|President Signs Disaster Assistance Package|
President Bush signed a $14.5 billion dollar disaster assistance package for this year’s hurricane victims. The crop loss disaster portion of the package provides financial assistance to producers on a farm incurring qualifying crop or quality losses (other than producers of sugarcane) due to damaging weather or related conditions for either the ’03, ’04 or ’05 crop (’05 losses must be a direct result of the ’04 hurricane season). Program benefits will not be prorated.
USDA will administer this program in the same fashion as the ’01 agriculture disaster package. Farmers will be compensated if their losses exceed 35% of historic yields. Farmers with eligible losses of insured crops will be compensated at 65% of crop insurance market price elections; farmers with eligible losses to uninsured crops (for which crop insurance is available) will be compensated at 60% of the crop insurance market price elections and must agree to purchase crop insurance for the next 2 crop years. Benefits are limited to $80,000 per person, and those with adjusted gross incomes of greater than $2.5 million in ’03 are not eligible. The bill also limits financial assistance to no greater than 95% of what the crop’s value would have been in the disaster’s absence.
The package’s estimated cost was offset by capping the Conservation Security Program. NCC joined 23 other commodity and farm organizations in urging Congress not to modify the farm law in order to generate spending offsets. The groups reiterated their longstanding concerns that modifications to the law would jeopardize the fragile coalition that worked for its enactment. Following House approval of the coverage with the offset, the groups urged the Conferees to retain the disaster assistance funding, but to eliminate the offset - noting that the agriculture assistance was the only provision that included an offset.
In addition to other specific agricultural assistance, the bill provides $10 million in assistance to producers and first handlers of the ’04 crop of cottonseed located in counties receiving a Presidential disaster declaration in ’04 due to hurricanes. These funds were designated as emergency spending. NCC will continue to work with USDA and affected producers as the regulations for this assistance are created by that agency.
A summary of the disaster assistance package can be viewed on the House Agriculture Committee's web site at:
|Market Disruption Relief Sought Through Safeguard Petitions|
The National Council of Textile Organizations, with the support of 5 other US textile, apparel and fiber producing trade organizations, has filed threat-based China textile safeguard petitions on a number of product categories.
The first petitions, filed with the Committee on Implementation of Textile Agreements (CITA), covered cotton trousers, cotton knit shirts and blouses, man-made fiber knit shirts, man-made fiber trousers, and man-made fiber and cotton shirts. Department of Commerce Under Secretary Grant Aldonas said that CITA, an interagency group chaired by the Commerce Department, can consider petitions based on threat without altering any established procedures. The coalition announced more petitions covering additional categories were expected to be filed in the coming days.
The petitions are being filed to gain protection from what US textile and apparel interests consider to be a clear threat of market disruption Chinese imports once all remaining quotas are removed on Jan. 1, '05. The relief sought is authorized by the World Trade Organization accession agreement. Signed by China in ’01, the agreement contemplates safeguard action for the US and other countries based on the threat of disruption of orderly market development by Chinese imports.
“The U.S. textile and apparel manufacturers have been assured a fair hearing in the administrative process considering the petitions,” NCC Chairman Woody Anderson said.
The coalition also confirmed that petitions would be filed to request extension of the safeguards originally placed by the US government in December ’03 on the following categories: 1) cotton and man-made fiber dressing gowns and robes; 2) cotton and man-made fiber brassieres, and 3) knit fabric.
“The categories for which petitions have been filed and those expected in the near future are vitally important to maintaining a minimum critical mass for continued textile and apparel manufacturing in the U.S.,” said NCC Vice President G. Stephen Felker, a Georgia textile manufacturer. “The experience of the U.S. sector since 2002 when selected categories of textile and apparel products had quotas eliminated demonstrates the tremendous potential for surges in imports from China.”
NCC President/CEO Mark Lange said the safeguard actions previously taken by the administration were “a response to observed import behavior.” He noted that the United States currently manufactures about 45 million dozen cotton trousers annually but imports 63 million dozen from NAFTA and the CBI, mostly made with US components. China’s quota-restrained exports of cotton trousers to the US market are at a current level of 2.8 million dozen, but based on the experience in ’02, this total is expected to jump to 19.6 million dozen in the absence of safeguard action.
“This will come at the direct expense of U.S. manufacturers and hemispheric partners using U.S. components,” Lange said. “There is no need to wait for economic damage of this magnitude to occur. The agreement permits action based on the threat of market disruption.”
|FSA to Conduct CCR Seminar|
Merchants interested in learning how to use the USDA Farm Service Agency (FSA) Central Cotton Redemption (CCR) system should participate in a seminar in Memphis at the Shelby County Extension Service office, 5565 Shelby Oaks Dr., on Oct. 25 at 1 pm.
The CCR system is an optional electronic method for merchants to redeem upland cotton from loans disbursed by FSA county offices. This process provides the capability of redeeming bales selected from multiple loans in multiple counties in a single electronic transaction. Payment to the Commodity Credit Corp. (CCC) is made in a single wire transfer of funds based on a CCC electronic invoice for all bales selected by the merchant for redemption.
During the seminar, USDA-FSA staff will demonstrate how to use the CCR system and how to apply to participate. There is no advance registration to attend.
|USDA Projects Record US Cotton Crop|
USDA projected the US ’04-05 crop to reach 21.54 million bales, up 640,000 bales from the September report. Upland production was estimated at 20.83 million bales and ELS production at 715,000 bales. Harvested area was estimated at 13.22 million acres; implying non-harvested area of 540,000 acres based on USDA’s revised June acreage report. The resulting abandonment rate is roughly 4%. The national average yield per harvested acre was estimated to be 782 pounds, 115 pounds above the 5-year average.
US mill use was unchanged at 6.10 million bales and exports increased 100,000 bales to 12.30 million resulting in total offtake for ’04-05 of 18.40 million. Ending stocks for ’04-05 are projected to be 6.70 million bales for an ending stocks-to-use ratio of 36.4%.
By region, the Southeast crop is estimated at 4.24 million bales. In the Mid-South expected production is 6.37 million bales while the Southwest upland crop is an estimated 7.69 million bales. Upland production in the West is an estimated 2.53 million bales. The ELS crop is an estimated 715,000 bales.
|Sales, Shipments Steady|
Net export sales for the week ending Oct. 7, ’04 were 110,400 bales (480-lb.), resulting in total ’04-05 sales of almost 6.1 million. Total sales at the same point in the ’03-04 marketing year were about 4.2 million bales. Total new crop (’05-06) sales are 173,900 bales.
Shipments for the week were 95,300 bales, bringing total exports to date to 1.3 million bales, below the 1.5 million at the comparable point in the ’03-04 marketing year.
|World Cotton Production Estimate Raised|
For the ’04-05 marketing year, USDA projected world production of 109.67 million bales, up 2.42 million bales from the September report. World mill use was raised 550,000 bales from the September report to a projected 101.40 million bales. Consequently, world ending stocks for ’04-05 are projected to be 41.95 million bales, for a stocks-to-use ratio of 41.4%.
USDA’s October report also raised ’03-04 world production estimates 180,000 bales to 94.51 million bales. The beginning stocks estimate increased 130,000 to 36.74 million bales resulting in a world supply of 131.25 million. Estimated world mill use also increased 60,000 bales to 98.91 million. The projected world ending stocks on July 31, ’04 is now pegged at 33.48 million bales. This has a corresponding stocks-to-use ratio of 33.8%.
|NASS Releases ‘03 Cotton MYA Price|
USDA’s National Agricultural Statistics Service (NASS) announced that the Marketing Year Average (MYA) price for ‘03 upland cotton is 61.8 cents per pound. Under the current farm bill, the MYA price is used in the determination of the counter-cyclical payment (CCP). With a target price of 72.4 cents and a direct payment of 6.67 cents, the MYA price implies a total CCP rate of 3.93 cents. In October ’03, USDA issued an advance payment of 2.01 cents. For producers who took the advance payment, the final CCP installment will be 1.92 cents.
At press time, USDA had not issued a release confirming these payment rates. However, an announcement concerning the final ’03 CCP is expected any day. In addition, USDA will be announcing the advance CCP rate for ’04 cotton. In a letter to the Secretary, NCC has requested that the advance payment rate be set at the maximum of 4.81 cents.
|Prices Effective October 15-21, 2004|