Cotton's Week June 8, 2001

Cotton's Week June 8, 2001

Cotton's Week: June 8, 2001

Mark-Up Scheduled on Emergency Assistance

House Agriculture Committee scheduled session for June 14 to mark-up legislation authorizing $5.5 billion in emergency financial assistance. As previously reported, FY02 budget resolution provides additional $79 billion for agriculture programs for FY01-11. Resolution specified that $5.5 billion would be available for FY01; $7.35 billion for FY02 and $66.15 billion for FY03-11, provided certain criteria are met. Additional $5.5 billion authorized for FY01 would be sufficient to provide market loss assistance payment at ’99 AMTA payment rate. Because budget resolution specified funds would be available for FY01, it is necessary for distribution to be made prior to end of fiscal year on Sept. 30, ’01.

Cotton/Textiles Take Message to Congress

Members of Congressional Textile Caucus, chaired by Rep. Coble (R-NC) heard presentations by Chuck Hayes, ATMI president, and Bob McLendon, chairman of NCC’s Executive Committee. Hayes told members, staff and industry representatives in attendance that textile industry and related sectors, accounting for $100 billion in sales and 600,000 jobs, are in crisis and are asking Congress and Administration to enforce US trade agreements, laws and regulations, and to take action so that fair trade is achieved. He explained that 100 mills have closed in last 18 months and that US textile industry lost $369 million last year – first annual loss since data has been collected.

Hayes also acknowledged financial stress in cotton industry, and McLendon outlined importance of healthy US textile industry to US cotton farmers, merchants, co-ops and processors. NCC officer noted that annual rate of consumption by US mills has declined by 3 million bales during 3 years and that cotton prices are about half ’95 level. He noted that US accounts for 22.5% of world’s cotton textile and apparel market – up from 14% 10 years ago. But in ’00, imports have grown to account for 10.6 million bales of 21 million-bale equivalents sold at retail.

McLendon told caucus that NCC joins with textile, fiber and related industries in asking Congress and Administration to enforce existing laws and international agreements in order to achieve fair trade. He explained that NCC would continue to ask Congress to provide financial assistance through emergency legislation and in new farm policy. He also stated that NCC would continue to support timely implementation of recently concluded trade legislation, enforcement of existing agreements and new trade agreements that can contribute to restoration of vitality to US cotton and textile industries.

Caucus members in attendance included: Coble (R-NC), Jones (R-NC), Ballenger (R-NC), Spratt (D-SC), Brown (R-SC), McIntyre (R-NC) and Hayes (R-NC). Key staff from numerous Cotton Belt members, including Combest (R-TX), Stenholm (D-TX), Chambliss (R-GA) and Bishop (D-GA), also attended.

Panel to Hear Conservation Comments

House Subcommittee on Conservation, Credit, Rural Development and Research will hold hearing in Weatherford, OK, on June 9. Chairman Lucas (R-OK) announced 11 witnesses would provide testimony on conservation programs to assist panel in determining direction of new farm law’s conservation title. Field hearing follows 2 hearings conducted in Washington that provided commodity, farm and conservation organizations opportunity to comment on current conservation programs and make recommendations for future. NCC joined corn, soybean and wheat groups in presenting joint testimony on May 23.

Harkin Gives Farm Policy Insights

New Senate Agriculture Committee Chairman Harkin (D-IA) provided insights on farm policy issues in several interviews. His staff also indicated that Committee might hold hearings to discuss distribution method for $5.5 billion in emergency economic assistance for FY01 authorized in budget resolution. According to press reports, Chairman Harkin has said prior payments were "not based on anything other than what (farmers) had twenty years ago and most of it goes to the bigger farmer who may not need all that much help." He also said new distribution method needs to be developed, even if it is slower.

Sen. Harkin previously has criticized ’96 farm law and way emergency assistance payments were distributed. Key staff explained he wants system reviewed, but is not saying it will be changed. Chairman Harkin also indicated next farm bill should be packaged to include commodities, trade, research, conservation, credit, rural development, nutrition, etc. and that it likely will be ’02 before bulk of work is completed by Senate. He also said conservation would be centerpiece of new farm legislation.

Meanwhile, Sen. Lugar (R-IN), whom Sen. Harkin replaced as Ag Committee chairman, announced his desire to use traditional production history-based distribution method to distribute $5.5 billion in supplemental aid. "Time is short," Lugar said. "The Budget Resolution requires funding be disbursed before Oct. 1 of this year. The AMTA mechanism is a proven, efficient and timely way of getting money into the pockets of producers so that many obligations can be met. It also targets the farmers who are currently experiencing the greatest problems from low prices."

Hearings to Focus on Farm Program Components

House General Farm Commodities subcommittee field hearings are scheduled for Fresno, CA, and Macon, GA. Chairman Chambliss (R-GA) announced field hearings series "to provide producers an opportunity to discuss in-depth how individual farm programs affect them."

He explained that hearings would focus on structure of loan rates, whether to continue fixed-payments, trigger mechanisms for counter-cyclical income support and other components of farm policy. Hearings are scheduled for following dates and locations: Mon., June 18 at 3 pm – Fresno, CA, Assembly Room of State Building; and Sat., June 23 at 9 am – Macon, GA, Wesleyan College Porter Auditorium. Committee Chairman Combest (R-TX) said hearings are important to Committee’s work toward new farm bill, which he anticipates writing by early August so it could be available to House for consideration as early as September.

Pink Bollworm Eradication Support Sought

During meeting in Phoenix to discuss progress on pink bollworm eradication meeting, new Pink Bollworm Action Committee (PBAC) Chairman Bill Lovelady, Tornillo, TX; joined committee member Jim Ed Miller, Ft Hancock, TX, and NCC staffer Frank Carter in calling for support for pink bollworm eradication program now underway in Trans Pecos/El Paso zone of Texas. Lovelady emphasized that NCC is requesting $6 million for pink bollworm for USDA-APHIS because of critical role for federal involvement in this eradication effort. Expertise in moth rearing, sterilization and delivery is available only with APHIS agency. Delegation, which also included PBAC Advisor Wally Shropshire, and Arizona producers Roger Hooper and Paul Ollerton, voiced strong support to Dr. Gordon Gordh, director, Center for Plant Health Sciences and Technology, USDA-APHIS PPQ, Raleigh, NC.

Group toured Pink Bollworm Rearing Facility, cooperative venture between USDA-APHIS and California Cotton Pest Control Board to carry out San Joaquin Valley Pink Bollworm Program, and saw efforts to get facility in position to provide millions of moths daily for release in Texas program.

Community Refuges Underway

One of insect resistance management options under EPA extension of Bollgard registration is new concept of community refuge. This option allows farmers in same locality to develop refuge(s) that meet(s) requirements for their combined cotton fields. Agreement among cooperating farmers must be signed and coordinator must be designated. Agreements, along with map and plans, were due to Monsanto by May 15.

Monsanto reported in May 31 letter to EPA that 92 community refuge agreement forms had been submitted from 11 states. Majority of community refuges will be in Arkansas (29) and Mississippi (22). Designated coordinators are mostly farmers (61%) and consultants (32%).

LDP Eligibility Bill Introduced

Sens. Grassley (R-IA) and Nelson (D-NE) introduced legislation (S. 923) to extend temporary eligibility of commodities produced on farms without Production Flexibility Contracts (PFC) for Loan Deficiency Payments (LDP). Last year’s Agricultural Risk Protection Act of 2000 included provision amending ’96 farm law to make ’00 crops harvested from farms without PFCs eligible for LDP, if any was available. S. 923 would extend provision for remainder of farm bill.

Stoneville Grant Enhancing CCI Program

Stoneville Pedigreed Seed Company has agreed to support CCI’s COTTON USA Advantage International Market Development Program via new Cotton Foundation special project. Stoneville’s $75,000 grant will support CCI’s continued efforts to develop export markets for US raw cotton and US-made, value-added cotton products.

Memphis-based Stoneville has bred cotton since 1922 and focuses on cotton genetic engineering, field development and variety development programs.

Foundation Trustees Approve Projects

Cotton Foundation trustees approved 35 general cotton research and education projects for ’01-02 funded at $474,950 – slight increase from previous year. Projects, in market development, profitability and regulatory categories, cover work ranging from investigation of use of conservation tillage and drip irrigation in Texas crop management systems to refinement of particulate matter measurements.

Effective July 1, Jimmy Dodson, Robstown, TX, producer, will become Foundation president and serve as trustee and current president, Talmage Crihfield, Ripley, TN, producer, becomes chairman. Allen Helms, Jr., Clarkedale, AR, producer, was elected as new producer trustee joining re-elected producer trustees Don Cameron, Helm, CA; and Larkin Martin, Courtland, AL.

Deadline Near for Applying for Leadership Class

Applications for ’01-02 Cotton Leadership Class must be received by July 1. Industry members between ages of 30 and 45 as of July 1 are eligible. Application form is available online at Applications can be completed online and then printed for mailing to Janice McRae, P.O. Box 820284, Memphis, TN 38182-0284. Application also is available by contacting Ms. McRae at 901-274-030 or

Traders Say China to Issue Cotton Import Quotas

According to news report quoting trader at international trading house in Beijing, China is said to have decided to issue 230,000 bales of cotton import quotas. Many believe quota is open for same purposes of processing for re-export, with around 46,000 bales of import quotas recently issued.

Long-awaited move came after lobby by China’s textile industry, which has been suffering from increased costs for local cotton, trader said.

"It is quite possible as the China Textile Association has recently asked textile firms to submit their requirements," trader said. High domestic cotton prices and weak demand for Chinese textiles in world market have jeopardized country's export advantage of their textile products, sources said. In China, cotton prices have been falling recently, pressured by weak domestic demand and expected increase in ‘01-02 (Sept.-Aug.) crop, they said.

Cotton Sales Lower than Previous Week

Net export sales for week ending May 31 were approximately 65,300 (480-lb.) bales, about 43% lower than previous week’s sales, raising total ’0-01 sales to nearly 8 million. Total sales at same point in ’9-00 marketing year were about 7.51 million bales. Shipments for week were more than 150,000 bales, bringing total exports to date to about 5.33 million bales, down from 5.83 million at comparable point in ’99-00 marketing year.

Effective June 08 - 14, '01

Adjusted World Price, SLM 1 1/16           34.62 cents*
Coarse Count Adjustment                     0.00 cents
Current Step 2 Certificate Value            1.08 cents
Marketing Loan Gain Value                  17.30 cents
       *No Adjustment Made Under Step 1

Five-Day Average

Current 3135 c.i.f. Northern Europe        47.97 cents
Forward 3135 c.i.f. Northern Europe        48.26 cents
Coarse Count c.i.f. Northern Europe        47.62 cents
Current US c.i.f. Northern Europe          50.30 cents
Forward US c.i.f. Northern Europe          53.70 cents