust Protocol Creatures in the deepest trenches of the sea are eating plastic

In six of the ocean’s deepest crevasses, scientists found tiny shrimp-like creatures chomping on tiny bits of plastic.

By: Sarah Gibbens. Published February 28, 2019 Synthetic Fibers & Plastics Increasing Concerns MICROPLASTICS ISSUE Microplastics pollution is widespread

Source: Adventurers and Scientists for Conservation Microplastic Study MICROPLASTICS RESEARCH North Carolina State University research on microfiber degradation

Aquatic Biodegradation – Results 0 10 20 30 76% Cotton 40 50 4% Polyester 60

BIODEGRADATION 70 % % 80 90 0 50 100 150 200 250 DAYS Index of Textile Aquatic Microplastics (Assumes 5.5%/yr. degradation rate & 3%/yr. future world production of synthetic fibers)

Index: 2018 = 100 300 292 3x More Textile Microplastics Possible by 2048 250 212 200 150 150 100 100

50

0 2018 2028 2038 2048 TOP ENVIRONMENTAL CONCERNS Issues vary across the globe

U.S. Rest of World • Water Quality (81%) • Air Quality (89%) • Air Quality (77%) • Water Quality (87%) • Depletion of Natural Resources (76%) • Climate Change (86%)

Source: CCI & Cotton Incorporated’s 2017 Global Environment Survey CONSUMER AWARENESS AND CONCERN Microfiber waste is a top concern for those aware of fiber production issues

25% 84%

Concerned with Average aware microfiber waste of issues

Source: CCI & Cotton Incorporated’s 2017 Global Environment Survey SUSTAINABLE FABRICS Cotton is considered most sustainable

Percent saying the following fibers are safe for the environment:

Cotton Wool &Silk Rayon Nylon Polyester 90% 86% 53% 46% 45%

Source: CCI & Cotton Incorporated’s 2018 Global Lifestyle Monitor FIBER LABEL CHECKING INCREASES IN THE U.S. PERCENT ALWAYS/USUALLY CHECK FIBER CONTENT LABELS

Stable Increasing

9596 0001 0506 1011 1516 1817* 9695 0100 0506 1011 1516 1817 00 05 10 15 18 17

56% of Boomers 46% of Gen Xers 38% of Millennials check fiber labels check fiber labels check fiber labels

*Partial year data, through June 2018 Source: Cotton Incorporated’s Lifestyle Monitor™ Survey World Per Capita Cotton Demand

9.0 4.1

8.5 3.9

8.0 3.7 3.5 7.5 3.3 7.0 3.1 6.5 Pounds per capita per Pounds 2.9 6.0 per capita Kilograms 2.7 5.5 2.5 5.0 2.3

Source: USDA for history. Cotton Incorporated World Fiber Demand & Supply Models for Projections World Cotton Demand

160 150 140 130 120 110 100 90 80 70 60 Million 480 Million480 Lb. Bales 50 40 30 20 10 0

Source: USDA and Cotton Incorporated Cotton Area: Responsiveness to World Cotton Price

Highly Responsive Moderately Responsive Least Responsive • U.S.A. • China • Pakistan • Australia • India • Uzbekistan • Brazil • Rest of World • Turkey U.S. Corn Price Received

8 7 6 5 4 3

Dollars perBushel Dollars 2 1 0

Actual Projected Linear (Actual)

Source: USDA & Cotton Incorporated U.S. Soybean Price Received

16 14 12 10 8

6 Dollars perBushel Dollars 4 2 0

Actual Projected Linear (Actual)

Source: USDA & Cotton Incorporated U.S. Upland Cotton Price Received

100 90 80 70 60 50 40

Cents per Pound per Cents 30 20 10 0

Actual Projected Linear (Actual)

Source: USDA & Cotton Incorporated Cotton/Corn Price Ratio (Average Price Received Basis)

40 35 30 25

Ratio 20 15 10 5 0

Actual Projected

Source: USDA & Cotton Incorporated Cotton/Corn Futures Price Ratio at Planting Time vs. Upland Cotton Acres

35 18

16 30

14 25 12 20

10 Million Acres Million 15

8 Price Ratio (Cotton vs. Corn) vs. (Cotton Ratio Price

10 6

Cotton Acres (right) Price Ratio (left)

Source: USDA, CME Group, NCC. U.S. Upland Cotton Acres

18

16

14

12

10 Million Acres Million

8

6

Actual Projected Linear (Actual)

Source: USDA & Cotton Incorporated Total U.S. Cotton Production

25

20

15

10 Million 480 Million480 Lb. Bales

5

0

Source: USDA & Cotton Incorporated U.S. Exports vs. Non-U.S. Mill Demand

130 20 120 18 110 16 14 100 12 90 10 80

8 Million Million Bales

70 Bales Million 6 60 4 50 2 40 0

US Exports Foreign Mill Use Source: USDA Cottonseed Prices

300

250

200

150

100 Dollars Ton perShort Dollars 50

0

U.S. Avg.

Source: USDA Cottonseed Prices vs. Soybean Price

$300 $16

$14 $250 $12 $200 $10

$150 $8 $ per Bushelper $

$ per Short Ton Short per $ $6 $100 $4 $50 $2

$0 $0

Cotseed (Left) Soy (Right) Cottonseed Total Crush 5,000 4,500 4,000 3,500 3,000 2,500 2,000 000 Short Tons Short 000 1,500 1,000 500 0

U.S. Avg.

Source: USDA Cottonseed Price vs. Milk Price

$300 $23 $21 $250 $19 $200 $17 $15 $150

$13

$ per Cwt per $ $ per Ton per $ $100 $11 $9 $50 $7 $0 $5

Cotseed (Left) Milk (Right)

Source: USDA Cottonseed Total U.S. Production Less Crush 6,000

5,000

4,000

3,000 000 Tons 000 2,000

1,000

0

U.S. Avg.

Source: USDA Cottonseed Price vs. Cottonseed Production - Crush

$300 0

$250 1

$200 2

$150 3

$100 4 $ per Short Ton Shortper $

$50 5 Million Short Tons (Inverted Scale) (Inverted ShortTons Million $0 6

Cotseed Price CS Prod.

Source: USDA WHOLESEED MARKETING COTTONSEED OIL MARKETING World Per Capita Total Fiber Demand

35 14 30 1.9% Growth per Year 12 25 10 20 8 15

6

Pounds per capita per Pounds Kilograms per capita Kilograms 10 4

5 2

Source: USDA, Fiber Organon, PCI Fibers