Cotton's Week January 12, 2001
- Dunavant Expresses Optimism for Future
- NCC Working to Improve Cotton Yield, Quality
- House Ag Subcommittee Chairmen Named
- Republicans Name New Ag Committee Members
- Leadership Group Continues Work on Farm Policy Options
- US Crop Lowered 180,000 Bales in USDA Report
- '00-01 US Cotton Production
- '00-01 World Production Up 1.8 Million Bales
- CRP Modifications, Extension Available
- Strong Week for Export Sales
- Effective Jan. 12-18, '00
- Five-Day Average
Dunavant Expresses Optimism for Future
Memphis cotton merchant William B. Dunavant, Jr., told Beltwide attendees '00 US cotton production will be about 17.2 million bales versus 16.6 million previous year-but both years were disaster in quality and yield.
For '01-02, Dunavant projected US domestic consumption of 9.9 million bales and exports of at least 8.3 million bales as Caribbean Basin Initiative kicks in. "The cotton industry has struggled the last 3 years, but I truly believe that our future today is brighter than it has been in a number of years," he said.
He said US textile industry will be fortunate to consume 9.7 million bales in '00 versus USDA's projected 9.8 million. He projected exports between 7 million and 7.3 million bales, with substantial increase in exports from February forward.
Dunavant said major buyers of world cotton have changed dramatically because of shift in textile industry from developed, including US, to developing countries.
"What we see is Mexico, Brazil, China, Bangladesh, Vietnam, Russia and Turkey expanding their cotton consumption, and the major traditional consumers like Japan, Korea, Taiwan and Hong Kong losing their textile industries," he said. Dunavant said he doesn't see China as major exporter this season because there is inadequate supply for export of high quality cotton, and because their domestic industry requires this cotton.
NCC Working to Improve Cotton Yield, Quality
NCC President McLendon told '01 Beltwide Cotton Production Conference attendees in Anaheim, CA, that NCC is devoting considerable resources to technology advances, including efforts to improve cotton yield and quality.
Efforts are necessary because combination of yield and quality losses has "wrung most of the profits out of cotton production in recent years," and "world prices continue to languish below production costs," he said.
McLendon's remarks opened '01 Beltwide Cotton Conferences. His report described NCC-supported yield and quality objectives that he said are fundamental to improving US cotton industry's profitability and maintaining its competitive edge.
He said NCC's Quality Task Force is advancing quality and yield in tandem. That panel is getting more involved in cottonseed breeding programs by state researchers, he said, to encourage more participation in localized breeding programs and ensure the maintenance of publicly developed strains as public property.
Other Beltwide reports:
Dr. Mark Lange, director of NCC's Economic Services, told conferees that current conditions are such that when world prices rise, there is no exchange-traded instrument grower can use to address marketing loan gain. "If US price fails to move up penny-for-penny with the world price, then growers' net cotton value falls despite a general increase in market prices."
Looking ahead to '01, Lange said US will have larger exportable supplies than 7.6 million bales. He said industry also awaits more definitive Chinese crop number than recent National Statistical Bureau of China's 20 million-bale '00 crop announcement before any conclusions can be drawn about additional sales to that country.
Georgia textile manufacturer Stephen Felker asked producers to grow cotton that today's high-speed textile machines can use-"then, we can maximize our use of your cotton." He said US fiber quality-micronaire, staple length, strength and uniformity-was not at optimum levels.
"The International Cotton Advisory Committee says that genetically modified cotton crops are likely to increase to 50 percent of the world crop in 5 to 7 years," he said. "GM cotton may be addressing pest control and the impact of agriculture on the environment, but do you know with certainty that it is not hurting fiber quality?"
Felker, whose firm spins about 1 million US bales annually, told conferees that new mill initiative is under development to close gap between what is produced and what mills need. "
Jim Hansen, chairman, Cotton Incorporated, told conferees that while advertising is most visible part of that organization's program, research also is key-with $7.1 million applied to more than 300 projects in '00. Emphasis, he said, was on yield enhancement, quality improvement, weed and pest control, cottonseed research, production systems research and ginning improvement.
More Beltwide news and audio of key reports are available at www.cotton.org.
House Ag Subcommittee Chairmen Named
In announcing new subcommittee structure and chairmen, House Agriculture Committee Chairman Combest (R-TX) said full committee will begin hearings in early February and March to receive specific farm commodity program recommendations from producer groups. Objective of hearings is "to craft legislation meeting the need for permanence and consistency to address low market prices (that are) financially pressuring producers and rural communities."
Named to chair subcommittees were: Rep. Chambliss (GA), General Farm Commodities and Risk Management; Rep. Lucas (OK), Conservation, Credit, Rural Development and Research; Rep. Everett (AL), Specialty Crops and Foreign Agriculture Programs; Rep. Goodlatte (VA), Department Operations, Oversight, Nutrition and Forestry; and Rep. Pombo (CA), Livestock and Horticulture.
Republicans Name New Ag Committee Members
Republicans filled House Agriculture Committee vacancies created by retirements of 4 members and departure of 4 to other committee assignments. New members are Reps. Pickering (MS), Johnson (IL), Osborne (NE), Pence (IN), Rehberg (MT), Graves (MO), Putnam (FL) and Kennedy (MN). Democrats will announce committee assignments in near future.
Leadership Group Continues Work on Farm Policy Options
Special NCC leadership committee met in Anaheim, CA, to continue selection of policy options for new farm law. Meeting followed similar session by American Cotton Producers' policy committee in December, and NCC committee will convene again during San Diego Annual Meeting later this month.
Council President Robert McLendon said, "I am confident that industry leaders will reach a timely consensus on program recommendations that can help restore industry profitability."
House Agriculture Committee Chairman Combest (R-TX) has announced plans to hold hearings on commodity titles in early February. F. Ronald Rayner, NCC Board chairman and chairman of leadership committee, said, "From producers to manufacturers, industry leaders are committed to identifying policy options that will enable our industry to regain its economic health and maintain its global prominence."
US Crop Lowered 180,000 Bales in USDA Report
USDA lowered '00-01 crop 180,000 bales (480-lb.) to 17.22 million in final report. Upland was lowered 167,000 bales to 16.8 million, while ELS crop estimate was decreased to 397,500 bales.
Planted acreage was revised downward slightly to 15.5 million, with upland acres up 15,000 to 15.4 million and ELS acres down over 30,000 to 171,500. Harvested area was reduced to 13.1 million acres compared to 13.5 million in previous month's report, following similar reduction in harvested area for Texas. National average yield was raised 12 pounds to 631 as upland yield was increased 13 pounds to 625, while ELS yield was reduced 25 pounds to 1,119.
'00-01 US Cotton Production
Harv. |
Yield per |
5-Year |
480-Lb. | |
Acres |
Harv. Acre |
Avg. Yield |
Bales | |
(Thou.) |
(Lb.) |
(Lb.) |
(Thou.) | |
UPLAND |
||||
SOUTHEAST |
3,309 |
618 |
606 |
4,259 |
Alabama |
530 |
489 |
562 |
540 |
Florida |
106 |
453 |
538 |
100 |
Georgia |
1,350 |
583 |
636 |
1,640 |
North Carolina |
925 |
747 |
586 |
1,440 |
South Carolina |
290 |
629 |
595 |
380 |
Virginia |
108 |
707 |
683 |
159 |
MID-SOUTH |
3,878 |
662 |
685 |
5,345 |
Arkansas |
950 |
733 |
724 |
1,450 |
Louisiana |
695 |
628 |
665 |
910 |
Mississippi |
1,280 |
649 |
745 |
1,730 |
Missouri |
388 |
668 |
609 |
540 |
Tennessee |
565 |
607 |
573 |
715 |
SOUTHWEST |
4,607 |
430 |
458 |
4,128 |
Kansas |
37 |
298 |
396 |
23 |
Oklahoma |
170 |
438 |
353 |
155 |
Texas |
4,400 |
431 |
462 |
3,950 |
WEST |
1,133 |
1,309 |
1,087 |
3,090 |
Arizona |
278 |
1,312 |
1,182 |
760 |
California |
770 |
1,371 |
1,084 |
2,200 |
New Mexico |
85 |
734 |
664 |
130 |
TOTAL UPLAND |
12,927 |
625 |
618 |
16,822 |
TOTAL ELS |
171 |
1,119 |
993 |
398 |
Arizona |
6 |
824 |
811 |
10 |
California |
144 |
1,167 |
1,084 |
350 |
New Mexico |
5 |
768 |
653 |
7 |
Texas |
16 |
900 |
767 |
30 |
ALL COTTON |
13,098 |
631 |
625 |
17,220 |
'00-01 World Production Up 1.8 Million Bales
In USDA's January report, '00-01 world cotton production was raised 1.8 million bales (480-lb.) to 88.4 million, based on 2 million-bale increase in China's crop. Increase follows new production estimates from China's State Statistical Bureau.
World mill use was lowered 50,000 bales to 92.21 million, led by lower estimates for Pakistan (-200,000), India (-100,000), United States (-100,000) and South Korea (-50,000). Chinese mill use was increased 500,000 bales. Estimates raise '00-01 world ending stocks 1.7 million bales to 37.4 million compared to previous month. This has corresponding ending stocks-to-use ratio of 40.5%.
With lower number for US mill use, '00-01 domestic offtake was placed at 9.8 million bales. Export projection was decreased 300,000 bales to 7.3 million. US crop estimate was lowered 180,000 bales to 17.2 million, resulting in 200,000-bale increase in ending stocks to 4.1 million. Corresponding ending stocks-to-use ratio is 24.0%.
CRP Modifications, Extension Available
USDA's Farm Services Agency announced that participants with Conservation Reserve Program contracts that expire on Sept. 30, '01, will have option to modify all or part of contract to extend expiration date for one year at same per-acre payment rate. All contracts (CRP-1s) scheduled to expire Sept. 30, '01, are eligible, but no extension will be approved if it would result in extending contract for duration of more than 15 years. Option to extend certain contracts is available until May 31, '01.
CRP participants should soon receive letter from FSA advising them of opportunity to extend contracts and advising interested parties to contact their local FSA office. FSA notice CRP-381 provides detailed information.
Strong Week for Export Sales
Net export sales for week ending Jan. 4 were about 162,500 bales (480-lb.), bringing total `00-01 commitments to almost 5.2 million. Shipments for week were about 113,000 bales, raising total exports to over 2.1 million.
Effective Jan. 12-18, '00
Adj. World Price, SLM 11/16........50.76 cents* Coarse Count Adjustment............0.00 cents Current Step 2 Certificate Value...1.76 cents Marketing Loan Gain Value..........1.16 cents Import Quotas Open..........................1 *No Adjustment Made Under Step I
Five-Day Average
Current 3135 c.i.f. N. Eur........64.59 cents Forward 3135 c.i.f. N. Eur...........No Quote Coarse Count c.i.f. N. Eur........60.33 cents Current US c.i.f. N. Eur..........67.60 cents Forward US c.i.f. N. Eur.............No Quote