Veneman Says Farm Bill Going Forward
Agriculture Secretary Veneman agreed that Congress will push ahead over Bush Administration objections with major revisions in farm policy and promised to work with Senate in writing legislation, according to media reports.
"We would prefer that we have more time to complete a thoughtful farm bill, but if the leadership is going forward to try and complete a farm bill, we want to make sure that we have appropriate input into the process," Secretary said.
Senate Agriculture Committee is expected to start writing version of bill week of Oct. 15, beginning with relatively non-controversial sections.
House approved legislation to extend farm and conservation assistance programs in amount of $170 billion over next 10 years. Administration had appealed to House leaders to delay work on bill, saying it was too soon after Sept. 11 attacks to commit that much money to farm programs.
Administration is still trying to agree on what spending level it will support, Veneman said.
Ways and Means to Consider Economic Stimulus Package
Committee Chairman Thomas (R-CA) spelled out starting point for House Ways and Means consideration of economic stimulus package in statement. Committee is scheduled to begin work on package that would include depreciation reform, corporate alternative minimum tax relief, tax breaks for low- and moderate-income taxpayers and acceleration of some provisions of tax relief legislation approved earlier this year.
There are indications that bipartisan spirit that has been so prevalent in recent months may not prevail during consideration of legislation. Democratic leaders of House and Senate have recently complained that their recommendations are not receiving due consideration by White House and House Republican leaders. Reportedly, House Democrats are preparing alternative $110 billion package that includes more spending provisions and benefits targeted to individuals who did not receive tax rebates under earlier tax relief measure.
NCC joined American Textile Manufacturers Institute in urging inclusion of provision to provide 10-year carryback for net operating losses. In letter to Chairman Thomas and members of committee, NCC Chairman Jim Echols urged support for provision in consideration of significant losses suffered by industry due to import surge spurred by weak Asian currencies and drop in consumer purchases of textiles and apparel products following Sept. 11 terrorist attacks. Echols pointed out lack of liquidity in textile sector has resulted in weak volume of sales to mills even though cotton is at historically low price.
Senate Finance Committee Chairman Baucus (D-MT) indicated his committee is developing proposal but has not scheduled markup at this time.
TPA Legislation Heads for House Following Committee Approval
Legislation providing Trade Promotion Authority (TPA, H.R. 3005) that would renew President’s authority to negotiate trade agreements and submit them to Congress for final approval or rejection was approved by House Ways and Means Committee. Bill passed on largely party line vote of 26-13, with only 2 Democrats in support.
Legislation includes negotiating objective on labor and environment that parties to any agreement must effectively enforce their own labor and environmental laws. Negotiating objective on enforcement would provide negotiators with direction to treat all principal negotiating objectives equally. Measure directs US Trade Representative to preserve ability to enforce US trade remedy laws and to avoid agreements that weaken effectiveness of US anti-dumping or countervailing duty laws. There are negotiating objectives specific to agriculture and requirement that US negotiators consult with House and Senate Agriculture committees.
Bill did not include NCC-supported provisions calling for equitable market access for US textiles and negotiating rules requiring all major textile-exporting countries to reduce their tariffs to levels comparable with US tariffs.
TPA would apply to agreements entered into by June 1, ’05, with possible 2-year extension. Negotiations already begun would be exempted from legislation pre-start consulting requirement.
Measure will now be considered by full House, where final outcome is still in doubt. Ways and Means Committee Chairman Thomas (R-CA) expressed confidence that there is sufficient support for passage, but Democrat leaders indicate there is still significant opposition over labor, environment and enforcement provisions. Some conservative Republicans have insisted on seeing content of economic stimulus package before approving TPA, and some members of Agriculture Committee have expressed reservations about TPA in light of Administration’s opposition to House farm bill as expressed in letter from Office of Management and Budget.
In related development, US and Qatari officials indicated intentions to hold World Trade Organization ministerial meeting in Doha, Qatar, Nov. 9-13 as scheduled.
’02 AMTA Advance Payment Delayed
Producers can expect delays in receiving ’02 Agriculture Market Transition Act advance payment due to computer software problem, according to Farm Service Agency officials. Advances will continue to be available as provided in FAIR Act. Resolution of software difficulty is expected by end of October.
Quality Concerns under Study
In response to early season quality concerns related to Mid-South crop, NCC staff is working cooperatively with USDA-AMS, seed companies and select growers on limited study investigating factors contributing to higher-than-expected percentage of crop with short staple length and high micronaire. Study’s results will be forwarded to NCC Quality Task Force for further analysis and possible expanded study.
Beltwide Panel Will Focus on Grower Initiatives to Reduce Costs
NCC’s ’02 Beltwide Cotton Conferences include panel focused on grower initiatives to reduce production costs. Panel is scheduled for general production conference on morning of Wednesday, Jan. 9, and features growers and cotton specialists who will highlight management decisions for low-price environment.
In another development, exhibitor signup brochures were mailed to Cotton Foundation members, who are encouraged to secure space at conferences’ Technical Exhibits at Atlanta Marriott Marquis, Jan. 9-10. Application deadline is Nov. 15.
Technical Exhibit is designed to encourage one-on-one interaction among cotton producers, consultants, researchers and other attendees with Foundation member firms regarding those firms’ product/service data and Foundation special research and education projects they sponsor. For more information, contact NCC’s Paul Dugger at (901) 274-9030.
USDA Makes Slight Upward Adjustment in Crop Size
USDA raised October estimate of ’01-02 US cotton production to 20.07 million bales, up 80,000 bales from September report. Upland production is estimated at 19.46 million bales, up from 19.38 million in September, while ELS production estimate is unchanged from previous month at 615,000 bales.
Upland forecast in West was raised 50,000 bales to 2.75 million based on 36-pound increase in California’s projected yield to 1,392 pounds. Mid-South crop was increased 30,000 bales to 6.82 million as region’s yield was raised 3 pounds to 717.
National average yield is estimated at 681 pounds per harvested acre, increase of 2 pounds from September. Upland yield was increased 3 pounds to 672, while ELS yield remained 1,235 pounds.
Cotton ginnings through Oct. 1 were 2.01 million running bales. Because of large production estimate, cottonseed production is estimated at 7.55 million tons.
US Cotton Crop, ’01-02
YIELD PER |
5-YEAR |
480- | ||
HARV. |
HARV. |
AVG. |
POUND | |
ACRES |
ACRE |
YIELD |
BALES | |
Thou. |
Lb. |
Lb. |
Thou. | |
UPLAND |
||||
SOUTHEAST |
3,470 |
704 |
624 |
5,086 |
AL |
605 |
742 |
582 |
935 |
GA |
1,490 |
680 |
629 |
2,110 |
NC |
975 |
729 |
645 |
1,480 |
SC |
296 |
649 |
617 |
400 |
VA |
104 |
743 |
707 |
161 |
MID-SOUTH |
4,565 |
717 |
701 |
6,820 |
AR |
1,080 |
778 |
744 |
1,750 |
LA |
855 |
595 |
674 |
1,060 |
MS |
1,630 |
751 |
753 |
2,550 |
MO |
395 |
753 |
637 |
620 |
TN |
605 |
666 |
592 |
840 |
SOUTHWEST |
4,700 |
471 |
478 |
4,610 |
OK |
200 |
504 |
443 |
210 |
TX |
4,500 |
469 |
479 |
4,400 |
WEST |
1,003 |
1,314 |
1,171 |
2,745 |
AZ |
278 |
1,260 |
1,253 |
730 |
CA |
655 |
1,392 |
1,182 |
1,900 |
NM |
70 |
789 |
685 |
115 |
OTHER STATES* |
161 |
584 |
506 |
196 |
TOTAL UPLAND |
13,899 |
672 |
642 |
19,457 |
ELS |
239 |
1,235 |
1,037 |
615 |
AZ |
6 |
960 |
855 |
12 |
CA |
209 |
1,286 |
1,114 |
560 |
NM |
7 |
686 |
664 |
10 |
TX |
17 |
932 |
787 |
33 |
ALL COTTON |
14,138 |
681 |
649 |
20,072 |
US Carryover Projected at 8.8 Million Bales
With USDA October report projecting modest increase in ’01-02 US cotton production to 20.07 million bales and unchanged offtake, projected ending stocks for ’01-02 were raised to 8.8 million bales, highest since ’85-86 when ending stocks were 9.3 million. That would equal stocks-to-use ratio of 50.9%. Projected exports and mill use remained unchanged at 9.0 million bales and 8.3 million bales, respectively.
Slight Drop in World Production, Mill Use Projected
USDA decreased estimated ’01-02 world production by 150,000 bales to 96.07 million in its October report. Major changes in expected production were Brazil (-450,000), Argentina
(-200,000), Australia (-100,000) and US (80,000). Projected mill use decreased 470,000 bales to 92.08 million bales. Major changes in projected mill use include India (-200,000), Indonesia (-100,000) and Pakistan (-50,000).
World ending stocks for July 31, ’02, were pegged at slightly over 43 million bales, up 530,000 bales from previous estimate. Corresponding stocks-to-use ratio for ’01-02 is projected to be 47.0%.
NCC Requests Emergency Funding to Rebuild NYBOT Facility
In letters to chairmen and members of House and Senate Appropriations committees, NCC requested assistance in providing emergency financial support to rebuild facility that housed New York Board of Trade (NYBOT) and New York Cotton Exchange before it was destroyed in Sept. 11 attacks on World Trade Center.
"The cotton exchange provides a vital service to the US cotton industry, as the NYBOT cotton futures and options provide for price discovery and risk management tools," NCC Chairman Jim Echols said in letter. "The NYBOT futures and options prices not only serve as a basis for US cotton trade, but as a means of establishing the price of a significant volume of the world cotton trade."
NYBOT was housed in 4 World Trade Center, which was destroyed in collapse of WTC’s twin towers. Board maintained disaster recovery backup facility, and trading in cotton contracts resumed on Sept. 17. "We understand the backup facility will need to be expanded until such time as a permanent facility can be constructed," Echols stated in letter.
NYBOT officials have provided Congress, Administration and City of New York with detailed budget estimate for maintaining operations at temporary location and for construction of new permanent facility.
"We urge you . . . to make the necessary funds available so that the NYBOT can continue to serve as the premier price discovery point for cotton and other commodities," letter stated.
Cotton Export Sales Reach 6.4 Million Bales
Net export sales for week ending Oct. 4 were 152,500 bales (480 lb.), slightly lower than previous week’s sales of 154,400 bales, raising total ’01-02 sales to over 6.4 million. Total sales at same point in ’00-01 marketing year were nearly 3.7 million bales.
Shipments for week were 233,400 bales, bringing total exports to date to slightly over 1.7 million bales, up from approximately 902,400 at comparable point in ’00-01 marketing year.
Effective Oct. 12-18, ’01
Adjusted World Price, SLM 1 1/16 24.26 cents*
Coarse Count Adjustment 0.00 cents
Current Step 2 Certificate Value 1.67 cents
Marketing Loan Gain Value 27.66 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 3135 c.i.f. N. Europe 38.33 cents
Forward 3135 c.i.f. N. Europe No Quote
Coarse Count c.i.f. N. Europe 35.45 cents
Current US c.i.f. N. Europe 41.25 cents
Forward US c.i.f. N. Europe No Quote