|Chairman Lauds NCC Leadership for Response to Congress|
NCC Chairman Bobby Greene told NCC directors at their mid-year meeting in Nashville, TN, that industry leaders have responded well to the NCC’s Action Requests during the agricultural appropriations process. Efforts have paid off, as the House bill contained no farm bill amendments; Senate action on the appropriations bill has been delayed until after members return in September.
Greene cited the NCC’s continuing work on important trade issues, including a number of activities related to China: Tariff Rate Quotas, quality measurement requirements and implementation of textile safeguard provisions. More recently, he said, the NCC has employed a media plan in response to the Africa challenge, which was developed after a strategy session with a leading consulting firm. The plan will use to the fullest extent possible cotton industry trade media, wire services, national and regional newspapers, television and the Washington press.
In other reports, Cotton Council International (CCI) President Bobby Carson reported that CCI’s COTTON USA program received a 27% increase in public support this year due to "increased funds available through the new farm bill, the fact that CCI has a good program and, most importantly, the continued strong industry support and financial commitment." He said Congressional and Administration support for these programs is strong but cannot be taken for granted during this time of ballooning federal deficits.
The Marks, MS, producer also noted that 4 organizations have pledged to increase their funding levels by 40% or more this year, including the American Cotton Shippers Assn., AMCOT, Supima and the National Cottonseed Products Assn. Additionally, the Southern Cotton Growers started contributing directly to the COTTON USA program last fall, and renewed its pledge this year in spite of the very poor crop harvested last year and the need to reach into reserves to meet the commitment. The largest increase in industry funding came from Cotton Incorporated’s commitment to increase its contributions by $500,000 starting Jan. 1, ’03 - a 25% increase.
In spite of difficult financial conditions, US textile manufacturers have responded very positively in support of export promotion as well, increasing direct funding of COTTON USA programs by 136% compared with last year. Manufacturer support is focused on CCI’s programs to promote US cotton yarn and fabric in the Caribbean Basin and Andean countries through a combination of value-added buyers guides, searchable web directories of US-manufactured cotton products, trade shows and sourcing fairs to display products and select COTTON USA retail promotions.
"Remember that we achieve around a 4 or 5-to-one leverage for the funds that we put into this program," Carson said. "At a time when 65% or more of our cotton fiber - and more than 4-million bale equivalents of additional cotton yarn and fabric - move into export channels, it is hard to find more important ways to invest in our future."
Cotton Foundation Chairman Don Cameron said alliances between some of the Foundation’s 70 members and the NCC have generated about $480,000 in direct NCC budget offsets. The Helms, CA, producer said this has included sponsorship of the Cotton Biotechnology Registration and Communication project, the Cotton Pesticide Registration and Education, core NCC communications vehicles and some NCC Annual Meeting and American Cotton Producers’ activities.
Dr. Gary Adams, NCC’s vice president for economics and policy analysis, said USDA’s latest ’03 US crop estimate of 17.1 million bales, together with beginning stocks, gives total US supplies of 22.7 million bales - below either of the past 2 years. He said with the flood of imports decimating the domestic textile industry, US mill use is now expected to fall to 6.6 million bales for the marketing year, down 700,000 bales from ’02. Based on recent months, he said, that estimate appears to be realistic, but the potential exists for US exports to remain at levels comparable to last year, and if USDA’s estimate of 11.8 million bales is attained, then exports will be roughly 70% of this year’s crop.
"With a crop of approximately 17 million bales and mill use of about 6.5 million, then any exports above 10.5 million bales will reduce stocks for the ’03 marketing year," Adams said. "The balance sheet would suggest better prices, but we have to keep an eye on the underlying strength of demand and competition from manmade fibers."
|Outside Storage Rule Reviewed with USDA Officials|
The NCC Board met by conference call with Bert Farrish, deputy administrator of USDA’s Commodity Division; Paul Gutierrez, assistant deputy administrator Farm Programs; and Steve Gill, director of Warehouse and Inventory Division for a review of the new outside storage rule for Commodity Credit Corp. loan-eligible ELS cotton. They fielded questions from Board members and advisors and encouraged interested parties to provide written comments.
As reported (see Aug. 15 Cotton’s Week), the NCC is opposed to outside storage of loan-eligible cotton. It is expected that industry comments will focus on maintaining the integrity of the role of the Joint Cotton Industry Bale Packaging Committee, the increased risk facing producers using outside storage and the difficulty that producers face in meeting the requirements in the new addendum for the ELS loan.
Other industry concerns pointed to measures that USDA should take to ensure security of the collateral, to discourage the possible expansion of outside storage to San Joaquin Valley and upland cotton and to clarify compliance with technical site provisions to protect the baled lint.
|NCC Responds to Grassley Announcement|
Cotton farmers expressed disappointment in Sen. Grassley’s (R-IA) announced intentions to pursue payment limitations similar to what he sought last year. Sen. Grassley said in an interview that he is planning to introduce an amendment with a "hard cap" of $275,000-$300,000, probably in the ’04 agriculture appropriations bill.
Mark Williams, chairman of the American Cotton Producers, said Sen. Grassley’s attempt to change the farm law now would cause uncertainty among producers and destabilize the rural economy.
"Such a move would be unfortunate, especially at a time when the crop is well underway and Congress is focused on a number of critical trade issues," the Texas producer said.
"Midstream changes in program eligibility rules would negate the benefits contained in the new farm bill," Williams said. "Such changes would undermine farmers’ long-term decision-making, and therefore directly affect their financial institution’s ability to finance production agriculture. The newly enacted farm law does not require amendment. It provides a critically important safety net to cotton, grain and oilseed farmers in times of low prices."
|Boll Weevil Program in NE Arkansas Continues Despite Lawsuit|
A small group of producers in the Northeast Arkansas Delta Zone (Mississippi and eastern Craighead counties) have filed a lawsuit against the boll weevil eradication program. The plaintiffs are challenging the Arkansas State Plant Board’s (ASPB) authority to force producers into the eradication program and to collect fees to defray eradication costs.
Producers in the zone have rejected the program 5 times through referendums over the last 2 years but were forced to join the program at a cost of $8 per cotton acre for the 1st year. The ASPB maintains that the forced action was necessary to protect eradication investments made by cotton farmers on all 4 sides of the 2-county zone. If weevils are left unchecked in the hold-out counties, the entire Mid-South production area is threatened by weevil reinfestation. The cost of maintaining "buffer zones" around the Mississippi and eastern Craighead area is prohibitive.
Pulaski County (AR) Circuit Court Judge Jay Moody ruled that boll weevil eradication assessments from cotton producers in the 2 counties should be held by the ASPB until a lawsuit filed by the producers is resolved. The Arkansas Boll Weevil Eradication Foundation board voted unanimously to continue program operations in northeast Arkansas despite the lawsuit. Foundation board members agreed that if operations were stopped, the money appropriated for this year would have to be shifted to an intensively sprayed buffer around the area to prevent weevils from migrating.
Program staff established offices, mapped fields and placed boll weevil traps in the Northeast Delta earlier this summer after the ASPB voted to proceed with an eradication program. Malathion applications also began earlier in the month. Holding the funds won’t impact the eradication effort, says Foundation Director Danny Kiser. He says funds are on hand to pay for the necessary program operations this year.
The state Attorney General’s office, which represents the ASPB, filed a motion earlier in the week to dismiss the lawsuit based on the grounds that the Arkansas boll weevil legislation gave the ASPB the authority to collect funds and to "force" a program. A hearing on this motion is tentatively scheduled for Sept 5. Depending upon the outcome of the motion to dismiss, the trial would start Dec 1.
|Congressional Staffers to Visit Cotton Operations in Texas, Arizona|
Congressional staffers will observe cotton operations in the Southwest and Far West during a tour Aug. 25-28. They will visit an oil mill, a farm, a warehouse, a denim mill and the USDA gin lab during their stay in Lubbock. In Arizona, the group will tour a USDA Classing Office in Phoenix, an Arizona Cotton Research and Protection Council project and the Salt River Project.
During an Aug. 12-15 tour, another group of staffers visited Cotton Incorporated, the USDA classing office in Bartlett, TN, an eastern Arkansas farming operation and NCC headquarters. They toured Monsanto’s Leland, MS, Experiment Station and the Stoneville Gin Lab, with research overviews provided by USDA’s Agriculture Research Service and Mississippi State U., and visited a Mississippi Delta farm and the Southern Regional Research Center in New Orleans.
The 28 Congressional staff members who represent 12 states are participants in the Congressional Staff Education/Orientation Program, funded by The Cotton Foundation through a special project sponsorship by Monsanto.
|Export Sales Exceed 3.2 Million Bales|
Total ’03-04 export sales passed the 3.2-million bale mark following sales of 149,300 bales (480 lb.) in the week ending Aug. 14. Total sales at the same point in the ’02-03 marketing year were approximately 3.8 million bales. Total new crop (’04-05) sales are 93,000 bales.
Shipments for the week were 255,500 bales, bringing total exports to date to 564,700 bales, ahead of the 298,400 bales at the comparable point in the ’02-03 marketing year.
|Prices Effective August 22-28, 2003|