The Australian Bureau of Agricultural and Resource Economics is one of the few organisations that publish cotton pri ce forecasts t o assist growers in making their planting decisions. The US Department of Agriculture, for example, is forbidden by legislation from publishing cotton price forecasts for fear of influencing actual market outcomes. Consequently, the Bureau has a responsibility to ensure t h at its forecasts are as sound and as accurate as possible, given the data available to it at the time. Thus , the objective of recent research has been to improve the subjective forecasting process that was previously used by the Bureau through the development of an economic model of the world cotton market. Using this model, structural characteristics of the market have been studied and the effects of US farm policy have been analysed .