|House Adopts Budget Resolution|
The House adopted a Conference Committee report on a $2.27 trillion FY04 Budget Resolution that would provide tax cuts of up to $550 billion. The Senate version of the report includes at least $350 billion in tax cuts, with a vote expected as Cotton’s Week was printed. The NCC joined 71 other commodity, conservation and nutrition organizations in a letter to the Budget Conference Committee urging no cuts in farm bill spending (see April 4 Cotton’s Week).
There were no cuts in farm bill spending over the 10-year life of the Budget Resolution. The House resolution calls for $4.865 billion in discretionary agriculture spending cuts over 10 years, beginning with $253 million in cuts in FY04. The Appropriations committees have the ultimate authority over discretionary spending cuts, including the agriculture-related cuts.
The Agriculture and other committees are required to recommend cuts in programs under their jurisdiction by Sept. 2.
|Penn Testifies on Farm Bill Implementation|
The House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management convened its first hearing to review implementation of the farm bill and the Agricultural Assistance Act of ’03. Under Secretary for Farm and Foreign Agricultural Services Penn testified at the hearing.
Penn indicated that 77% of producers elected to update their base and yield selections during sign-up. Penn also indicated that the use of temporary employees by county Farm Service Agency offices has been a tremendous help in the farm bill implementation process.
During his testimony, Penn indicated that the quality loss support in the disaster assistance legislation would be administered in similar fashion to the last disaster bill that provided separate quality loss support. He told the subcommittee that when producers sign up for the crop portion of the program their checks would be mailed in a matter of days. Sign up begins on June 6.
In responding to payment limit questions posed by Rep. Smith (R-MI), Penn said the farm bill created a Payment Limits Commission, and USDA is awaiting its report on the issue. Smith said that he hoped to work with Sen. Grassley (R-IA) to change the current law so that farmers "do not receive multi-million dollar checks."
|ACP Focuses on Cotton Varieties, Congressional Issues|
Representatives of Delta and Pine Land, Stoneville Pedigreed Seed, Bayer/Aventis, Dow AgroSciences and Beltwide Genetics made individual presentations at the spring meeting of the American Cotton Producers in Memphis on their most popular varieties now available and new varieties soon to be released. Growers were encouraged to learn that most of the current and near-term varieties show increased yield and quality along with a combination of the latest biotech traits.
Hunt Shipman, Chief of Staff of the Senate Committee on Agriculture, Nutrition and Forestry, reported on the status of the ’03 Budget Resolution (see related story) and expressed optimism that Congress would not seriously reduce farm bill spending or add any damaging payment limit provisions to the resolution. He also discussed several other issues that will be considered by the committee, chaired by Sen. Cochran (R-MS), including nutrition reauthorization and farm bill and crop insurance oversight.
Gaylon Booker, NCC consultant, provided an overview of cotton trade activities regarding Brazil, China and Free Trade of the Americas (FTAA). He also announced the start of a study on the impact of a FTAA on the cotton industry. NCC staff will perform the raw cotton analysis, and an independent contractor will conduct the textile and textile trade analysis.
|China Postpones Action on Short Fiber, Nep Standards|
A proposal to incorporate short fiber content and nep count into China’s cotton standards was suspended while government officials develop an entirely new inspection system based on instrument testing, according to media reports out of China. Uniform bale packaging requirements also will be introduced.
According to the reports, the State Development and Reform Commission (SDRC) fostered development of a provisional strategy for the reorganization of the country’s quality inspection system. The SDRC will be responsible for policy and rules to be implemented by the China Fiber Inspection Bureau and the China Standardization Administration.
It is uncertain if short fiber content and nep count will be incorporated into the new classing system. In their response to China’s proposal last year, the US government and the US cotton industry argued that, at present, there is no reliable and cost-effective method of measuring neps and short fiber.
Plans call for high volume instrument (HVI) inspection of the entire Chinese crop. Currently, about 10% of bales in a lot are tested, and the results are assigned to the entire lot. Furthermore, cotton would no longer be subject to the same test as it moves through the marketing chain.
China Textile News reports that, among other supporting measures, the State Fiber Testing Center will develop new color standards. Certification of locally manufactured HVI equipment by the end of the year and development of a certification system for authorized fiber-testing organizations also are part of the plan.
Bale packaging equipment now in use will be phased out, but the government will ensure the availability of loans at preferential interest rates so ginners can purchase new machinery, according to the China Textile News report.
Development of cotton and bale packaging standards, as well as the purchase of necessary equipment, are scheduled for completion by the end of the year. A pilot project to test the new system will start next year in designated provinces.
|USDA Raises US Production Estimate in Latest Report|
In its April report, USDA gauged US ’02-03 cotton production at 17.2 million bales, an increase of 70,000 bales. Both projected mill use and exports were unchanged at 7.6 million and 10.8 million bales, respectively. The projected total offtake of 18.4 million bales generates ending stocks of 6.3 million bales, with an estimated ending stock-to-use ratio of 34.2%.
USDA made only marginal changes to its ’02-03 world supply/demand estimates. World production was lowered 150,000 bales to 87.8 million. The largest declines are expected in Pakistan (-100,000) and India (-200,000). The world mill use estimate was raised 730,000 bales to 97.8 million, largely due to the expected increase in China’s mill use. The ending stocks projection for ’02-03 was lowered 940,000 bales to 36.6 million, for a corresponding stock-to-use ratio of 37.4%.
|Arkansas Eradication Issue Moves to Public Comment Period|
The Arkansas Plant Board gave initial approval to a plan to impose boll weevil eradication on northeast Arkansas farmers and landlords and set a 30-day public comment period that began April 9. A May 22 public hearing on the issue is scheduled in Blytheville, and the board would make a final decision after the hearing.
Farmers from Mississippi County and eastern Craighead County, who have voted 5 times since ’97 not to join the Arkansas Boll Weevil Eradication Program, said they may try to organize another referendum.
Eradication program administrators say that as long as the holdout area, known as the Northeast Delta Zone, remains outside the spraying program, millions of dollars will have to be spent each year to maintain heavily sprayed buffers around the region.
They fear that weevils from the Delta Zone will migrate, re-infesting surrounding cotton land in Arkansas, Missouri and Tennessee that is involved in the spraying programs.
The Arkansas Boll Weevil Eradication Foundation, which runs the state’s eradication effort, last month asked the Plant Board to impose the program.
|Veneman Announces Air Quality Task Force Appointments|
Agriculture Secretary Veneman announced appointments to the re-established Agricultural Air Quality Task Force for ‘03-04. The task force is chaired by Bruce Knight, Chief of the Natural Resources Conservation Service (NRCS) and made up of USDA employees, industry representatives and other experts in the fields of agriculture and air quality.
The task force will serve as an advisory committee and will operate under the terms of the Federal Advisory Committee Act, with the role of advising Veneman on issues related to agricultural air quality. Included are the strengthening and coordination of USDA air quality research efforts and identifying cost-effective ways in which the agriculture industry can improve air quality.
Cotton industry-related members of the committee are Kevin G. Rogers, Arizona producer; Roger Isom, California Cotton Ginners and Growers; Robert V. Avant, Jr., Texas Food and Fibers Commission; Calvin B. Parnell, Jr., Texas A&M U.; and NCC Senior Environmental Scientist Phil Wakelyn.
|Cotton Counts Scholarships Announced|
College-bound high school seniors of US cotton producers can apply for 3, $2,000 scholarships under the new Cotton Counts Scholarship Program.
The program is part of NCC’s Cotton Counts consumer awareness campaign supported by a Bayer CropScience grant to The Cotton Foundation. It replaces the Grow Smart scholarships offered in previous years.
Students must have a B average and plan to enroll in a 4-year ag-related curriculum in fall ’03. Applicants are asked to write an essay on the importance of cotton to US agriculture and provide a transcript and recommendation letter. Applications, which will be available April 15, must be submitted by Aug. 1, and a panel consisting of National Cotton Women’s Committee (NCWC) and industry representatives will choose finalists. Winners will be announced in September, with funds distributed in October. Applications are available from local Bayer and NCWC representatives or by contacting Cotton Counts Scholarship Headquarters at (630) 505-1100.
More information is available at the NCC web site, www.cotton.org.
|Export Sales Exceed 11.2 Million Bales|
With net export sales of 164,900 480-lb. bales the week ending April 3, total ’02-03 US cotton sales passed the 11.2-million-bale mark and pulled closer to equaling the 11.3 million bales sold at this point in the ’01-02 marketing year. New-crop (’03-04) sales are 826,600 bales.
Shipments for the week were 409,500 bales, bringing total exports to date to 7.1 million bales, down from 7.6 million at the comparable point in the ’01-02 marketing year. If the pace of recent weeks is maintained, exports for the marketing year would reach USDA’s projection of 10.8 million bales.
|Prices Effective April 11-17, 2003|
Adjusted World Price, SLM 1 1/16 48.22 cents*
Current 3135 c.i.f. Northern Europe 61.20 cents
Weighted Marketing-Year Average Farm Price
Year-to-Date (August-January) 42.03 cents**