May 1, 2001 -- Sixty-four percent of all U.S. cotton acres will be planted to genetically modified varieties, up from 61 percent last year, according to the U.S. Department of Agriculture's April crop outlook report.
Both herbicide-tolerant and stacked-gene varieties show increases of 2 to 3 percentage points over last year. Bt cotton is expected to account for 13 percent of total area, down from 15 percent last year.

U.S. cotton farmers have quickly embraced biotech cotton because of economic and environmental benefits, according to research by Dr. Nicholas Kalaitzandonakes, associate professor of agribusiness
at the University of Missouri.

"There is a trend emerging that shows biotech crops, especially cotton, significantly reduce the amount of chemical insecticides that must be sprayed to control insect pests," said Dr. Kalaitzandonakes.
"At the same time, half of the acres planted with Roundup Ready cotton are converted into conservation tillage acres, leading to further environmental benefits. These are very tangible benefits to
everyone who cares for a sustainable landscape and clean water resources."

An independent study by the New Jersey-based consulting company, Kline & Company predicts that biotech cotton will reduce the use of insecticides by 30 percent in the next nine years, from 11.9
million pounds in 2000 to 8.3 million pounds in 2009.

Planting intentions for U.S. cotton total 15.6 million acres, similar to last year’s planted acreage. The expected producer incentive price (after accounting
for marketing loan benefits) for growing cotton probably was down somewhat in mid-March from a year earlier. With the expected per-unit return down by
about 2 percent in 2001 (after adjusting for marketing loan gains and LDPs), cotton plantings are still
attractive relative to competing crops such as corn, wheat, and sorghum.

In fact, even though nationwide, intended soybean acreage for 2001 is 76.7 million acres - 3 percent above last year’s acreage - and the USDA anticipates another record soybean crop, farmers in the
Mississippi Delta and southeastern United States intend to decrease soybean plantings for the fourth year after a spike in 1997. Poor soybean yields in these areas over the past few years have made cotton
a more attractive alternative.

In addition, recent changes in the crop insurance program have improved cotton’s financial viability. In some counties of Mississippi, producer’s net premium
for 75 percent cotton insurance coverage dropped by as much as 20 percent for the 2001 crop year as a result of a general rerating of the cotton program. Also, the
Agricultural Risk Protection Act of 2000 (ARPA) made permanent the ad hoc premium subsidy increases of the
past two years. Because the participation rate of cotton producers in the crop insurance program is already high, there is little room for growth. However, it is
likely that growers will purchase higher coverage levels, which are now more affordable as a result of ARPA’s increased subsidies for higher coverage levels.

The National Cotton Council in January predicted, based on a survey of U.S. cotton growers, plantings of 15.9 million acres despite flat upland cotton prices, waning farm program benefits and rising
fertilizer/energy costs.

"There is evidence that fertilizer costs are perhaps double those of the previous year and fuel costs have risen even more," said Dr. Kent Lanclos, assistant director of National Cotton Council Economic
Services. "For a typical U.S. cotton grower, this could increase production costs by perhaps $30 to $40 per acre. "However, the impact of these costs will be even greater for corn production - with its
higher fertilization and drying requirements - so more acres might be induced into cotton than would have been otherwise this coming season."

Total demand for U.S. cotton was reduced in April to 16.2 million bales, about 5 percent below last season. The reduction came in
domestic demand, while exports remain estimated at 6.9 million bales, 2 percent better than a year ago.