Cotton's Week: November 4, 2005

Cotton's Week: November 4, 2005

phytogen

NCC Grateful for Senators’ Payment Limitations Opposition

NCC Chairman Woods Eastland expressed appreciation to Sens. Chambliss (R-GA), Lincoln (D-AR), Talent (R-MO), Cochran (R-MS), Pryor (D-AR) and their bi-partisan coalition of Senators from across the country who successfully prevented a damaging and divisive amendment to change current payment limitations on farm programs from being added to the Senate’s budget reconciliation legislation.

The NCC and virtually every commodity and farm organization had urged rejection of the Grassley-Dorgan amendment, which was defeated by the Senate on a procedural vote.

“The proponents of this amendment are apparently determined to drive a wedge between different segments of agriculture,” Eastland said. “It is especially unfortunate that organizations supporting the amendment misled farmers and the public by asserting that the change would benefit family farmers, when in fact there were no provisions to increase investment in family farms or in the production of food and fiber.”

Eastland said, “in fact, the unintended result could have been to dramatically reduce participation in conservation programs as farmers and rural businesses would have struggled to make ends meet in the absence of an effective safety net while costs escalate. USDA would have been hard pressed to implement and administer the new requirements without imposing costly requirements on farmers and disrupting orderly marketing decisions.”

Eastland also stated that, “as U.S. producers face energy costs that have more than doubled and as the United States faces a critical juncture in international trade negotiations, we can ill-afford damaging changes in payment limitations that will undermine the effectiveness of the 2002 farm bill. Chairman Chambliss and the Senate Agriculture Committee developed a set of budget savings that are equitable and ensure the 2002 farm bill continues to be effective for production agriculture. The proposed payment limit amendment discriminates among different sized agricultural operations, changing the field of competition in the United States to the detriment of southern agriculture. We are pleased with the Senate’s actions and urge the House of Representatives and the Conference Committee to reject any similar amendments.”



House Panel Approves Budget Package

The House Budget Committee approved a reconciliation package, which includes $53.9 billion in budget cuts. The package combines the work of various House authorizing committees that were required by the Budget Resolution to finding savings in programs under their jurisdiction. The House Agriculture Committee earlier approved its part of the package (see 10/28 Cotton’s Week) which would reduce spending on commodity, conservation, nutrition and research programs by $3.7 billion. The legislation likely will be considered by the House the week of Nov. 7.

Democrats are expected to oppose the legislation, and Democratic leader Rep. Pelosi (D-CA) confirmed that she expects 100% opposition by Democrats. Republican leaders will be challenged to round-up the necessary votes to pass the package. It is likely some modifications will be made to secure the necessary votes prior to House consideration.


Senate Approves FY06 Ag Appropriations

By a vote of 81-18, the Senate approved the FY06 agriculture appropriations bill. The action follows approval by the House and clears the measure for the President’s signature.

The legislation provides funding for USDA programs and operations for FY06. The conference report includes a 2-year delay of the implementation of a mandatory country-of-origin labeling program for meat and meat products. The legislation provides funding for a number of highly important cotton research programs, as well as for the Boll Weevil and Pink Bollworm Eradication programs, which are funded at $39 million and $5.2 million, respectively.



Portman Seeking Doha Round Support

USTR Ambassador Portman will begin a 10-day trip to Europe, Africa, India, China and South Korea Nov. 6 in an effort to generate support for the Doha Round trade negotiation.

“We have 40 days now before the Hong Kong ministerial,” Portman said, “and I intend to do everything to maximize the possibility of having a successful …meeting….We need to redouble our efforts over the next couple of weeks…”

Agriculture Secretary Johanns also will participate in the meetings in Europe and will travel to W. Africa with Amb. Portman.

During an appearance before the House Agriculture Committee, Amb. Portman and Secretary Johanns responded to numerous questions about the recent US proposal on agriculture. Reps. Neugebauer (R-TX) and Conaway (R-TX) asked the Administration officials about their objectives in visiting W. Africa cotton producing nations and urged Amb. Portman to focus more attention on increased market access for cotton exports to China.



Trade Sessions Held with Administration

NCC Chairman Woods Eastland, accompanied by NCC President/CEO Mark Lange and NCC Senior Vice President John Maguire, met in separate sessions with USDA and USTR officials to discuss the calendar of meetings leading up to the December World Trade Organization (WTO) ministerial session in Hong Kong. USDA Secretary Johanns will travel with USTR Amb. Portman to Europe and Africa the week of Nov. 6.

Officials briefed NCC representatives on the latest US proposal on market access and domestic support. The potential for problems arising from unrealistic expectations on the part of some developing countries associated with the WTO special cotton subcommittee was discussed.

Administration officials noted the firm US position that agriculture negotiations would be a single undertaking and cotton would not be treated separately. The retaliation procedures in the WTO Brazil cotton case were outlined and US officials reported that Brazilian authorities have acknowledged the significant move on the part of the US Senate to end Step 2 effective Aug. 1, ’06.


No US–China Textile Pact Reached

The latest round of talks with the Chinese aimed at reaching a comprehensive agreement on textiles took place in Washington. According to a statement by David Spooner, the US Trade Representative Office’s Special Textile Negotiator, substantial progress was made on a large number of issues, but an agreement with China was not reached. A location and time for the next round of talks has not been announced.

However, the USTR Office and People's Republic of China Ministry of Commerce signed an agreement on Chinese sock imports. The agreement puts in place a new quota of slightly more than 10 million dozen pairs on imports of Chinese cotton, wool and man-made fiber socks (categories 332, 432, and part of 632). The agreement permits the Committee for the Implementation of Textile Agreements (CITA) to delay action until the end of December on a sock industry request to renew a year-long sock safeguard quota that expired last week while the Administration continues with negotiations on a broad textile agreement with China. If CITA had invoked the sock safeguard on Nov. 1, Chinese sock imports for the next 12 months would have been limited to slightly more than 61 million dozen pairs.



FSA County Elections Begin

Agriculture Secretary Mike Johanns announced the election period for USDA Farm Service Agency (FSA) county committees began and is open through Dec. 5, ’05, as ballots to eligible producers are mailed on Nov. 4.

“County committees help administer federal farm programs at the local level and it is vital that committees represent a cross-section of producers in each community,” said Johanns. “I encourage all eligible producers, especially minorities and women, to make a difference in their community by voting in this year’s FSA county committee elections.”

Agricultural producers, who participate or cooperate in any FSA program and are of legal voting age, can vote. A person supervising and conducting the farming operations on an entire farm, but not of legal voting age, also can vote. Ballots are being sent to eligible farmers, ranchers and other agricultural producers. Eligible producers should contact their local FSA offices if they do not receive a ballot. All ballots must be returned to the voter’s FSA office or be post-marked by Dec. 5. The candidate receiving the most votes serves a 3-year term as the elected county committee member. The person receiving the second most votes serves a 3-year term as the first alternate. The candidate receiving the third most votes serves as second alternate for 3 years.

About one-third of the nearly 8,000 committee seats nationwide are up for election annually. Newly elected committee members and alternates take office Jan. 1, ’06. Producers can learn more about FSA county committees by contacting a local FSA office or online at http://www.fsa.usda.gov/pas/.



Pink Bollworm Eradication Phase II Set

NCC’s Pink Bollworm Action Committee (PBAC), chaired by Tornillo, TX, producer Bill Lovelady, finalized ’06 plans to initiate Phase II of the 3-phase program.

With funding approved at $5.22 million for FY06, the PBAC, meeting in Maricopa, AZ, adopted a plan to release about 22 million sterile pink bollworm moths per day on 890,000 acres. Release acres include 550,000 in the San Joaquin Valley, 78,000 in original Phase I (Trans Pecos/El Paso, New Mexico and Juarez, Mexico) and proposed new Phase II programs on about 200,000 acres in eastern and central Arizona (pending local approval) and 70,000 acres in Chihuahua, Mexico. Programs report excellent progress following the first year of sterile moth releases in Phase I.

The PBAC also agreed to coordinate with USDA-APHIS to establish an oversight or advisory committee to provide coordination between the pink bollworm rearing facility in Phoenix, the San JoaquinValley program, and eradication programs in Texas, New Mexico, Arizona and Mexico.



Texas Zone Votes for Eradication

The Texas Dept. of Agriculture released results of a producer referendum to continue the Boll Weevil Eradication Program in the S. Texas/Winter Garden Boll Weevil Eradication Zone. The referendum passed with 86.28% voting for the continuation of the eradication program. Of 1,057 valid ballots, 912 voted to continue the boll weevil program.

The referendum also re-elected Mark Morris as the Texas Boll Weevil Eradication Foundation board member to represent the zone on the statewide board.


CCI Conducts Fiber Education Tour

The inaugural COTTON USA “Fiber Education Tour” will be in the US Cotton Belt Nov. 6-12.The tour, sponsored by Cotton Council International, is designed to better inform retailer and trading companies in Japan about the COTTON USA Mark program and the benefits of US cotton fiber in finished apparel.

Participants will visit Cotton Incorporated’s headquarters and research facilities in Cary, NC; NCC headquarters in Memphis; and will see harvesting as well as ginning and classing facilities in California.

Participants include the following top retailers and trading companies in Japan: Uniqlo Co.; Sumitomo Corp.; Itochu Corp.; Uny Co.; Jusco Co.; AIC Co.; Mycal Corp.; Nichimen Infinity Inc.; and Akachan Honpo Co. The group represents organizations with a combined annual turnover of more than $300 billion.


Sales, Shipments Rebound

Net export sales for the week ending Oct. 27 were 284,700 bales (480-lb). This brings total ’05-06 sales to about 7.4 million. Total sales at the same point in the ’04-05 marketing year were about 6.5 million bales. Total new crop (’06-07) sales are 165,800 bales.

Shipments for the week were 146,700 bales, bringing total exports to date to 2.8 million bales, compared with the 1.6 million bales at the comparable point in the ’04-05 marketing year.



Prices Effective November 4-10, 2005

Adjusted World Price, SLM 11/16

41.99 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

3.48 cents

Marketing Loan Gain Value

10.01 cents

Import Quotas Open

 0

Step 3 Quotas (480-lb. bales)

 0

ELS Payment Rate

15.96 cents

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

57.47 cents

Forward 3135 c.i.f. Northern Europe

No Quote

Coarse Count c.i.f. Northern Europe

55.10 cents

Current US c.i.f. Northern Europe

60.95 cents

Forward US c.i.f. Northern Europe

 No Quote`

 
2004-05 Weighted Marketing-Year Average Farm Price  
 
Final Marketing-Year Average Price

41.60 cents

 


Sponsored by
Dow AgroSciences