Cotton's Week: May 5, 2006

Cotton's Week: May 5, 2006

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Supplemental Appropriations Bill Going to Conference

The Senate on a 77-21 vote on April 4 approved a $108.9 billion emergency supplemental appropriations bill, defying a Presidential veto threat. The legislation now goes to a conference committee, which will have the difficult task of resolving differences between the Senate and House version.

The Senate’s bill is significantly more than the $94.5 billion requested by the President and above the level which he has threatened a veto. It includes approximately $4 billion to provide disaster assistance to farmers who suffered weather-related losses in ’05, as well as a $100 million block grant for specialty crops and a 30% Direct Payment to assist farmers coping with dramatic increases in fuel, fertilizer and input costs.

The House leadership indicated they favored paring the bill down to the President’s request.

Secretary Johanns and the Administration have expressed opposition to the agriculture disaster provisions and some members of the House leadership have indicated there will need to be spending off-sets. However, a number of House members of both parties have introduced co-sponsored disaster assistance legislation, so there is stronger support than when the issue was considered at the end of ’05.



NCC Stands Behind Talent/Lincoln

The NCC offered thanks to Sens. Talent (R-MO) and Lincoln (D-AR) for their introduction of a bill that would extend the ’02 farm bill, scheduled to expire in ’07, until WTO global trading rules are in place (see 4/28 Cotton’s Week).

Johnny Hux, a Sikeston, MO, cotton producer, said, “Senator Talent knows that Missouri’s agriculture and rural economies make tremendous investments in order to produce food and fiber and move those products to market. Enacting an extension of the 2002 farm bill would reduce much of the uncertainty that plagues today’s farm economy, uncertainty that is exacerbated by domestic budget pressures, rising fuel and fertilizer costs, and uncertain international negotiations. The bi-partisan effort to support U.S. agriculture is encouraging and demonstrates leadership in reaching out to find like minded supporters.”

NCC Chairman Allen Helms expressed his appreciation for Sen. Lincoln and unwavering support for agriculture saying, “Senator Lincoln has again demonstrated bi-partisan leadership of the best kind in an effort to support U.S. agriculture during a period of increased economic uncertainty. While WTO trade negotiations have not demonstrated any momentum over the past two years, U.S. agriculture is being pressured by rising fuel and fertilizer costs and increased domestic budget pressures.”

The Clarkedale, AR, producer noted that Sen. Lincoln also joined with Agriculture Committee Chairman Chambliss (R-GA) to lead a successful bipartisan effort to defeat an amendment to significantly cut program benefits and undermine effective farm policy when prices are low and the safety net most important.

“Now she is joining Senator Talent to propose extending the 2002 farm bill to strengthen the hands of U.S. negotiators by communicating the intention of the U.S. to maintain effective policy as long as the rest of the world refuses to negotiate in good faith,” Helms stated.

The Talent-Lincoln legislation is co-sponsored by Sens. Bond (R-MO), Coleman (R-MN), Dorgan (D-ND), Landrieu (D-LA), Pryor (D-AR) and Vitter (R-LA).

“We appreciate and welcome their support and co-sponsorship of this important bill,” Helms said.


Helms Notes Chambliss’ Support

NCC Chairman Allen Helms thanked Sen. Chambliss (R-GA), chairman of the Agriculture, Forestry and Nutrition Committee, for his insightful comments concerning ongoing World Trade Organization trade negotiations and for his support of US negotiators in the face of continued grandstanding by the European Union.

“Senator Chambliss has steadfastly communicated that the aggressive U.S. proposal tabled last October is a package that links any reductions in domestic agricultural support to equivalent increases in market access,” Helms said.

Helms noted that, “The EU has never adequately responded to that proposal. Senator Chambliss has made it clear that by failing to table a meaningful offer on market access, the EU is jeopardizing the round. The U.S. should not provide unilateral concessions in these negotiations. All our trading partners need to make substantial commitments on a par with that tabled by the United States if they wish to achieve an agreement.”



Growers Testify at Farm Bill Hearing

Rep. Moran (R-KS), chairman of the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management Chairman, convened a field hearing in Coolidge, AZ, to review federal commodity programs. This was the Subcommittee's second in a series of hearings to review various aspects of the ’02 Farm Bill set to expire in September ’07.

Four Agriculture Committee members attended the hearing and heard from one panel of witnesses about a variety of farm policy issues including livestock programs, cotton, fruit and vegetable production, weather and water issues, land values, and crop insurance.

"There are certainly challenges in today's farming and ranching environment,” Chairman Moran said. “This dynamic environment is shaped by high input costs due to rising energy costs, more environmental regulation, and natural disasters that wreck havoc on crops, livestock, and property. Strong farm policy that provides a financial safety net in tough times is essential to our producers.”

At least 60 community members attended the hearing including local producers and agribusiness leaders. Among the witnesses were Thatcher cotton producer Dennis Palmer and Casa Grande cotton producers Paul Ollerton and Tom Isom, who is president, Arizona Cotton Growers Assoc.

Isom testified that, "The current farm bill has worked especially well for Arizona farmers, so we strongly support using current law as the basis for new farm legislation. We urge you to maintain an effective marketing loan without limitations; decoupled direct payments; and a counter-cyclical program for times when prices are low. It is especially important that payment limitations not be reduced further and that current eligibility requirements are maintained. We commend you and your colleagues for resisting the efforts to change the payment limitation provisions in current law."

He also stated that, "The cotton industry has been generally supportive of the Doha round, provided cotton is not singled out for unfair treatment and that meaningful increases in market access for our products can be achieved."

Isom took the opportunity to mention Arizona’s weevil free status and its: 1) successful initiation of a program to eradicate the pink bollworm, 2) being the first state to employ insect growth regulator chemicals to control one of the most devastating pests ever encountered - the silver leaf whitefly, and 3) spending of more than a million dollars to develop a method called AF36 to eliminate aflatoxin in its cotton seed.

He told the Congressional members that while a large percentage of these programs’ costs have been funded by Arizona growers, the federal government has provided critical cost share funds for the boll weevil and pink bollworm eradication projects as well as funding to USDA-ARS for the aflatoxin program.

“If any of your colleagues ever express doubts about the use of funds for research and eradication, we urge them to visit Arizona to see the results,” Isom said. “We are proud of our accomplishments because we are committed to producing a top quality product, while being good neighbors and stewards of the land.”

Witness testimony is available on the Committee website, http://agriculture.house.gov/hearings/index.html.



Farm Bill Hearing Set For Texas

Texas' farmers and ranchers are invited to attend a ’07 farm bill hearing in San Angelo Tuesday, May 9, at 8:30 am in the CJ Davidson Conference Center at AngeloStateU. The hearing is an opportunity for agriculture industry members to testify regarding federal agriculture policy.

Rep. Conaway (R-TX) will attend along with other members of the House Committee on Agriculture.

"I am pleased that Texas will have a direct voice in negotiating the 2007 Farm Bill," Conaway said. "San Angelo is the perfect place for those ideas and concerns to be heard as we look to advance the interests of American Agriculture. Texas' farmers and ranchers deserve a place at the table when it comes to the drafting of federal agriculture policy. It is important to receive knowledge and input from those who are affected first-hand by the policies crafted by their elected representatives."


’06 Bale Specs Approved

USDA has approved the ’06 specifications for cotton bale packaging materials forCommodity Credit Corp. loan program purposes. The published specifications, which were adopted earlier this year by the Joint Cotton Industry Bale Packaging Committee for ’05-crop cotton, also are intended for use as manufacturing guidelines.

The specifications can be found on the NCC web site’s Technical section at http://www.cotton.org/tech/bale/specs/index.cfm. The web site also contains an archive of Cotton Bale Packaging Materials specifications for the years ’00-05.

The specifications are designed to improve the quality and protection of US cotton bales and to improve the appearance and marketability of those bales in domestic and foreign markets.



Leadership Program Deadline Set

June 16 is the deadline for industry members to apply for the ’06-07 Cotton Leadership Class.

Those interested in applying for the class or nominating a fellow industry member are encouraged to visit http://leadership.cotton.org. The site contains program curriculum, eligibility requirements and a downloadable application. Applicants or nominators also may contact NCC’s Member Services at 901-274-9030 or your local Member Services Representative for additional information.

The Cotton Leadership Program, supported by a grant to The Cotton Foundation from DuPont Crop Protection, is geared to individuals who have the potential and desire to become leaders for the US cotton industry.



NCC Video Productions Net Honors

The NCC recently was recognized in The Videographer Awards 2006 competition for its “NCC Staff Report 2006” and “Prevent Lint Contamination” productions.

The staff report video garnered an “award of excellence” in the creativity/editing category as well as “award of distinction” honors in both the creativity/graphics/design and video productions/informational categories. The report received an honorable mention for creativity/use of music. Only 14% of the 2,327 entries from throughout the United States and foreign countries received an “award of excellence.” The NCC also received an honorable mention in the multi-media/interactive category for its “Prevent Lint Contamination” CD-ROM.

The Videographer Awards is an international awards organization that helps set the standards for the video production industry.



Sales Steady, Shipments Continue Strong

Net export sales for the week ending April 27 were 285,600 bales (480-lb). This brings total ’05-06 sales to about 16.2 million. Total sales at the same point in the ’04-05 marketing year were almost 13.8 million bales. Total new crop (’06-07) sales are 476,800 bales.

Shipments for the week were 434,700 bales, bringing total exports to date to 11.5 million bales, compared with the 9.2 million at the comparable point in the ’04-05 marketing year.

With a little more than three months remaining in the marketing year, weekly shipments must average roughly 407,400 bales to reach the USDA projection of 17.0 million bales.



Prices Effective May 5-11, 2006

Adjusted World Price, SLM 11/16

39.97 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

2.50 cents

Marketing Loan Gain Value

12.03 cents

Import Quotas Open

 1

Step 3 Quotas (480-lb. bales)

 113,839

ELS Payment Rate

 0.00 cents

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

55.38 cents

Forward 3135 c.i.f. Northern Europe

No Quote

Coarse Count c.i.f. Northern Europe

52.38 cents

Current US c.i.f. Northern Europe

57.88 cents

Forward US c.i.f. Northern Europe

64.25 cents

 
2005-06 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-March)

47.78 cents

**

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

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