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|Senate Panel Completes Budget Resolution|
The Senate Budget Committee completed work on the ’07 budget resolution, which does not include reconciliation instructions that would require the Agriculture Committee to develop legislation to modify current programs in order to achieve targeted savings. The only reconciliation instruction is a $3 billion target to the Energy and Natural Resources Committee, which could be met by opening the Artic National Wildlife Refuge to drilling.
In approving the FY07 budget resolution, the Senate Committee largely has ignored the Administration’s proposals to cut spending in agriculture programs through tighter payment limits and reduction in program payments.
Earlier, Agriculture Committee Chairman Chambliss (R-GA) and Ranking Member Harkin (D-IA) wrote the Budget Committee urging them not to include spending cuts for agriculture given recent increases in input costs, ongoing WTO negotiations and the fact that new farm legislation will be considered in ’07 when current law is scheduled to expire. Sen. Talent (R-MO) and Coleman (R-MN) were joined by 22 colleagues in a bipartisan letter which also urged the Budget Committee to forgo cuts in agriculture in the FY07 resolution.
The House Budget Committee postponed a Committee mark-up which had been scheduled for the week of March 6. By law, Congress should to complete work on the budget by April 15, but that deadline frequently has been missed in the past and entails no penalties.
|Disaster Relief Amendment Rejected|
The House Appropriations Committee approved a $91 billion FY06 emergency spending bill to fund ongoing military operations in Iraq and Afghanistan and for hurricane-affected states on the Gulf Coast. The legislation, similar to the President’s request, includes $19.1 billion in additional funds to support recovery efforts on the Gulf Coast.During the mark-up, the Committee rejected an amendment offered by Rep. Berry (D-AR) that would have provided approximately $4.2 billion in disaster and economic assistance for farmers and ranchers. The amendment was rejected on a vote that followed party lines with the exception of Rep. Emerson (R-MO) who supported Berry’s amendment.
|USDA Presents FY07 Budget Request|
Agriculture Secretary Johanns appeared before the Senate Appropriations Committee’s Agriculture Subcommittee to present USDA’s fiscal year FY07 budget request of $92.8 billion.
Johanns told the panel that the Administration’s proposal recognizes the need to reduce the deficit. The budget savings come primarily from the proposal to cut payments by 5% and reducing payment limits, eliminating the 3-entity rule and replacing marketing loan certificate redemptions with strict limits on LDPs and MLGs (see related Budget story). Most of the discussion focused on Japan’s continuing ban on US beef.
Under Secretary for Farm and Foreign Agricultural Services Dr. J.B. Penn appeared before the House Appropriations Committee’s Agriculture Subcommittee where he reviewed the budget proposals for FAS, FSA and the Risk Management Agency. Penn was accompanied by FSA Administrator Teresa Lasseter.Subcommittee Chairman Bonilla (R-TX) and all the members present pressed Secretary Penn and Administrator Lasseter for information on consolidation of FSA field operations. Members reiterated their concerns about last year’s “FSA Tomorrow” plan and Mrs. Lasseter assured them the agency has shelved the plan and has initiated a bottom-up process following guidelines outlined by Congress in the FY06 appropriations measure. She also told the subcommittee that state FSA directors have been asked to develop a plan that they believe will provide for delivery of services. She explained that each state will develop a plan that fits their needs and that there is not a national blueprint; state plans will be submitted to FSA for review; Congressional members will be briefed and local hearings will be conducted before plans are implemented.
|Shipments, Sales Continue Strong|
Net export sales for the week ending March 2 were 339,800 bales (480-lb). This brings total ’05-06 sales to approximately 13.5 million bales. Total sales at the same point in the ’04-05 marketing year were almost 11.4 million bales. Total new crop (’06-07) sales are 320,200 bales.Shipments for the week were 457,300 bales, bringing total exports to date to 7.8 million bales, compared with the 6.2 million bales at the comparable point in the ’04-05 marketing year.
|USDA Appointments Announced|
Secretary of Agriculture Mike Johanns announced the appointments of Ellen Terpstra as deputy under secretary for Farm and Foreign Agricultural Services and Michael Yost as administrator of the Foreign Agricultural Services (FAS).
Terpstra has served as FAS administrator since March ’02. She fills the position left vacant by the resignation of Dr. Jim Butler. Prior to joining USDA, Terpstra was CEO of the USA Rice Federation.
As Administrator of FAS, Terpstra was responsible for coordinating trade policy, administering market development programs – including those conducted by CCI – and supervising USDA’s 77 international offices. In her new position, Terpstra will be responsible for overseeing and coordinating all of USDA’s international programs.Yost has served as associate administrator of the Farm Service Agency since January ’04. He is a fourth generation farmer from Minnesota and has served as chairman of the American Soybean Assoc.
|JCIBPC OKs Plastic Strapping System|
The 39th annual meeting of the Joint Cotton Industry Bale Packaging Committee (JCIBPC) concluded with several significant actions.
Approval was granted for the HWJ P361 Plastic Strapping System. This system was approved for use with lift box style bale presses and allows the P361 weld to be formed and placed on the flat side of the bale.
Other actions included renewal of several experimental test programs and field trials for modified woven polypropylene (WPP) and cotton bale bagging. Additionally, as a condition of continued certification, the manufacturers of polyethylene (PE) film bags were instructed to participate in feasibility studies to help determine if PE film bags can be modified to allow moisture vapor transfer.
The committee added: (1) a clause in the specifications that clarified the color relationship between WPP tape and the required coating, (2) a section to the specifications for Automatically Applied Galvanized Wire and Polyester (Polyethylene Terephthalate) Plastic Strapping systems that ties together the machine and the wire or plastic strapping and (3) amended the packaging committee’s points of policy guidelines to require timely reporting of test results from companies with experimental test programs or field trials.
|Lower World Stocks Projected|
In its March report, USDA gauged US ’05-06 cotton production at 23.72 million bales. Mill use was unchanged at 5.90 million and exports were raised 400,000 bales to 16.80 million bales. The estimated total offtake now stands at 22.70 million bales, generating ending stocks of 6.60 million bales. The estimated ending stocks-to-use ratio is 29.1%.
USDA released ’06-07 projections during last month’s Agricultural Outlook Forum. US production is estimated to be 21.00 million bales for ’06-07. Mill use is set at 5.60 million bales while exports are reported to reach 17.00 million bales. The estimated total offtake stands at 22.60 million bales, resulting in ending stocks of 5.00 million bales.
In USDA’s March report, world production for the ’05-06 marketing year was estimated to be 113.34 million bales, down 410,000 bales from the February report. World mill use was lowered 640,000 bales to 116.15 million. Consequently, world ending stocks are estimated to be 53.28 million bales for a stocks-to-use ratio of 45.9%.
USDA released ’06-07 world projections during last month’s Agricultural Outlook Forum. World production is estimated to reach 117.00 million bales for ’06-07. Mill use is set at 122.50 million bales. World ending stocks are estimated to be 49.78 million bales for a stocks-to-use ratio of 40.6%.
|US Seeks FTA Talks with Malaysia|
The US wants to fast track free-trade talks with Malaysia and strike an agreement by year’s end.
US ambassador Christopher LaFleur said that despite concerns about Malaysia's reluctance to open its auto and banking sectors could become sticking points, he didn't anticipate any major problems in the negotiations.
"There will be some negotiating points that we have to work harder on than others but we wouldn't have agreed to move forward unless we had a fair degree of confidence that we would be successful at the end of the day," LaFleur said.
In noting that the United States was trying to expedite the free-trade agreement before the administration's “fast-track” authority expires on July 1, ’07, he said "we are hoping to move these negotiations on a fast track ... to provide Congress with sufficient time to consider the agreement before this authority expires, we will seek to conclude our negotiations by the end of this year.”
The ambassador said the agreement would help Malaysia, the United States' 10th largest trading partner, cement its most important economic relationship.
|Efforts to Resolve CAFTA Issues Continue|
Bush Administration officials arranged a conference call to report on efforts to resolve certain unintended consequences stemming from what has been termed “rolling implementation” of the DR-CAFTA agreement (see Feb. 24 CW).
Initially, it was assumed that implementation for all the DR-CAFTA countries would be simultaneous, which would allow all countries to move concurrently from Caribbean Basin Trade Preference Act (CBTPA) rules to DR-CAFTA rules. So far, however, CAFTA implementation has occurred only for El Salvador, and the result has been that some products made in El Salvador using components originating in another CAFTA country are considered ineligible for duty-free entry into the US market.The Administration has explored both administrative and legislative fixes, but no quick solution has yet been identified. Administration officials invited industry leaders to submit ideas and assured participants that every effort would be made to resolve the unintended consequences of non-concurrent implementation to accommodate the regional partnerships that have been forged in anticipation of DR-CAFTA approval.
|ACSA Increases COTTON USA Support|
The American Cotton Shippers Assoc. (ACSA) voted to increase its COTTON USA program contribution by $50,000. The additional funding brings the total direct ACSA support to $400,000.
ACSA members also contribute indirectly through NCC’s grant to CCI and through member sponsorships of major COTTON USA program events such as the Sourcing USA Summit. All contributions help CCI leverage its matching funds from USDA and other partners, resulting in an enhanced export promotion effort.
|Prices Effective March 10-16, 2006|