Cotton's Week December 7, 2001

Cotton's Week December 7, 2001

Cotton's Week: December 7, 2001

Senate Returns to Farm Bill Debate Dec. 11

Following approval of motion (known as cloture) on Dec. 5 to limit debate and proceed to farm legislation (S. 1731, formerly S. 1628) by vote of 73-26, Senate broke from consideration of new farm legislation and scheduled resumption of debate for Dec. 11. Approval of motion signals there is no organized effort to filibuster Senate taking up legislation.

Earlier President Bush, speaking to Farm Journal forum, indicated Administration has no objection to moving forward with new legislation, provided policy and budget guidelines are met. During Senate Agriculture Committee consideration of legislation, Administration officials worked with Sens. Roberts (R-KS) and Cochran (R-MS) as they developed alternative proposal that was ultimately defeated in committee. In recent days, White House has issued Statement of Administrative Policy outlining strong objections to provisions of Senate Agriculture Committee bill and support for revised alternative to be offered by Sens. Roberts and Cochran.

During preliminary debate, several Senators, including Agriculture Committee Ranking Member Lugar (R-IN), outlined objections to considering new farm legislation at this time. Lugar is expected to offer substitute bill during future Senate deliberations.

On Dec. 6, Senate Majority Leader Daschle (D-SD) was reported to have said Senate could complete its work on S. 1731, but there would be insufficient time before Christmas recess to complete conference necessary to resolve differences between House bill (HR 2646) and Senate-passed bill. His spokesman later explained that Sen. Daschle still has goal of completing conference and sending bill to President before end of year.

Roberts, Cochran Outline Alternative Bill

Provisions of legislation which Sens. Roberts and Cochran intend to offer as substitute to Senate Agriculture Committee’s bill (S. 1731) when debate resumes on new farm legislation were outlined in session with agriculture community. USDA and Administration have stated support for provisions, which include, for cotton and conservation:

  • Loan rate: 51.92 cents/lb.
  • Direct payment: 14.18 cents/lb.
  • Target price: not applicable.
  • Farm Savings Account: CCC to make matching contribution up to $10,000/yr.
    Marketing Loan: AWP trigger retained.
  • 3-Step Competitiveness: retained; 1.25 cents threshold eliminated.
  • Base acreage: retain ’02 base (add oilseed) or use ’98-01 average.
  • Yield: retain ’02 (assign oilseed yield).
  • Payment base: 85% of base acreage.
    Payment limitations: $80,000/person direct payments; $75,000/person loan deficiency and marketing loan gain payments; $10,000/producer savings account match; 3-entity rule continued; certificates continued.
  • WTO: direct payments assumed "green box."
    Conservation Reserve Program: 40 million acres cap.
  • Wetlands Reserve Program: 1.25 million acres cap; 250,000 acres/yr. new enrollment.
  • Environmental Quality Incentive Program (EQIP): $750 million in FY02, increasing to $1.65 billion in FY06.
  • Working Land Environmental Improvement Option: funding set aside within EQIP for conservation measures.
  • Wildlife Habitat Improvement Program: $50 million FY02, increasing to $100 million in FY06.
  • Farmland Protection Program: $65 million in FY02, increasing to $100 million in FY06.
  • Grasslands Reserve Program: 2 million acres enrolled in 30-year and permanent easements.

One-Vote Victory for TPA in House

House approved legislation providing President with Trade Promotion Authority (TPA) by narrowest of margins, 215-214, after intensive lobbying effort by Administration and business and agriculture organizations.

Reports indicate that in final minutes leading up to vote, several textile-state Republicans were given concessions in return for critically needed votes for passage. Legislation, if also approved by Senate, would give President authority to negotiate international trade agreements that would be presented to Congress for approval or disapproval without amendments.

In compliance with Board resolution, NCC urged members to support TPA only if negotiating principals and objectives precluded US negotiators from reducing tariffs on textile and apparel imports until other countries reduce tariffs to US levels.

Throughout process, authors of legislation had sought to ensure members of Congress they would be consulted during negotiations. Authors also added provisions to legislation identifying specific negotiating objectives for next WTO round, as well as specific provisions related to labor and environmental considerations. Senate Finance Committee Chairman Baucus (D-MT) has indicated his committee will consider TPA legislation as early as Dec. 11, but Majority Leader Daschle (D-SD) has consistently maintained Senate will not act on legislation until next year.

Immediately following House vote, NCC Chairman James Echols reiterated importance of textile negotiating objectives in communication to Congress and Administration. Echols stated, "We look forward to the opportunity to work with Congress and the Administration to see that the US textile industry’s top priorities are addressed as World Trade Organization (WTO) and other trade talks proceed."

Communication noted textile negotiating rules should 1) permit no further cuts in textile tariffs in upcoming WTO or other textile trade negotiations, 2) provide reciprocity with respect to textile and apparel market access provisions and 3) require all major textile exporting countries to reduce their textile and apparel tariffs (bound and applied) to levels comparable with existing US tariffs.

Production Conference Offers Wide Variety of Topics

In addition to 4 panel discussions, number of individual presenters will provide updates on several key topics at ’02 Beltwide Cotton Production Conference, Jan. 9-10, in Atlanta, GA.

"Technology, the Common Thread – Tools for Production" is theme for conference, first session of which will be opened by Georgia Commissioner of Agriculture Tommy Irvin. NCC Chairman James Echols will provide update of NCC activities, and Texas Tech U. physiologist Dan Krieg will follow with presentation on "Cotton Improvement: Yield vs. Quality?"

Panel discussions on "Cultivars – What’s Needed, What’s Imminent, What’s in the Pipeline" – moderated by producer James H. Sanford, Prattville, AL, and "Cultural Practices Impact Costs," moderated by producer F. Ronald Rayner, Goodyear, AZ, followed by Bt cotton update from Walt Mullins, Monsanto Co., will close Jan. 9 session.

Cotton Incorporated President and CEO J. Berrye Worsham, III, will open Jan. 10 session with report on organization’s activities. Anderson D. Warlick, president, Parkdale Mills, follows with "Outlook for Domestic Textile Industry" presentation.

Producer and NCC Vice Chairman Kenneth Hood will moderate panel discussion covering "Perspectives on Practices of Competitors." Presentations on "Insects in Low-Spray Environments" by Louisiana State U. researcher Roger Leonard; panel discussion covering "Cotton Nematode Management" moderated by producer and NCC Executive Committee Chairman Robert E. McLendon; and "Marketplace Insights" presented by Dunavant Enterprises Chairman William B. Dunavant, Jr., close out conference.

Complete ’02 Beltwide Cotton Conferences’ program is available on NCC’s web site at . Printed copies of program will be available at conferences. Meeting registration form and travel and other information, including sampling of reduced airline fares, is at

EPA Releases Preliminary Cumulative Risk Assessment

EPA released its long-awaited, 3,000-page preliminary assessment of cumulative risks of organophosphate pesticides (OPs). Food Quality Protection Act (FQPA) allows EPA to complete this type of pooled risk assessment if it is determined that group of pesticides act biologically in same manner.

This cumulative assessment considers potential exposures to 31 OPs through food, drinking water and residential uses. Residential uses include pesticide applications in and around homes, schools, public buildings, golf courses, parks, public health-related uses and other areas where people may be exposed to pesticide residues. Exposure to OP residues in food was estimated on nationwide basis; however, for drinking water and residential exposures, EPA estimated risks within each of 12 US regions.

EPA considers results to be preliminary and is seeking both scientific peer review and widespread public comment on its analysis and many new scientific techniques used to develop risk assessment. Agency will present preliminary assessment at 2 public meetings - Technical Briefing scheduled for Jan. 15 and Committee to Advise on Reassessment of Transition Working Group on cumulative risk on Jan. 16 - and Federal Insecticide, Fungicide, Rodenticide Scientific Advisory Panel meeting on Feb. 5-8. Public comment period is open through March 8, ’02.

EPA is still examining results of these analyses. Therefore, it is too soon to draw firm conclusions about risks or consider risk management possibilities. Agency is cautioning against premature conclusions based on this preliminary assessment and against any use of information contained in these documents out of their full context. EPA has restated its confidence in overall safety of food supply and emphasized importance of eating varied diet rich in fruits and vegetables.

EPA's analysis indicates that drinking water appears not to be contributor to risk. EPA also stated that "if any mitigation is needed for food, it will likely be limited to a small number of uses." Assessment does appear to show some residential risk of concern, specifically inhalation exposure from indoor use of DDVP, such as from pest strips and crack and crevice treatments.

EPA intends to issue revised cumulative risk assessment by August ’02. More information is available at EPA web site, .

Cottonseed Ammoniation Subject of FDA Meeting

Ammoniation of cottonseed for reduction/elimination of aflatoxin and how to get Food and Drug Administration (FDA) approval for this procedure was reviewed in meeting requested by FDA. Meeting included producer, ginner and other interested representatives from California, Arizona, Texas, Mid-South and Southeast and representatives of FDA, Center for Veterinary Medicine (CVM) and Center for Food Safety and Applied Nutrition (CFSAN).

FDA considers ammoniation of cottonseed for reducing or eliminating aflatoxin to be "food additive." FDA has not approved ammoniation process for cottonseed fed to dairy cattle. Cottonseed containing aflatoxin can cause milk to be contaminated, resulting in milk being dumped.

Aflatoxin is big problem in Arizona, Southern California and South Texas and can be occasional problem in Mid-South and Southeast. When aflatoxin contamination is present, value of cottonseed is greatly reduced.

FDA outlined various options for approval, including food additive petition; general recognized-as-safe determinations; and advisory opinions. However, FDA officials prefer food additive petition approach, which can be long-term process. Industry will continue to work with FDA for ammoniation approval.

RMA Establishes Price Elections

USDA's Risk Management Agency (RMA) established price elections for most ’02 crop year spring crops insured under federal crop insurance program. Price elections are basis of crop insurance premiums that help farmers manage risk throughout growing season.

RMA noted that levels can be revised upward (but not lowered) when ’02 commodity loan rates are determined. Revisions also could occur if Congress alters loan rates for ’02 crops before Jan. 15, ’02.

Established price elections are cotton, $.50/lb.; corn, $2/bu.; flax, $5.21/bu.; grain sorghum, $1.85/bu.; rice, $6.50/cwt.; sunflowers, $.093/lb.; and soybeans, $4.92/bu.

Net Export Sales Remain Strong

Net export sales for week ending Nov. 29 were 307,200 bales (480 lb.), more than 58,000 bales higher than previous week’s 248,700 bales, raising total ’01-02 sales to almost 8.7 million. Total sales at same point in ’00-01 marketing year were approximately 4.6 million bales.

Shipments for week were 208,600 bales, bringing total exports to date to approximately 3.1 million bales, up from almost 1.6 million at comparable point in ’00-01 marketing year.

Prices Effective Dec. 7-13, 2001

Adjusted World Price, SLM 1 1/16            28.63 cents*
Coarse Count Adjustment                      0.00 cents
Current Step 2 Certificate Value             1.10 cents
Marketing Loan Gain Value                   23.29 cents
*No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. Northern Europe         42.70 cents
Forward 3135 c.i.f. Northern Europe            No Quote
Coarse Count c.i.f. Northern Europe         39.22 cents
Current US c.i.f. Northern Europe           45.05 cents
Forward US c.i.f. Northern Europe              No Quote