Cotton's Week: July 18, 2003

Cotton's Week: July 18, 2003


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House Approves ’04 Ag Appropriations Measure

The House approved the FY04 agriculture appropriations bill (HR 2673) on a vote of 347-64. During floor debate, members defeated (193-208) an amendment by Reps. Hooley (D-OR) and Rehberg (R-MT) that would have removed a provision added by the subcommittee prohibiting USDA from implementing country-of-origin labeling requirements for meat and meat products.

The bill provides $51 million for boll weevil eradication, continues the Farm Service Agency’s boll weevil eradication loan authority at $100 million and provides $2 million for pink bollworm eradication. Funds are provided to Clemson U. to complete work on the textile marker system.

As previously reported, the FY04 agriculture discretionary spending levels are 2.3% below FY03.

Ag Appropriations Bill Clears Senate Committee

The Senate Appropriations Committee approved its version of the FY04 agriculture appropriations bill (S. 1427) by voice vote on July 17. The only change to the version approved by the subcommittee on July 15 was approval of an amendment authored by Sen. Dorgan (D-ND), which would relax travel restrictions to Cuba when travel is related to sale of US agriculture products and medicine.

The bill provides $51.7 million for boll weevil eradication; continues the $100 million Farm Service Agency (FSA) loan program for boll weevil eradication; provides $2.1 million for pink bollworm eradication; and authorizes USDA-FSA to allow FSA to utilize the boll weevil eradication loan program for pink bollworm eradication activities that meet the criteria.

The Senate bill, like the House bill, provides $17 billion for discretionary programs and $60.4 billion for mandatory programs. Unlike the House, the Senate version approved by the committee does not include language prohibiting USDA from implementing country-of-origin regulations for meat and meat products, nor does it prohibit USDA from implementing the new Conservation Security Program (CSP) authorized by the ’02 farm law.

The Senate may consider the appropriations measure prior to the Aug. 2 recess.

Chile, Singapore Agreements Pass Committee Tests

Legislation necessary to implement free trade agreements negotiated with Chile and Singapore (HR 2739/S 1417) cleared key Congressional committees, leading to consideration of the legislation by the House and Senate. The House may schedule the bill as soon as July 23 or 24.

On July 16, the House Ways and Means Committee approved the implementing legislation for both agreements on identical 33-5 votes. The Senate Finance Committee also approved the legislation on July 17. The agreements will be the first considered under "fast-track" procedures re-authorized in the Trade Act of ’02.

Several members of the Ways and Means Committee who voted for the agreements indicated their support should not be taken as an indication that they would support future agreements, including the Central American Free Trade Agreement (CAFTA). Members expressed concerns that the labor provisions in the Chile and Singapore agreements would be inappropriate for the CAFTA. The so-called integrated sourcing initiative (ISI) in the Singapore agreement, which allows for certain high-tech products imported by Singapore to be treated as Singaporean origin, and a provision requiring a specific number of temporary work visas be issued to workers entering the US from Singapore and Chile, also were cited as causes for concern. The ISI provision was modified in the implementing legislation to the satisfaction of a majority of committee members. The House and Senate Judiciary committees cautioned the Office of the US Trade Representative against including immigration-related provisions in future agreements.

Ways and Means to Consider Pension Rule Changes

Legislation that would increase allowable contributions to retirement accounts and change funding rules for pension plans is up for consideration by the House Ways and Means Committee. Co-authored by Reps. Cardin (D-MD) and Portman (R-OH), the legislation (HR 1776) would allow companies with pension plans to calculate funding requirements based on the corporate bond index rather than 30-year Treasury bonds.

The legislation would modify the rule for 3 years while Congress develops a permanent solution. The bill also will change the mandatory age for withdrawals from IRA accounts to 75 from 70½ and extend the tax credit for employees earning less than $25,000 a year who contribute to a retirement plan. Current law expires in ’06, but Cardin-Portman extends the tax credit to ’10.

The legislation would increase contribution limits on 401(k) and IRA plans. While the legislation is likely to be approved by the Ways and Means Committee, the outlook for approval by the full House and the Senate is uncertain. The cost of the legislation is estimated to be approximately $50 billion over 10 years.

Classing Data Now Accessible via Internet

The USDA/AMS Cotton Program has sent a letter to all cotton program dialup customers announcing that classing data is now available via the internet. An attachment to the letter references an FTP site where software that will enable connections via the internet is available.

Internet access is being added in response to customer requests. All other transmission methods (modem, diskette, ISDN) and data formats (autol, sendm, file1, ams01, natdb, futures, etc.) remain the same.

Access to classification data will require an assigned user ID and password. If you already have an ID, you will be able to access your data after installing the software. New customers must contact the appropriate office (local Classing Office, Quality Assurance or the Information Technology staff) to obtain a user ID, password and the FTP site address.

The letter includes instructions on how to load the software and strongly encourages customers maintain their modem software and connection as a backup. Questions can be directed to the Cotton Program’s Information Technology staff at 901-384-3007.

Canada Approves Bollgard II Cotton for Animal Feed Use

The Canadian Food Inspection Agency (CFIA) approved the use of Bollgard II cottonseed, cottonseed meal and hulls for use in Canada for animal feed. Components of Bollgard II were "found to be as safe and as nutritious as traditional cotton varieties."

Canadian officials are reinforced by the fact that cotton is not grown in Canada, and, therefore, "intentional or unintentional environmental effects" were not a concern. This decision provides another market for food and feed products of cotton from genetically modified varieties and further expands the use of transgenic technology adaptation in the marketplace.

The livestock feed use of Bollgard II was authorized as of June 27 and will be subject to the same phytosanitary import reporting requirements as its unmodified counterparts.

Denim Insecticide Receives Section 3 Label for Cotton

Denim, a new insecticide based on the active ingredient emamectin benzoate developed by Syngenta, recently received full registration by the EPA. Denim has been used on cotton previously through the Section 18 Emergency Exemption process. It is labeled for control of caterpillars including bollworm, budworm beet armyworm, fall armyworm and cabbage looper and suppression of spider mites. As with all plant protection products, applicators are advised to follow use directions and restrictions as published on the label.

Single Rulemaking Proposed by CPSC Staff

The Consumer Product Safety Commission (CPSC) staff released a briefing package requesting a CPSC decision to address both smoldering cigarette and small open flame ignition of upholstered furniture in a single rulemaking. CPSC started a rulemaking on small open flame ignition of upholstered furniture in ’94 and has been developing a draft flammability standard.

Since about 80% of upholstered furniture residential fire losses are related to cigarette ignitions, the CPSC staff believes it is reasonable to expand the rulemaking with an Advanced Notice of Proposed Rulemaking to cover both risks in the same rulemaking. The American Furniture Manufactures Assn. and a group of upholstery manufacturers ("Fabric Coalition") sent letters to CPSC supporting a uniform federal standard that would address both risks. About 1 million bales of cotton are used in the upholstered furniture fabric market.

Carbon Sequestration in Agriculture Discussed

The Senate Subcommittee on Clean Air, Climate Change and Nuclear Safety held a hearing on the sequestration of carbon from the environment by agriculture. The committee, chaired by Sen. Voinovich (R-OH), was very optimistic about the prospects of agriculture reducing greenhouse gas emissions by tying up carbon in plant matter and soil.

Most of those who testified agreed that agriculture's role in the potential reduction would be substantial. Debate continues as to whether to include financial incentives to growers under the Environmental Quality Incentive Program (EQIP) for a "carbon credit"-like system created under the Kyoto Protocol. This system would allocate credits for carbon tied up by agriculture to help offset emissions from industry and the general public.

While the US is not party to this treaty, the USDA saw sequestration by agriculture as a means of obtaining 12% of President Bush’s goal of an 18% reduction in greenhouse gas by the year ’10. Many current agricultural practices such as no-till planting and cover cropping already help to achieve this goal, and thus may already qualify should these benefits be realized. Proponents of agriculture were very clear on one point however. Bob Stallman, president of American Farm Bureau Federation, strongly emphasized on many occasions agriculture’s support for a voluntary, not mandatory, incentive program for growers.

Producers Get NCC, Washington Orientation

As part of NCC’s ’03 Policy Education Program, 12 NCC producer members from across the Cotton Belt received professional development and communications skills training in Greensboro, NC, where they toured Syngenta Crop Protection’s headquarters and were enlightened on The Cotton Foundation member’s role.

The group traveled to Washington, DC, for briefings on Congress’ functions and the legislative process by staff from the Senate and House Agriculture committees, USDA and NCC. They also visited with Congressional members and their staffs.

Syngenta sponsors this special project through a grant to the Foundation. The program was initiated 5 years ago to provide NCC producer members with a greater understanding of NCC’s policy development and implementation process, including attendance at the NCC’s Annual Meeting.

Sales, Shipments Climb in Most Recent Week

Net export sales for the week ending July 10 were 125,400 bales (480-lb.), resulting in total ’02-03 sales of almost 13.2 million bales. Total sales at the same point in the ’01-02 marketing year were approximately 12.6 million bales. Total new crop (’03-04) sales are 1.5 million bales.

Shipments for the week were 247,800 bales, bringing total exports to date to 11.1 million bales, slightly ahead of the 10.6 million bales 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 11.6 million bales.

Prices Effective July 18-24, 2003

Adjusted World Price, SLM 1 1/16

50.19 cents


Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

7.86 cents

Marketing Loan Gain Value

1.81 cents

Import Quotas Open


Step 3 Quotas as of 4/24 (480-lb. bales)


*No Adjustment Made Under Step I
Five-Day Average
Current 3135 c.i.f. Northern Europe

60.59 cents

Forward 3135 c.i.f. Northern Europe

63.29 cents

Coarse Count c.i.f. Northern Europe

62.65 cents

Current US c.i.f. Northern Europe

68.45 cents

Forward US c.i.f. Northern Europe

67.95 cents

Weighted Marketing-Year Average Farm Price  
Year-to-Date (August-May)

42.77 cents


**August-July average price used in determination of counter-cyclical payment

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