Cotton's Week: February 21, 2003

Strengthening US cotton’s partnerships with Cotton Foundation members in the areas of pesticide registrations and the availability, approval and acceptance of cotton biotechnology products were addressed in NCC meetings in Memphis, TN.

The Cotton Pesticide Registration and Education Project provides a vehicle for plant protection and plant health product registrants to work closely with the NCC to meet common objectives. These include strengthening the NCC’s ability to assure access to a safe and effective spectrum of new and existing cotton pesticide products; supporting NCC staff in working on general and product-specific pesticide registration issues; and supporting common efforts in providing products to the cotton industry.

The group is focusing in 4 areas: pesticide registration and re-registration, development of cotton use and usage profiles for plant protection products, support of the NCC’s Environmental Task Force and issues-related educational programs for Congressional staff.

Cotton Foundation members contributing equally toward the cost of the project with the NCC, are Bayer CropScience, Dow AgroSciences LLC, Monsanto Co., Syngenta Crop Protection and Valent USA.

The Cotton Biotechnology Registration and Communication Project is designed to strengthen the cotton industry’s position for supporting continued registration of and permits for biotechnology products. Suppliers of cotton planting seed and cotton biotechnology products are teaming with the NCC to support the project.

The project consists of a general information and education program directed at consumers; a regulatory support and coalition-building element to address Washington issues; support for an international biotechnology consultant; and technical support in the areas of agronomic issues, fiber quality, insect and weed resistance, food safety and health risks.

Six Cotton Foundation members are contributing equally to defray project costs with the NCC. The companies are Bayer CropScience, Delta and Pine Land Co., Dow AgroSciences LLC, Monsanto Co., Stoneville Pedigreed Seed Co. and Syngenta Crop Protection.

US growers will plant 14-14.5 million acres of cotton this year, encouraged by rising prices, the Agriculture Department's chief economist said during a speech at USDA's annual Outlook Forum in Washington.

Keith Collins did not update USDA’s projection, released earlier this month, of a 16.5 million-bale crop, which was based in part on plantings of 13.8 million acres. Growers planted 13.96 million acres last year and harvested 17.14 million bales.

Collins briefly discussed cotton prospects, saying, "We see stronger exports than over the past 2 years, stable US use and carryover stocks declining to the 5 million-bale range. Cotton prices look to continue to strengthen."

Ag Secretary Veneman has ordered USDA’s Risk Management Agency (RMA) to review the federally subsidized crop insurance program to "identify the underserved producers and closely examine the regions, the commodities and the risks."

In making the announcement at the annual USDA Outlook Forum, she said the review could provide USDA a blueprint should it decide to change its reinsurance agreement with crop insurers. The department has said it would defer revisions until the ’05 crop year to allow the industry time to stabilize.

Some lawmakers have suggested Congress take a look at the program this year. Crop insurance was revamped 2 years ago to encourage growers to buy higher levels of coverage, but there have been complaints of inadequate protection against weather losses.

By law, USDA can ask for renegotiation of the Standard Reinsurance Agreement between insurance companies and the RMA once between the ’01 and ’05 reinsurance years. The agreement sets operating terms between the 2 sides.

About 80% of US cropland was covered by crop insurance in ’03. Producers received $4.1 billion in crop insurance indemnities this year, up $1 billion from the previous year.

A special Joint Cotton Industry Bale Packaging Committee (JCIBPC) study committee will share progress being made on its review of all bale packaging and ties specifications. The study panel, appointed by JCIBPC Chairman Keith Pendergrass, a Georgia ginner, was aimed at ensuring these materials meet industry needs.

That progress report along with a report from the JCIBPC Executive Committee and results from a packaging material survey, a bale-size study and an ’02 experimental test program will be presented in JCIBPC’s ’03 meeting at the open session Feb. 26 from 1-4:30 p.m. at the Radisson Hotel in Memphis.

An executive session will follow that session to consider requests for ’03 material approval, and/or experimental test programs, and bale tie and bagging requests. That session will continue the following morning and will be followed by another open session at 11 a.m. in which a summary of the JCIBPC’s recommendations and experimental test programs approved for ’03 will be presented.

House Agriculture Committee Chairman Goodlatte (R-VA), in a meeting with European Union (EU) Trade Commissioner Lamy, pressed the EU to drop its moratorium on the importation of genetically enhanced foods. Goodlatte cautioned, though, that the moratorium should not be replaced with new regulations on traceability and labeling, which, he said, are unworkable, costly and do not improve food safety.

The EU has had a moratorium on ag biotechnology for more than 4 years. This moratorium may have influenced some developing countries, many in southern Africa, which is presently in the throes of a severe famine, to reject much-needed US food aid because the shipments contained biotech corn – the same products Americans have been using for years.

"The politicizing of agriculture biotechnology must end, so that we can return to providing food aid to the hungry as soon as possible," Goodlatte said. "The EU's policy is not based on sound science, and it is harmful not only to American agriculture but to those people throughout the world who are in the grip of starvation."

Goodlatte joined House Speaker Hastert (R-IL) and several other Congressional members last month in writing a letter to President Bush in support of the US government taking a case against the EU to the World Trade Organization to protest the restrictions against importation of products produced through biotechnology (see Jan. 31 Cotton’s Week). Goodlatte also met recently with EU Agriculture Commissioner Fischler and raised similar concerns.

"Agriculture biotechnology can raise crop productivity, increase resistance to pests and disease, develop tolerance to adverse weather conditions, improve the nutritional value and taste of some foods, and enhance the durability of products during harvesting or shipping," Goodlatte said. "We must continue this dialogue with the European Union so that this potential can be realized throughout the world."

Secretary of Agriculture Veneman announced the appointments of Floyd Gaibler as Deputy Under Secretary for Farm and Foreign Agriculture Services, a position that has been vacant since Hunt Shipman resigned to become Chief of Staff for the Senate Agriculture Committee; Tom Sell as Director of Intergovernmental Affairs; and Mike Torrey as Deputy Assistant Secretary for Congressional Relations.

Gaibler most recently worked as a consultant with the firm of Lesher & Russell, Inc. He also worked for the Agricultural Retailers Assn., the International Dairy Foods Assn. and the National Cheese Institute/American Butter Institute. He is a graduate of the U. of Nebraska.

Sell moves to USDA from his position as Deputy Chief of Staff for the House Agriculture Committee. He previously served as legislative assistant to Rep. Combest (R-TX) and as a member of the President’s transition team for agriculture. A graduate of Texas Tech U., Sell played a key role in the development of the ’02 farm bill.

Torrey most recently worked for the International Dairy Foods Assn. and previously worked as a legislative assistant to former Senate Majority Leader Dole (R-KS).

Net export sales for the week ending Feb. 13 were 222,900 bales (480 lbs.), almost 12% lower than the previous week, resulting in total ’02-03 sales of almost 9 million bales. Total sales at the same point in the ’01-02 marketing year were approximately 10.4 million bales. Total new crop (’03-04) sales are 571,700 bales (480-lb.).

Shipments for the week were 263,600 bales, bringing total exports to date to 5 million bales, down from 5.7 million at the comparable point in the ’01-02 marketing year.

Adjusted World Price, SLM 1 1/16             45.71 cents*
Coarse Count Adjustment                       0.00 cents
Current Step 2 Certificate Value              5.59 cents
Marketing Loan Gain Value                     6.29 cents
Import Quotas Open                                     4
Step 3 Quotas as of 1/31 (480-lb. bales)         437,672
* No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. Northern Europe          58.76 cents
Forward 3135 c.i.f. Northern Europe             No Quote
Coarse Count c.i.f. Northern Europe          54.88 cents
Current US c.i.f. Northern Europe            64.35 cents
Forward US c.i.f. Northern Europe               No Quote