Cotton's Week October 19, 2001

Cotton's Week October 19, 2001

Cotton's Week: October 19, 2001

NCC Continues to Urge Prompt Action on New Farm Legislation

NCC joined with other agriculture organizations in urging Senate Agriculture Committee to expedite development of new farm bill. Chairman Harkin (D-IA) had scheduled committee to begin work on bill on Oct. 18, but session was cancelled when House and Senate office buildings were closed for anthrax inspection.

Although supportive of committee action, NCC and other agriculture organizations urged chairman to present comprehensive package that allocates funds among titles in manner similar to House-passed bill before proceeding with title-by-title consideration.

"We continue to emphasize how important it is to have a new farm bill in place for next year," said NCC Chairman James E. Echols. "The House passed a bill that provides a fair and equitable allocation of $73.5 billion in additional spending, as authorized in the ’02 budget resolution, and was successful in rejecting amendments to reduce commodity title funding during the House floor debate. We urge the Senate Agriculture Committee to consider both the funding level and the structure of the House bill as the committee begins its work."

Concerns Expressed about Sen. Lugar’s Proposal

NCC expressed concern with 5-year farm bill concept paper unveiled Oct. 17 by Sen. Lugar (R-IN), saying "we believe it falls short of meeting the needs of US farmers, ranchers and consumers at a time when the stability and safety of our food and fiber supplies is so critical to national security."

"The commodity title of Sen. Lugar’s bill is essentially a subsidized insurance product with inadequate coverage," said NCC Chairman James E. Echols. "It would phase down the marketing loan formula in its first 3 years and discontinue it entirely over the last 2 years. The marketing loan has been the cornerstone of the U.S. cotton industry’s success since its introduction in ’85.

"We have expressed our concerns to USDA and have very strongly discouraged the department’s support of the bill. We are deeply disappointed that USDA has expressed support for the concepts in the legislation, which include the elimination of the marketing loan, and has indicated that in spite of the budget resolution it will support an increase in funding of only $25 billion over the baseline."

Echols said NCC has requested meeting with Ag Secretary Veneman to discuss ways USDA can respond to financial stress faced by US agriculture and join in effort to enact effective new farm legislation.

Sen. Lugar’s bill is said to cost $25 billion above current program spending estimates for ’03-07 period, in line with what Administration indicated it would spend for new farm bill. House bill was scored by Congressional Budget Office at just under $40 billion for those years. In addition to phasing out marketing loans, commodity title of Sen. Lugar’s bill would discontinue fixed de-coupled payments and phase down "commodity specific" support programs in its first 2 years.

Proposal incorporates whole farm revenue insurance product and doubles spending on conservation programs. It requires participants to pay 52% of premium for insurance that would guarantee, at best, 80% of farm’s 5-year average gross market revenue. A voucher would help cover producer’s share of premium, with value of voucher determined by sliding scale that is inversely correlated to farm’s gross revenue and capped at $30,000. Value of vouchers for farm large enough to be commercially viable is almost inconsequential.

Early Hotel Reservations Deadline for Beltwide
Extended to Oct. 29

Early hotel reservations deadline for ’02 Beltwide Production Conferences was extended to Oct. 29, allowing NCC and Cotton Foundation members opportunity to reserve rooms before general reservations open on Nov. 1. Conferences are scheduled Jan. 9-12 in Atlanta.

Reservations can be made through NCC web site at Members also may complete form received by mail and fax it to 866-277-2946. Multiple room reservations require separate form for each room and cannot be made in same individual's name. Web site access and fax number for reservations will be discontinued after Oct. 29 deadline.

NCC Travel and Meeting Services provides assistance in arranging travel to Beltwide. Visit ResAssist at to make reservations online. You may also complete air request form in Beltwide booklet and fax or mail it to NCC Travel Services (901-725-0510, P.O. Box 820285, Memphis, TN, 38182). Fare discounts with Northwest, Delta, and American are reflected online. (When booking online, be sure to click "Submit for Purchase" icon after flights are reserved in order for tickets to be issued. If submitted for purchase, NCC will accept this as authorization to issue ticket.)

Sample roundtrip airfares from Cotton Belt cities to Atlanta as of Oct. 18 included Bakersfield, CA, $450; Phoenix $350; Lubbock $350; Little Rock $200; Jackson, MS, $225; Memphis $130; Houston $230; Dallas-Ft. Worth $250; Monroe, LA, $225; and Raleigh, NC, $130. These fares require a Saturday night stay and are subject to availability. Fares may change at any time.

USDA Urges Farmers to Guard against Bio-Terrorism

USDA officials addressed potential for bio-terrorism activities within US agriculture and food chain in briefing for commodity organizations. Ag Secretary Veneman has been involved in discussions with newly appointed Director of Homeland Security Tom Ridge and seeks input regarding potential points of vulnerability in ag production sector.

USDA wants to avoid any long-term negative impacts on US agriculture and will take risk/benefit approach in any pending decisions. Department does not want to unduly alarm farmers but is encouraging them to take some common sense precautions, such as preventing strangers from coming on farm, being aware of any suspicious activities and considering means of securing their own operations.

In related development, Sens. Roberts (R-KS) and Hutchison (R-TX) introduced legislation designed to improve research facilities, enhance security and provide for rapid response in event of bio-terrorism action in US agriculture sector.

Secretary Veneman announced earlier this month distribution of nearly $2 million in grants to 32 states to bolster emergency animal disease prevention, preparedness, response and recovery systems.

Secretary also called for establishment of permanent agriculture infrastructure investment fund that continuously protects agriculture. "We need to take a stronger, more proactive approach to infrastructure needs of our producers," said Veneman. "This includes examining our pest and animal disease protection systems, our labs, research and food safety programs."

RMA Announces Changes to Cotton Crop Insurance

NCC was briefed by USDA’s Risk Management Agency (RMA) regarding changes in cotton crop insurance provisions for ’02 crop.

Among changes, RMA will update T-yields for spring ’02 crops based largely on adjustments originally proposed. NCC had suggested several mitigation options to offset negative impacts in areas that have experienced extended period of adverse weather, but no substantive changes were forthcoming from RMA. NCC has recommended that RMA apply new T-yields only in prospective manner (’02 crop and beyond) and replace existing T-yields in individual actual production history databases. Clarification of this matter is expected in bulletin available week of Oct. 22.

RMA also announced that late-planting period will be 15 days for all regions of Cotton Belt. Fifteen-day provision was previously implemented for Texas, New Mexico and Oklahoma, but is reduction from 25 days for other Cotton Belt regions. Cotton in some counties will receive rate adjustment for ’02 crop year based on application of normalized rate loss procedures. Under these procedures, rate adjustments are made annually for each county/crop combination to achieve compliance with target loss ratio. Maximum rate increase (decrease) for ’02 in any county is 10%. Details are forthcoming on amount of adjustment in each area.

RMA indicated that stricter enforcement of grazed small grain provision would be required. Under this provision, cotton is uninsurable on acreage for which small grain crop reaches headed stage in same calendar year unless acreage is irrigated or adequate measures are taken to terminate small grain crop prior to reaching "50% headed" stage.

EPA Schedules Public Meetings on TMDL

EPA has scheduled series of public meetings to receive input for rules to implement Total Maximum Daily Loads (TMDL) program. As rule is written currently, federal permits would eventually have to be issued to allow farm to "discharge" certain pollutants.

In October ’00, NCC joined with American Farm Bureau Federation in lawsuit against EPA regarding its proposed rule for TMDLs, arguing that EPA overstated its authority to include non-point source pollution under TMDL section of Clean Water Act. In response, EPA delayed effective date of rule to consider changes. Implementation date has been delayed by 18 months or until April ’03 while EPA collects information.

EPA will conduct 5 public listening sessions on TMDL program (Section 303(d) of Clean Water Act) and related issues in National Pollutant Discharge Elimination System (NPDES) program (Section 402 of Clean Water Act). Purpose of meetings is to obtain stakeholder perspectives and inputs on key issues associated with TMDL program and related issues in NPDES program, with view toward proposing modifications in mid-’02.

Schedule for public meetings includes Cotton Belt sites Sacramento, CA, Nov. 1-2; Atlanta, Nov. 7-8; and Oklahoma City, Nov. 15-16.

It is critical that EPA make substantial changes to TMDL rules so those farmers are not subjected to permitting program. Once rules are finalized, matter becomes state issue. NCC is emphasizing importance of farmer attendance at these meetings to provide input. For more information on these meetings, to register or for background information on TMDL program, visit EPA's TMDL web site at

Four of public meetings will focus on specific issues. EPA will summarize input received at 5th meeting in Washington, DC, and will provide opportunity for additional input. At each meeting, public will have opportunity to discuss TMDL issues both related and unrelated to specific issue of meeting.

To view this information online, go to

Export Sales Up 35% Over Previous Week

Net export sales for week ending Oct. 11 were 205,400 bales (480 lb.), almost 35% higher than previous week’s sales of 152,500 bales, raising total ’01-02 sales to over 6.6 million. Total sales at same point in ’00-01 marketing year were nearly 3.8 million bales.

Shipments for week were 160,200 bales, bringing total exports to date to slightly over 1.9 million bales, up from approximately 968,000 at comparable point in ‘00-01 marketing year.

Effective Oct. 19-25, ’01

Adjusted World Price, SLM 1 1/16    22.97 cents*
Coarse Count Adjustment             0.00 cents
Current Step 2 Certificate Value     2.36 cents
Marketing Loan Gain Value           28.95 cents
*No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. N. Europe       37.04 cents
Forward 3135 c.i.f. N. Europe          No Quote
Coarse Count c.i.f. N. Europe       34.25 cents
Current US c.i.f. N. Europe         40.65 cents
Forward US c.i.f. N. Europe            No Quote