Cotton's Week: January 28, 2005

Cotton's Week: January 28, 2005

phytogen

NCC Sees 13.73 Million Cotton Acres in ’05

US cotton producers intend to plant 13.73 million acres of cotton this spring, up 0.6% from ’04, according to the NCC’s 22nd Annual Early Season Planting Intentions Survey.

Upland cotton intentions are 13.48 million acres, an increase of 0.5% from ’04 plantings of 13.41 million acres. Extra long staple (ELS) intentions of 255,000 acres represent a 2.3% increase from ’04. The results were announced at the NCC’s Annual Meeting in Washington, DC. With average abandonment, total upland and ELS harvested area would be about 12.35 million acres. Applying each state’s trend yield to its ’05 projected harvested acres generates a crop of 18.86 million bales, 18.16 million of upland cotton and 691,000 of ELS cotton. This compares to ’04 total production of 23.01 million bales, according to USDA’s January ’05 estimate. Cottonseed production for ’05 is projected at 6.85 million tons, down from 8.41 million last year.

The NCC survey was mailed in mid-December to about one-third of the producers across the 17-state Cotton Belt.

Dr. Stephen Slinsky, the NCC’s senior economist, said the market conditions growers face as they consider their ’05 planting decisions are very different from last year, when prices for cotton, corn and soybeans were substantially higher than the loan value.

“As with every year, final acreage allocations will be heavily influenced by expected returns of cotton and competing crops,” Slinsky noted. “However, this year producers are paying special attention to agronomic considerations such as disease management and soil moisture conditions.”

Prospective 2005 U.S. Cotton Crop

 

 2004 Actual (Thou.)  1/

 2005 Intended (Thou.)  2/

Percent Change

 

 

 

 

SOUTHEAST

2,956 

2,862 

-3.2% 

  Alabama

550 

530 

-3.6% 

  Florida

89 

84 

-6.1% 

  Georgia

1,290 

1,268 

-1.7% 

  North Carolina

730 

702 

-3.9% 

  South Carolina

215 

201 

-6.3% 

  Virginia

82 

78 

-5.3% 

 

 

 

 

MID-SOUTH

3,430 

3,664 

6.8% 

  Arkansas

910 

926 

1.7% 

  Louisiana

500 

576 

15.3% 

  Mississippi

1,110 

1,199 

8.1% 

  Missouri

380 

418 

10.0% 

  Tennessee

530 

544 

2.7% 

 

 

 

 

SOUTHWEST

6,155 

6,183 

0.5% 

  Kansas

85 

95 

11.9% 

  Oklahoma

220 

235 

6.9% 

  Texas

5,850 

5,852 

0.0% 

 

 

 

 

WEST

868 

770 

-11.3% 

  Arizona

240 

214 

-10.7% 

  California

560 

478 

-14.7% 

  New Mexico

68 

78 

15.1% 

 

 

 

 

TOTAL UPLAND

13,409 

13,479 

0.5% 

 

 

 

 

TOTAL ELS

250 

255 

2.3% 

  Arizona

8.2% 

  California

215 

223 

3.6% 

  New Mexico

11 

10 

-6.8% 

  Texas

21 

20 

-6.3% 

 

 

 

 

ALL COTTON

13,659 

13,734 

0.6% 

 

 

 

 

1/ USDA-NASS

 

 

 

2/ National Cotton Council

 

 





House Ag Panel Gets New Members

House Agriculture Committee Chairman Goodlatte (R-VA) welcomed 6 new majority and 5 new minority Members to that panel. New majority Members include Republicans Charles W. Boustany, Jr., LA; John J.H. "Joe" Schwarz, MI; John R. "Randy" Kuhl, Jr., NY; Virginia Foxx, NC; K. Michael Conaway, TX; and Jeff Fortenberry, NE. New minority Members include Democrats Henry Cuellar, TX; Charlie Melancon, LA; Jim Costa, CA; John T. Salazar, CO and John Barrow, GA.

They join current Republican Members: Vice Chairman Boehner, OH; Pombo, CA; Everett, AL; Lucas, OK; Moran, KS; Jenkins, TN; Gutknecht, MN; Hayes, NC; Johnson, IL; Osborne, NE; Pence, IN; Graves, MO; Bonner, AL; Rogers, AL; King, IA; Musgrave, CO; Nunes, CA; and Neugebauer, TX; and current Democrat Members: Peterson, MN (ranking minority Member); Holden, PA; Thompson, MS; McIntyre, NC; Etheridge, NC; Baca, CA; Case, HI; Cardoza, CA; Scott, GA; Marshall, GA; Herseth, SD; and Butterfield. There are 4 vacancies on the minority.





Justice Will Appeal Safeguard Injunction

The Justice Dept. will appeal a preliminary injunction issued last month by the Court of International Trade (CIT) that prevented further action on a series of petitions seeking import restraints on Chinese textiles and apparel.

A notice of appeal was filed with the US Court of Appeals for the Federal Circuit on Jan. 25 Justice spokesman Charles Miller, said. The actual appeal was expected to be filed within a few days.  The appeal, if successful, would allow the Committee for the Implementation of Textile Agreements (CITA), an interagency group chaired by the Department of Commerce, to resume consideration of 12 petitions filed by the US textile industry last fall. Those petitions urged the Bush administration to use a special China textile safeguard to limit imports of certain textile and apparel products from China in early ’05, based on the threat that those imports would surge once US textile and apparel quotas were removed Jan. 1, ’05.

The 12 so-called "threat-based" petitions were strongly opposed by apparel importers. The US Association of Importers of Textiles and Apparel (USA-ITA) filed a lawsuit Dec. 1 alleging that CITA's acceptance of the threat-based cases violated the Administrative Procedures Act and USA-ITA's due process rights, and asked for a preliminary injunction barring further action on the petitions. That injunction was granted Dec. 30.

It is unclear when a decision on the appeal will be made. US textile industry representatives hope the preliminary injunction will be lifted within a month, which could allow decisions on the safeguards to be made by early March.





GAFTT Holds 3rd Summit

The Global Alliance for Fair Textile Trade (GAFTT) held a summit Jan. 26 in Washington, DC, to urge the Bush administration to utilize its textile safeguard authority. The group, which includes 96 textile and apparel trade associations from 54 countries, is also pressing for a permanent mechanism at the WTO to prevent the monopolization of the textile and apparel trade by countries such as China. The China textile safeguard expires at the end of ’08.

GAFTT includes several US and European textile trade associations as well as many from developing countries that fear Chinese textile and apparel exports to the United States will surge and take market share from them.

Several GAFTT members said during a press conference they were already experiencing the impact of the removal of quotas. Paul Ryberg, president of the African Coalition for Trade, said the recent growth in apparel exports from sub-Saharan Africa to the United States, spurred by the African Growth and Opportunity Act (AGOA), has slowed dramatically and the jobs created by AGOA are beginning to be lost. Some factories in Mauritius already have begun to lay off workers, he said.





Textile Alliance Agrees to ’05 Platform

NCC joined with NCTO and several other textile, fiber and labor organizations in support of a “Platform” for ’05 that calls for actions to strengthen domestic manufacturing and preserve American jobs. The platform calls on all elected officials to: 1) COMMIT to the continuation of WTO consistent quota restraints on Chinese imports of textiles and apparel; either through the aggressive use of special textile China safeguards or through a comprehensive bilateral agreement with China; 2) SUPPORT efforts of the GAFTT to raise this issue’s awareness within the WTO and promote initiatives within the WTO to prevent dominance of the global textile and apparel markets by any countries, especially those that use unfair trade practices to gain market share; 3) SUPPORT enhancements to an extension of the Berry Amendment and other federal buy-American purchase requirements; 4) OPPOSE free trade agreements that contain unnecessary loopholes to the requirement to use signatory fiber, yarn, thread, fabric, and fabric dyeing, finishing, and printing; 5) OPPOSE any reduction of US textile and apparel tariffs through the WTO and any weakening of US trade laws regarding unfair trade practices; and 6) SUPPORT full enforcement of US trade laws to aggressively address illegal trade activities and remedy violation.

Under Secretary of Commerce for International Trade Grant Aldonas addressed the Alliance and told the group that the Department was taking steps to speed up its ability to monitor the rate of textile imports. When fully implemented, he expects the new procedure to permit gross import data to be available for review within 2 weeks, compared with 6 weeks currently. This expected improvement gives the industry encouragement that safeguard petitions can be filed and a CITA response be issued before excessive market damage occurs.





Standards Panel Members Named

Agriculture Secretary Mike Johanns announced the appointment of 24 members and 11 alternate members to the Advisory Committee on Universal Cotton Standards. The panel, re-established by a charter issued on Aug. 6, ’04 for the charter’s 2-year period, is represented by merchants, manufacturers, ginners and producers. 

The members and alternates will serve. The appointed members are MERCHANTS: James A. Wade, Montgomery, AL; Claud A. Acker, Bakersfield, CA;  Edward L. Pell, IV, Fresno, CA; Jeff A. Johnson, Cordova, TN; John D. Mitchell, Memphis, TN; and Lonnie D. Winters, Lubbock, Texas; MANUFACTURERS: Billy R. Henderson, Trion, GA; William E. Bowen, Jr., Inman, SC; John B. Cleveland, II, Easley, SC; John T. Hill, Lancaster, SC; Sidney T. Attaway, Greenville, SC; and Mark K. Tapp, Danville, VA; GINNERS: Russell L. Kuhnhenn, Buckeye, AZ; Larry McClendon, Marianna, AR; Van F. Murphy, Quitman, GA; and Thomas S. Brough, Edroy, TX; PRODUCERS: Steven E. Bales, Jr., Buckeye, AZ; Thad R. Freeland, Tillar, AR; Donald J. Cameron, Fresno, CA; Jones O. Thomas, Dixie, GA; Kenneth B. Hood, Gunnison, MS; Henry A. McLaurin, Laurinberg, NC; Craig D. Shook, Corpus Christi, TX; and Jackie L. Burris, Wellman, TX.

The alternate members are MERCHANTS:  Thomas J. Lea, Greenville, SC; Edward J. Hanslik, Austin, TX; and Bill H. Adams, Dallas, TX; MANUFACTURERS: Eugene C. Frye, Belmont, NC; and Vern C. Tyson, Jr., Winston-Salem, NC; GINNERS:  Charles C. Owen, Sr., Pima, AZ; and Joe D. Blakemore, Campbell, MO; PRODUCERS:  Norman L. Clark, Dos Palos, CA; Willie T. Brown, Yazoo City, MS; Robert D. Robbins, Altus, OK; and Lawrence S. Ulmer, Sullivan's Island, SC.

The Committee will review the American Upland Cotton Standards and make recommendations to USDA's Agricultural Marketing Service concerning establishment and revision of the standards.





December Consumption More Than Year Ago

According to the Commerce Dept., December (5-week month) total cotton consumption in domestic mills was a seasonally adjusted annualized rate of 6.46 million (480-lb) bales. Dec. ’03 annualized rate was 6.17 million bales to the revised seasonally adjusted annualized rate of consumption for November is 6.38 million bales, slightly higher than the Nov. ’03 annualized rate of 6.32 million.

Using the latest Commerce figures, calendar ’04 mill use is estimated to be 6.30 million bales, compared with calendar year ’03 use of 6.82 million.

Based on Commerce estimates from Aug. 1, ’04, through Jan. 1, ’05, projected consumption for crop year ’04-05 would be 6.24 million bales. USDA’s latest estimate of ’04-05 crop year mill use is 6.2 million bales. Preliminary January domestic mill use of cotton and revised December figures will be released by Commerce on Feb. 24.





Sales, Shipments Strong

Net export sales for the weeks ending Jan. 13 and Jan. 20 were 355,400 bales (480-lb.) and 270,100 bales, respectively. This brings total ‘04-05 sales to more than 9.72 million. Total sales at the same point in the ’03-04 marketing year were about 9.71 million. Total new crop (’05-06) sales are 350,300 bales.

Shipments for the weeks of Jan. 13 and Jan. 20 were 306,400 bales and 272,700 bales, respectively, bringing total exports to date to 4.3 million bales, compared with the 4.7 million at the comparable point in the ’03-04 marketing year.





Prices Effective January 28 - February 3, 2005

Adjusted World Price, SLM 1 1/16

37.22 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

 3.85 cents

Marketing Loan Gain Value

 14.78 cents

Import Quotas Open

 2

Step 3 Quotas (480-lb. bales)

 245,504

ELS Payment Rate

58.08 cents

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

52.30 cents

Forward 3135 c.i.f. Northern Europe

No Quote

Coarse Count c.i.f. Northern Europe

49.77 cents

Current US c.i.f. Northern Europe

56.15 cents

Forward US c.i.f. Northern Europe

No Quote

 
2004-05 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-November)

48.94 cents

**

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



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