Cotton futures jumped to a two month-high on speculation that better-than-expected economic data in China, the U.S. and Germany signals higher demand for raw materials. Orange juice dropped.

Global equities rallied after gross domestic product in China, the world’s second-largest economy, grew 8.9 percent in the fourth quarter, above the median in a Bloomberg News survey. A U.S. Federal Reserve report showed manufacturing in the New York region increased at the fastest pace in nine months, and German investor confidence rose by a record.  To read the rest of the story click here.

As momentum builds for NAT in Oregon, Governor John Kitzhaber mentioned the company in his annual address at the Oregon Leadership Summit on Monday, December 12. From the speech:

“Finally, we must develop strategies to identify and replace imports from external suppliers with market-competitive, Oregon-made products – thus enhancing Oregon’s ‘cluster’ strategy by connecting cluster supply chains to Oregon-based firms and innovations.

For the Governor’s full speech, visit here.

Naturally Advanced Technologies headed to Salem, Oregon this Monday and Tuesday to attend the 71^st Annual Oregon Seed Growers’ Convention.  NAT CEO Ken Barker was one of the guest speakers on Monday, where he introduced CRAiLAR and its promising technology, focusing on the company’s impressive list of partnering companies like Hanes, Georgia-Pacific, Levi’s, and Target.   By Tuesday morning, a steady flow of growers intently listened as Jay Nalbach, CMO and Ryan Leverenz, Head of Global PR, fielded questions and introduced the CRAiLAR process.

As demand grows from partner companies, supply remains a high priority for NAT.  The Willamette Valley’s history of flax farming, which was a critical industry in the area during the 1930′s to 1950′s, makes it a prime candidate region.  NAT will continue to engage growers in the area and work to diligently answer both agronomic and economic questions with a goal to plant significant acreage in the area by Q2 2012.  The company is planning its next grower information event for January, where it will provide a thorough Q&A for interested growers.  More than 50 farms have expressed interest since the company made its first foray into the region in late-September.

Ken Barker hands over a piece of cardboard with fabric swatches attached.

Barker is delivering his feel test, challenging his subject to detect the difference between cotton-only pieces and those with a combination of cotton and “Crailar,” a fiber derived from flax stalks.

Barker, chief executive of Naturally Advanced Technologies Inc., the makers of Crailar, has touted the fiber’s benefits to provide protection against volatile cotton prices. Crailer also has a much smaller ecological footprint than cotton’s, his company’s research shows.

And Oregon — from the company’s Lake Oswego-based managers to Willamette Valley farmers — are expected to play a key role in growing Crailar from seedling concept to harvested game-changer.

Barker has convinced the likes of Target Corp., Levi Strauss & Co., HanesBrands and Carhartt that Crailar could make a difference in production of fabrics and apparel.

Crailar has partnered with those companies and others to produce or test Crailar for a variety of products. Naturally Advanced announced Thursday that Target has entered a development and supply agreement to evaluate Crailar in the retailer’s domestic textiles category such as table linens, window treatments and towels.  To read the full story click here.

Ken Barker, CEO of Naturally Advanced Technologies, commented on the partnership agreement, which begins December 1, 2011, “Target represents a best-in-class partner for CRAiLAR in the domestic textiles category. Also the fiber’s performance in moisture management, shrinkage reduction, and dye chemical savings is in line with Target’s sustainability efforts.”

Target’s commitment to environmental sustainability is a focused effort in its Here for Good campaign.  With an entire website dedicated to the far reaching initiative, Target focuses on improving communities, health, education and the environment.

This afternoon, Naturally Advanced Technologies will be hosting a corporate update at 1:30 pm PDT, 4:30 PM EDT.  A verbal presentation on recent corporate developments will be followed by a question and answer session led by Chief Executive Officer, Ken Barker.    Participants may join the call via telephone by dialing 888-312-3047, or 719-457-1529 for international callers at least 5-10 minutes before the presentation start time.  A webcast will also be featured on the company website’s investor page.

The Governors’ Gold Awards are an annually held event benefiting Special Olympics Oregon, a unique organization serving Special Olympics’ athletes statewide since 1972.  The G.G.A. recognizes individuals, companies, organizations and communities that have contributed to the “greatness” of Oregon.  NAT was honored to sponsor a table and be in the company of Oregon’s visionary corporate community.  Dan Wieden, of Wieden+Kennedy, Ken & Joan Austin, co-founders of A-dec, Inc. and Jean M. Auel, international best-selling author of the Earth’s Children series, were three of the honorees recognized that night.  CEO Ken Barker and his wife Diane Barker, CMO Jay Nalbach and Director of Corporate Communications Ryan Leverenz were joined by James Mast, interim director of Drive Oregon, Shayne Kniss, president of Iris Capital Management and Rick Anguilla, principal of Guidance Counsel.  The real stars however, were the Special Olympic athletes themselves.  Their stories of gained self-confidence and their determination to experience joy, while developing physical fitness, were an inspiration to all in attendance.

Denise Grunewald places socks on forms for pressing at the Wigwam factory in Sheboygan, Wisconsin

A Reuters story from this week, “Shoppers won’t get break from cotton price dip,” refers to NAT’s relationships with Levi’s and Hanes in the context of brands looking to diversify the types of fiber they use to ease costs against the volatile cotton markets. Robert Shearer, CEO of VF Corp, makes the exact point that we feel differentiates CRAiLAR:

“Consumers, when they pick up a pair of Wrangler jeans or Lee jeans, have certain expectations…experimenting with how jeans feel would ‘harm the brand.’”

CRAiLAR Flax, blended at significant rates, is indistinguishable from 100% cotton to the touch. This was a significant factor in why Hanes signed a 10-year purchasing agreement with us in March, and why brands like Levi’s, Cintas, Carhartt and others have been in joint development agreements with us this year evaluating how they might use CRAiLAR Flax in their product portfolio.

Across the board, participants voiced a need for companies to adopt more and more ethical practices, but the question of how to do it was more divisive. Some argued that influential companies could trigger a market-wide chain reaction by their leadership, as they introduce a new standard in ethical fashion. Unfortunately, the market for sustainably produced products is still deeply niche, leadingothers to suggest that it is ultimately a problem of consumer education.

How do you think this problem can be solved? Can the industry kick-start bottom-down change? Or do consumers have to demonstrate that these kinds of practices are a priority with their spending habits? We’d love to hear your thoughts in the comments section.

Along with that forecast, the Report also published its list of the top 10 corporations using organic cotton. Just a quick glance reveals that the list is filled with industry-leading apparel companies who wield strong taste-making influence, from athletic brands like Nike and adidas to big box retailer Target or mall fashion brand Zara.

At the top of the list is Sweden’s H & M, which used more than 15,000 tons of organic cotton in 2010. According to CSR Product Manager Henrik Lampa, by creating demand for organic cotton, H & M is incentivizing cotton farmers to adopt sustainable cultivation practices.

Of course, there are many experts who think that cotton, as a crop, is too difficult to sustainably grow. Given that opinion, we won’t be surprised when next year’s edition of the Report begins to track the rise of organic cotton alternatives, such as flax and hemp.