As all of you know, this past year has been a mixed bag for cotton. While 1998 saw cotton's retail market share reach 60% for the first time in nearly three decades, severe weather conditions, coupled with the Asian economic crisis, served to temper much of our enthusiasm over hitting that figure.

And we are fully aware that owning the leadership position in the fibers game doesn't guarantee profitability or future success. With our dominant market share also comes the persistent challenge of synthetic fiber producers.

Nonetheless, we do have a powerful weapon we can use against the competition: the tremendous bond between the cotton producer and the textile mill. And a key component of that partnership is the Engineered Fiber Selection® Cotton Management System (EFS®).

Since its introduction in 1982, EFS® has blossomed from an innovative concept to an industry standard, as the increasing numbers of its users can attest.

By the beginning of this year, the customer base of the EFS® System had grown to 232, up from 185 just two years ago. And as we continue to build upon this system, that customer base will expand even more.

Last year, U.S. textile mills utilizing the EFS® System processed more than 10 million bales. When this conference was first held 11 years ago, fewer than two million bales were processed through EFS®. In fact, more than 75% of the cotton consumed by the U.S. textile industry today is selected for opening room laydowns on the basis of HVI fiber properties.

To recap, the EFS® System family of products is designed to enable mills, merchants, and producers/ginners to benefit from the High Volume Instrument data. This information is available to owners of U.S. grown cotton generated by the USDA's regional classing offices and other sources of HVI data.

Thus, the EFS family of programs - MILLNet, GINNet, QRNet and CI-EDI - has become a critical component within our industry.

To that end, Cotton Incorporated will be hosting its 12th annual EFS® Conference, May 17-19, in Greenville, SC. During that time, several seminars, ranging from the development and application of the EFS® System and new developments in cotton testing will be presented, as well as discussions about the U.S. and global cotton market and the challenges and compliance issues surrounding Y2K.

As I've said in the past, the EFS® System alone will not solve the challenges facing our industry. It will, however, offer you a competitive edge in the marketplace.

However, the EFS System is more than just a collection of software programs. As much as it is about the technological renaissance, it is first and foremost about partnerships. This is where the strength of the network lies, which has been extremely critical to the success of EFS®.

Throughout the past dozen years, our industry has been witness to many dramatic changes. And, as most of you know all too well, not all of them have been positive in nature.

It goes without saying that 1998 was a difficult year in the cotton market, whether we're speaking about yields, weather, prices, or export demand. It seems as though these extremely difficult conditions descended on the cotton industry at a time when several other industry segments - textile manufacturing, apparel, home fabrics and retail - were also suffering.

That's why addressing the needs of our customers is so important to the long-range success of cotton. EFS® technology adds value to U.S. cotton by providing them with relevant information about the fiber and provides a system for more efficient bale production.

Regardless of whether the consumer is demanding cotton, if cotton textile products cannot be produced profitably, mills will look to other fibers. EFS® has been instrumental in allowing us to maintain a partnership beneficial to cotton and-textile mills.