Cotton's Week: June 16, 2006

NCC Chairman Allen Helms was part of a group of leaders representing 11 US farm and commodity organizations who met with World Trade Organization (WTO) Director General Pascal Lamy to convey the message that US agriculture supports the Doha negotiations but will not support an agreement that does not result in market access gains commensurate with US objectives. The NCC earlier had joined with these organizations on a letter to President Bush outlining their concerns with the negotiations. (see 6/2 Cotton’s Week).

Helms said Lamy had seen the June 1 letter that US farm organizations sent to President Bush, urging the administration not to make any more concessions in the WTO Doha Round.

“The U.S. has tabled a very ambitious offer on domestic support and market access,” Helms said. “Reductions in domestic support for U.S. agriculture are only acceptable if the negotiations yield an important net gain in market access for U.S. farmers and ranchers.”

 In the meeting with Lamy, the farm organizations explained that the US offer to reduce domestic supports is contingent on significant gains in market access and that current offers do not nearly achieve US objectives. The leaders said they were disappointed with offers on access saying they fall short of US objectives even before application of special and sensitive products would further erode the US offer. They explained that the US should reduce or withdraw the offer if objectives are not met.

Similar messages from Senate Agriculture Committee Chairmen Chambliss (R-GA) and House Agriculture Committee Chairman Goodlatte (R-VA) were conveyed to Lamy during his visit to Washington. In a statement following the meeting, Goodlatte noted that while other nations enjoy open access to US markets, American agriculture does not enjoy the same access in export markets around the world.

“Our producers face steep worldwide agricultural tariffs, currently averaging 62 percent,” Goodlatte said. “Meanwhile, U.S. agricultural tariffs average 12 percent, ranking the United States among the lowest agricultural tariff structures in the world.”

Goodlatte said the United States will continue to seek access to markets for its producers and to reduce trade barriers to US products.

“We will not unilaterally disarm,” he noted. “Fair trade involves all parties participating equally, and, at this point, we will need to see a more aggressive effort from our trading partners.”

“Earlier this year, members of the WTO called on the United States to make an ambitious and forthcoming proposal, and the U.S. answered that call,” Goodlatte noted. “No other country has introduced a proposal that even comes close to the U.S. proposal. Now, we are being called on to give even more and receive less.

“I conveyed to the Director General in no uncertain terms that this is not an option. There is absolutely no support in the Congress for further concessions on our part. We have yet to see strong action on the part of other WTO members, such as the EU, and we will not accept an agreement that benefits our international trading partners by putting our producers at a disadvantage.”

Sen. Chambliss told reporters before meeting Lamy that US lawmakers felt no pressure to get a deal under the Doha round of the current WTO talks.

"I think right now it's pretty obvious the European Union doesn't want an agreement on their side," he said.

New US Trade Representative Susan Schwab, who met Goodlatte and Chambliss, said after those meetings that the trade talks could get caught in a "downward spiral where no one wins" if countries back away from a commitment to dramatically cut farm subsidies and tariffs.

NCC Vice Chairman John Pucheu, a Tranquillity, CA, producer, and Gary Adams, NCC vice president, Economic and Policy Analysis, participated in a series of meetings in Geneva, Switzerland on key trade matters.

Pucheu and Adams were briefed on the status of the WTO agricultural negotiations by USTR Ambassadors Peter Allgeier and Richard Crowder. Both reiterated the extensive differences that exist on various proposals regarding market access.

During meetings with WTO staff and a delegation from the Brazilian government, Pucheu conveyed the cotton industry’s concern about the current state of trade negotiations. Specifically, he stressed that US agriculture must see real and meaningful gains in market access in order to accept the reductions in domestic support currently being proposed. He also reiterated the importance of China’s participation in the negotiations.

A NCC delegation will be in Geneva the week of June 26 to coincide with scheduled meetings of key trade ministers.

In response to a Federal Register notice asking if the Secretary of Agriculture should conduct a confirmation referendum to continue the amendments to the Cotton Research and Promotion program, the NCC said such a referendum was not warranted. As required by the statute, the Secretary periodically reviews the need for a referendum on the mandatory assessment portion of the legislation.

NCC Chairman Allen Helms stated, “The Cotton Research and Promotion Program is of critical importance to the U.S. cotton industry in promoting the use of cotton and cotton products in this country and abroad. It also funds critical cotton production and textile manufacturing research. The program is operated by Cotton Incorporated which conducts a highly professional program with expert staff at the direction of a board of directors, representing all regions of the U.S. Cotton Belt.”

The NCC’s statement reiterated its strong support for the research and promotion program.

Helms, noting that the program enjoys overwhelming support from cotton producers, said, “therefore, the National Cotton Council believes that it is unnecessary for the Secretary to conduct a confirmation referendum on the continuation of the amendments to the 1990 Act. Such a referendum is not warranted and would require costly expenditures that could otherwise be invested in the program.”

Through Aug. 1, producers can nominate eligible candidates to serve on USDA Farm Service Agency (FSA) county committees, with committee elections to be held this fall.

Producers who participate or cooperate in programs administered by FSA and live in the local administrative area conducting an election may be nominated for candidacy for a committee. Farmers and ranchers can obtain a complete list of eligibility requirements by visiting a local USDAServiceCenter or online at: http://www.fsa.usda.gov/pas/publications/facts/html/cocelig06.htm.

Individuals may nominate themselves or others as candidates. Additionally, community based organizations representing minorities and women may nominate candidates. To become a nominee, eligible individuals must sign nomination form FSA-669A. The form includes a statement that the nominee agrees to serve if elected.

Farmers and ranchers should keep the following important dates in mind during the ’06 county committee election process:  1) the nomination period begins June 15 and Aug. 1 is the deadline to file nomination forms at the local USDA Service Center, 2) USDA will mail ballots by Nov. 3 to eligible voters, 3) Dec. 4 is the last day to return voted ballots to the local USDA Service Center and 4) newly elected county committee members take office Jan. 1, ’07.

For more information about FSA county committees or to obtain a nomination form (FSA-669A), visit a local USDAServiceCenter or online at: http://www.fsa.usda.gov/pas/publications/elections/Default.asp.

Mike Tate, a Huntsville, AL, producer and chairman of the NCC Environmental Task Force (ETF), told the EPA’s Science Advisory Panel (SAP) that NCC supported the adoption and implementation of a natural refuge as proposed by Monsanto for Bollgard II for both bollworm and tobacco budworm. The NCC came to this conclusion after review of research data, consultation with technology providers and seed companies, review of input from public entomologists, and letters from several state and regional producer interest groups.

Tate urged that EPA not lose sight of the larger issue of a workable, effective and fair Integrated Resistance Management (IRM) plan across all Bt technologies and across all cotton production regions. The NCC agreed that current two-gene Bt products have distinct IRM advantages over the single-gene Bt products. He said that the NCC recognizes that transition away from the single- gene Bollgard varieties in a timely manner will improve the durability of Bt technology.

“However, we strongly support the continued registration of Bollgard cotton for not less than three additional years to allow time for the delivery of agronomically acceptable two-gene Bt varieties stacked with the newest herbicide protection technologies,” Tate noted.

The SAP expressed support for a natural refuge in the southeastern states. Most panelists suggested the gathering of at least one more year of data from Mid South states and data from two or three more years from the Texas regions. The SAP report is expected within 90 days. Registrations of Bollgard and Bollgard II expire in September.

The Pesticide Policy Dialogue Committee met at the EPA Office of Pesticide Programs in Crystal City, VA. This panel provides a forum for a diverse group of stakeholders to provide feedback to the pesticide program on various pesticide regulatory, policy and program implementation issues.

Cannon Michael, a Los Banos, CA, producer and member of the NCC Environmental Task Force and California Cotton Growers Assoc., recently joined the Committee and participated in the review of such issues as spray drift, human pesticide studies, worker safety, label improvements and National Pollutant Discharge Elimination System permits. Cannon replaces Bill Tracy, a Buttonwillow, CA, producer whose long and distinguished service as NCC representative to the Committee contributed important grower input to pesticide programs.

The ’05-06 Cotton Leadership Class visited Washington, DC, to better understand the important role that government agencies and Congress play in the cotton industry. Briefings involved the White House, USDA, the State Department, EPA and the House and Senate Agriculture committees. The class took the opportunity to meet with their Congressional Members and also had meetings with other Washington representatives including the National Council of Textile Organizations.

Class members are:  Forester Adams, Steve Bullard, Will Coley, Tim Cox, Mitch Hensley, Jeff Hux, Kevin Nelson, Toby Robertson, Jason Ward and Heath Watson. They will graduate at the NCC’s Mid-Year Board of Directors Meeting in July. Sponsored by DuPont Crop Protection, the Cotton Leadership Program is in its 23^rd year.

Net export sales for the week ending June 8 were 122,600 bales (480-lb). This brings total ‘05-06 sales to approximately 17.5 million. Total sales at the same point in the ’04-05 marketing year were slightly more than 14.8 million bales. Total new crop (’06-07) sales are 596,100 bales.

Shipments for the week were 456,500 bales, bringing total exports to date to roughly 14.0 million bales, compared with the 11.0 million at the comparable point in the ’04-05 marketing year. With two months remaining in the marketing year, weekly shipments must average roughly 376,000 bales to reach the USDA projection of 16.8 million bales.

Adjusted World Price, SLM 11/16	44.83 cents	*
Coarse Count Adjustment	0.00 cents
Current Step 2 Certificate Value	2.85 cents
Marketing Loan Gain Value	7.17 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	57.15 cents
Forward 3135 c.i.f. Northern Europe	62.01 cents
Coarse Count c.i.f. Northern Europe	54.70 cents
Current US c.i.f. Northern Europe	60.00 cents
Forward US c.i.f. Northern Europe	67.05 cents
2005-06 Weighted Marketing-Year Average Farm Price
Year-to-Date (August-April)	47.82 cents	**
**August-July average price used in determination of counter-cyclical payment