Cotton's Week: January 27, 2006

Cotton's Week: January 27, 2006

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Cottonseed Disaster Rules Released

USDA announced the rules and sign-up period for the ’04 crop cottonseed disaster assistance program.

Congress provided $10 million in disaster assistance for losses resulting from hurricanes Charley, Frances, Ivan and Jeanne. The funding was included in the ’05 Military Construction Appropriations and Emergency Hurricane Supplemental Appropriations Act.

The announcement by USDA follows prolonged discussions between the Office of Management and Budget (OMB) and USDA as well as public notice and comment in July ’05 concerning the administration of the program, which differs significantly from previous programs in spite of suggestions by industry and Congressional members. Industry and Congressional comments strongly supported a distribution system that placed minimal administrative burden on producers and ginners and would be based on previous cottonseed assistance programs. OMB insisted that the program be limited to losses in counties with a Presidential disaster declaration due to ’04 hurricanes and tropical storms.

Information for the ’04 Cottonseed Payment Program (CPP), including a fact-sheet, eligibility requirements, applications, instructions and a list of eligible counties, are available at http://www.fsa.usda.gov/dafp/psd/cottonseed.htm or by contacting local USDA Farm Service Agency offices.

First handlers of cottonseed, defined as gins that have eligible payment quantities, may apply for CPP funds. The eligible gins will calculate their payment quantity and submit the application to USDA. The quantity eligible for payment is based on losses by cotton producers in eligible counties due to hurricane or tropical storms. The loss determination is to be calculated on a producer-by-producer and farm-by-farm basis using producer certification, ginning records and other relevant information. The basis for calculating a producer’s losses is a comparison of lint deliveries in ’03 and ’04 for eligible farms to all gins. The difference is adjusted to reflect changes in planted acres on the eligible farms for ’03 and ’04.

To convert lint deliveries to cottonseed for calculating losses, the total weight of cotton lint converted to tons is multiplied by the Olympic average of the pounds of cottonseed per pound of ginned cotton lint as determined by USDA over the five years of ’99-’03. The payment rate will be calculated by dividing $10 million by the total eligible quantity but the payment per applicant (gin) may not exceed $114 per ton multiplied by the applicant’s eligible payment quantity.

Applications must be submitted within 60 days of Jan. 26 by fax to 202-690-1536 or by overnight mail to USDA/FSA/PSD, Attn:  Chris Kyer, 1400 Independence Ave., SW, Stop 0512-Room 4089, Washington, DC  20250-0512. For additional information, contact Chris Kyer at 202-720-7935 or by e-mail at chris.kyer@wdc.usda.gov.



USDA Urged to Begin CSP Signup

Senate Agriculture Chairman Chambliss (R-GA) and ranking member Harkin (D-IA) have written Agriculture Secretary Johanns to encourage USDA to begin a sign-up for the Conservation Security Program (CSP) in the next few weeks.

According to the letter, USDA’s Natural Resources Conservation Service is prepared to begin enrollment but is being prohibited from starting signup by the Office of Management and Budget. The letter explains that in order to fairly evaluate the benefits of the CSP in preparation for the ’07 farm bill, the Committee wants the CSP implemented to the maximum extent possible and that further delays in signup only will serve to deter farmers and ranchers from participating.


Farm Bill Field Hearings Set

House Agriculture Committee Chairman Goodlatte (R-VA) has scheduled initial field hearings on reauthorization of farm law. Current farm law expires in ’07.

The hearings will cover commodity programs, conservation, trade, nutrition, rural development, research, forestry, energy and other areas including biotechnology. The initial hearings are scheduled as follows:  Monday, Feb. 6, at 1 pm at the Crown Expo Center, Section A, 1960 Coliseum Dr., Fayetteville, NC; and Tuesday, Feb. 7, at 10 am at the Foy Union Ballroom at Auburn U., Auburn, AL.



WTO Talks Continue in Geneva

Talks in Geneva following the December World Trade Organization Hong Kong ministerial meeting have not produced much progress.

The chairman of the agricultural negotiations, Crawford Falconer, indicated he will circulate questions to members in advance of the next round of negotiations scheduled for the week of Feb. 13. An extensive number of technical issues within the three pillars of market access, domestic support and removal of export subsidies are unresolved. Talks in areas of services and non-agricultural market access also are moving slowly.

The European Union (EU) continues to hold to its position on agricultural market access. EU Trade Commissioner Peter Mandelson said, “If the European Union walked away from this trade round now, and we don’t intend to, we would lose next to nothing because economically we have been given nothing by our trading partners.



Buchanan Nominated for Under Secretary Post

President Bush has announced the nomination of Dr. Gale A. Buchanan to serve as Under Secretary of Agriculture for Research, Education and Economics. Buchanan is dean and director emeritus at the College of Agricultural and Environmental Sciences at the U. of Georgia.

President Bush also nominated James Gulliford to be assistant administrator for the Office of Prevention, Pesticides and Toxic Substances at EPA. Gulliford has been administrator of EPA’s Region 7 since ’01. Prior to joining EPA, he directed Iowa’s Dept. of Soil Conservation.



Bayer CropScience to Support PIE

Bayer CropScience is the now the sponsor of The Cotton Foundation’s Producer Information Exchange (P.I.E.) Program.

The program, which conducts annual tours in the Cotton Belt’s four production regions, enables producers to observe cotton production and talk to their peers from different regions about what works and doesn’t work. The program’s overall goal is to help participants increase profitability through:  learning new farming techniques; gaining a better understanding of new technologies designed to improve efficiency; reducing production costs; and enhancing fiber quality. In addition, participants gain a better understanding of the important role that Cotton Foundation members play in fostering a healthy US cotton industry.

Since its inception in ’89, this unique educational program has exposed more than 700 US cotton producers to innovative production practices.

“The P.I.E. combines learning and camaraderie and has fostered the adoption of proven farming methods across the Cotton Belt,” said Cotton Foundation President Craig Shook of Corpus Christi, TX. “This program is succeeding by helping U.S. cotton producers increase their efficiency and their competitiveness in the global marketplace. Another important dividend is that because participants gain a better understanding of each other’s regional goals, challenges and needs they are inclined to work together through the National Cotton Council toward common goals for the mutual benefit of the U.S. cotton industry.”

The NCC’s Member Services staff, in conjunction with local producer associations and Bayer CropScience, conducts the program.



Mill Cotton Use Down

According to the Commerce Dept., December (5-week month) total cotton consumption in domestic mills was 215.6 million pounds for a seasonally adjusted annualized rate of 5.42 million bales (480-lb). Last year’s December annualized rate was 6.23 million bales. The November (4-week month) estimate of domestic mill use of cotton was lowered by 7.5 million pounds to 207.3 million. The revised seasonally adjusted annualized rate of consumption for November is 5.72 million bales. This is lower than last year’s November annualized rate of 6.26 million bales.

Using the latest figures from Commerce, calendar ’05 mill use is estimated to be 2.92 billion pounds or 6.08 million bales. This is lower than calendar year ’04’s use of 6.25 million bales.

Based on Commerce estimates from Aug. 1-Dec. 31, ’05, projected total pounds consumed during the ’05-06 crop year would be 2.8 billion pounds or 5.83 million bales.  USDA’s latest estimate of ’05-06 crop year mill use is 6.00 million bales. Preliminary January domestic mill use of cotton and revised December figures will be released by Commerce on Feb. 23.



Sales, Shipments Keep Healthy Pace

Net export sales for the week ending Jan. 19 were 293,100 bales (480-lb). This brings total ’05-06 sales to almost 11.3 million. Total sales at the same point in the ’04-05 marketing year were about 9.7 million bales. Total new crop (’06-07) sales are 215,600 bales.

Shipments for the week were 253,600 bales, bringing total exports to date to 5.5 million bales, compared with the 4.3 million at the comparable point in the ’04-05 marketing year.



CCI Successful at Colombiatex Event

Cotton Council International’s COTTON USA Sourcing Program connected 12 US textile mills with international buyers at the 18th annual Colombiatex in Medellin, Colombia.

The mills were able to display their cotton-rich yarn and fabrics at the event, which attracts an average of 1,500 international buyers and 420 exhibitors.

Participating US mills included: Alice Mills Inc., Buhler Quality Yarns Corp, Cheraw Yarn Mills, Clovertex, Frontier Spinning Mills, National Textiles, Parkdale, R.L. Stowe Mills Inc., Ramtex, Swift Spinning, Tuscarora Yarns Inc. and Wellstone Mills.

CCI and Cotton Incorporated’s US cotton pavilion and the COTTON USA Sourcing Program’s VIP business center also promoted the benefits of US cotton and value-added cotton products while facilitating business opportunities.

In addition to participation from some of the largest textile mills from North America and South America, Colombiatex also attracted key South American cotton consumers such as Textiles Rio Blanco (Ecuador) and Coltejer and Fabricato-Tejicondor (Colombia), establishing the textile show as one of the most important in Latin America.



Prices Effective Jan. 27-Feb. 2, '06

Adjusted World Price, SLM 11/16

44.52 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

2.69 cents

Marketing Loan Gain Value

7.48 cents

Import Quotas Open

 0

Step 3 Quotas (480-lb. bales)

 0

ELS Payment Rate

0.00 cents

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

59.96 cents

Forward 3135 c.i.f. Northern Europe

No Quote

Coarse Count c.i.f. Northern Europe

58.13 cents

Current US c.i.f. Northern Europe

62.65 cents

Forward US c.i.f. Northern Europe

No Quote

 
2005-06 Weighted Marketing-Year Average Farm Price  
 
Year-to-date (August-November)

46.26 cents

**

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

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