Cotton's Week: September 17, 2004

Cotton's Week: September 17, 2004

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Senate Adds Disaster Amendment

During consideration of the FY05 funding measure for Homeland Security, the Senate accepted an amendment estimated to provide about $2.9 billion for disaster assistance for farmers. Although the amendment is estimated to cost $2.9 billion, if qualifying losses exceed $2.9 billion such sums as necessary are available and there would be no pro-ration required.

The amendment would provide crop loss, quality loss and livestock assistance programs for qualifying losses sustained by producers in counties designated as primary or contiguous disaster areas. Producers would be allowed to choose to receive assistance for qualifying losses for either ’03 or ’04.

The assistance program would be similar to the disaster program used for ’00 crop year losses. Production losses in excess of 35% of the higher of actual production history as determined for crop insurance or 5-year NASS county average yield, or NAP-approved yield would qualify for compensation of 65% of crop insurance price election, if insured, and 60% if not insured. A quality loss program would cover losses if the loss is at least 20% of the value of the crop had loss not occurred. Compensation of 65% of the difference between expected quality value and actual quality value would be made available on 65% of the crop affected if 20% threshold is reached.

Producers who receive assistance on insurable crops will be required to purchase insurance for ’05 and ’06. Per person payment limitations and maximum personal gross income eligibility provisions will be the same as previous disaster assistance programs.

The Homeland Security Measure now goes to conference committee. The disaster assistance provision could remain part of Homeland Security legislation or be considered as a free-standing measure. The legislative process will be determined when Congress returns the week of Sept. 20.

Meanwhile, although it may take several weeks to get a firm assessment on the hurricanes’ full impact on the US cotton crop, NCC economists and field staff are working with state and countyExtension professionals to assess damages. Some member producers and ginners also are being contacted to better understand losses.

NCC Senior Economist Stephen Slinsky said that, “Every lost pound of lint and seed is important to our industry so we want to provide policymakers with the most accurate information possible — as quickly as possible, facilitating efforts to get our members needed assistance.”





Panel Approves FY05 Ag Funding Bill

The Senate Appropriations Committee approved a FY05 agriculture funding measure. Approval came after adoption of several modifications to the subcommittee’s bill and rejection, on a 14-14 vote, of an amendment that would have required country of origin labeling for meat and other products to be implemented Jan. 1, ’05 instead of in ’06 as provided in current law.

The Committee accepted an amendment, which would remove any spending cap on the Conservation Security Program and allow it to be operated as provided in the ’02 farm law.





CRP Sign-Up Ends Sept. 24

Conservation Reserve Program (CRP) general sign-up, which began Aug. 30, will run through Sept. 24. Producers may sign-up at their local FSA offices.

This sign-up is an opportunity for new participants or for participants with contracts expiring in ’04 or ’05 to make new contract offers and potentially renew participation in the program.

USDA will continue to evaluate and rank eligible CRP offers using an Environmental Benefits Index (EBI), which is based on the potential environmental benefits gained from enrolling the land in the CRP. Decisions on the EBI cutoff will be made after this sign-up ends. The EBI cutoff used in previous sign-ups may be different for this sign-up. The cutoff is determined after analyzing the EBI factors of all the offers. Those who would have met previous sign-up EBI thresholds are not guaranteed a contract under this sign-up.

FSA is authorized to allow CRP enrollment up to 39.2 million acres. About 34.9 million acres were enrolled in CRP contracts as of July ’04. The contracts awarded under this sign-up will become effective on Oct. 1, ’04, or Oct. 1, ’05, at the producer's choice.

In addition to general sign-up, producers may enroll the most environmentally sensitive land under CRP's continuous sign-up program. Under the continuous sign-up, relatively small amounts of land serving to protect much larger areas, such as filter strips, riparian buffers and grass waterways, may be enrolled at any time. More information on the CRP and USDA's other conservation programs is available at local FSA county offices and at www.usda.gov.





NCC Asking For Extension on FSA Proposal Comments

NCC joined the American Farm Bureau and others in requesting an extension of the comment period for USDA’s “Proposed Uniform Guidelines for Conducting Farm Service Agency County Committee Elections” published Aug. 17, ’04.

The request for an additional 30 days for comments would allow farm organizations and others to further review the proposed changes to the election process and to provide comments on behalf of members.





USTR Ambassador Tours Delta, Talks Trade Issues

Ambassador Allen F. Johnson, the US chief agriculture negotiator in the Office of the US Trade Representative, conducted 2 agricultural field work days and met with cotton and rice groups in Missouri and Mississippi.

The work days are among a series that he began last year to get first-hand knowledge from farmers and ranchers and gain perspectives and insights to improve USTR's effectiveness.

While in Mississippi on Sept. 18, Amb. Johnson was scheduled to operate a cotton picker on Kenneth Hood's operation in Gunnison; meet with Mississippi cotton grower leadership in Clarksdale and do farm work on Dan Branton's cotton farm and catfish operation in Burdette. While in the Missouri Bootheel the previous day, he toured a Riceland Foods facility, helped with a rice harvest and met with local rice farmers.

Amb. Johnson's spent previous work days on Iowa hog and soybean farms, a Montana cattle ranch, and on Kansas wheat, milo and corn farms. He also spent a week on California fruit, nut and vegetable farms.





FTA Signed With Bahrain

The US signed a free trade agreement with Bahrain, but it is unclear when Congress will consider the implementing legislation. USTR said the agreement, once enacted, will allow 81% of all US agricultural exports to Bahrain to be duty-free. Two-way trade in ’03 totaled about $900 million, with US exports valued at $500 million.

The US cotton and textile industry expressed opposition to the agreement because it would allow apparel products assembled in Bahrain using non-US components to enter the US duty-free.





Changes Proposed to Section 18’s Released

The EPA released its proposed changes to the emergency exemption process known as a Section 18 on the Federal Register. The proposal is based on a ’03 pilot program, and would make documentation of damages easier to establish and create a system for multi-year renewal of chemicals requested under a Section 18. Additionally, administrative changes will be made that will conform to requirements of the Food Quality Protection Act and the Endangered Species Act and clarify the treatment of “invasive species” as a basis for a section 18 approval. 

The proposal allows for the establishment of a re-certification program for existing emergency conditions for up to 3 years. This would allow growers, who have had persistent pest problems that require a yearly emergency exemption, to utilize the previous year’s application. Using this method, the EPA reports that average review times have been 9 days. Additionally, the determination of “significant economic loss” will be modified to judge the economic impact of the pest emergency relative to yields and/or revenues without that emergency. Under the current system, the EPA determines economic loss based on a comparison of the anticipated yield losses to the historic yield. 

Absent from the proposal is a provision many wanted to allow for a section 18 exemption to manage resistance development. While admitting this proposal has merit, the EPA contends that the passage of PRIA or the “fees bill,” which establishes additional fees to registrants, will allow EPA to clear its work backlog and make more timely decisions that will help speed products used for resistance management. 

The NCC plans to comment on the proposed rule and urge the adoption of a resistance management component.





Cerexagri Newest Foundation Member

The Cotton Foundation gained a new member in Cerexagri, Inc. In early ’01, the Agricultural Chemicals Division of Elf Atochem became Cerexagri, Inc., a wholly-owned subsidiary of ATOFINA Chemicals, Inc.

The King of Prussia, PA-based company has a global presence in the production and sale of fungicides, herbicides and insecticides. For more information, visit http://www.cerexagri.com/usa/.





’05 Beltwide Programming Taking Shape

Topics for the 50th Beltwide Cotton Production Conference are being finalized. The 2-day session will be held as part of the ’05 Beltwide Cotton Conferences at the New Orleans Marriott and Sheraton New Orleans hotels Jan. 4-7.

The production conference’s general session will begin with NCC Chairman Woody Anderson’s report on key industry issues and NCC Senior Vice President John Maguire’s update on Washington, DC, activities. Among other topics being considered: 1) production systems and tillage issues, including a discussion of stale bed, limited till and no-till; 2) new chemistries and transgenic products in the pipeline, including a look at today’s regulatory environment; 3) weed resistance management; 4) managing today’s insect pests and 5) quality impacts on producer income.

Other key presentations include an innovative grower panel representing all Cotton Belt regions and marketplace insights from Memphis merchant William B. Dunavant, Jr.

An information booklet will be mailed later this month to previous and potential attendees, and that information will be available at http://beltwide.cotton.org. Simultaneously, NCC members will be sent a letter regarding early hotel reservations. Others will be able to make hotel reservations beginning Nov. 2. For further information, contact the NCC’s Debbie Richter at (901) 274-9030 or email beltwide@cotton.org.





Exports Still Ahead of ’03-04 Pace

Net export sales for the week ending Sept. 9, ’04 were 62,100 bales (480-lb.), resulting in total ’04-05 sales of more than 5.4 million. Total sales at the same point in the ’03-04 marketing year were about 3.6 million bales. Total new crop (’05-06) sales are 162,800 bales (480-lb.).

Shipments for the week were 62,800 bales, bringing total exports to date to 933,500 bales, below the 1.1 million bales at the comparable point in the ’03-04 marketing year.


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Prices Effective Sept. 17 - 23, 2004

Adjusted World Price, SLM 1 1/16

42.32 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

0.00 cents

Marketing Loan Gain Value

9.68 cents

Import Quotas Open

 3

Step 3 Quotas (480-lb. bales)

 356,008

ELS Payment Rate

 0.00 cents

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

 57.38 cents

Forward 3135 c.i.f. Northern Europe

 No quote

Coarse Count c.i.f. Northern Europe

 55.63 cents

Current US c.i.f. Northern Europe

 56.75 cents

Forward US c.i.f. Northern Europe

 No quote

 
2003-04 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-July)

 62.23 cents

**

**August-July average price used in determination of counter-cyclical payment. Preliminary price. Revised data released in USDA/NASS Agricultural Prices report on Sept. 29.



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