Cotton's Week: July 7, 2006

Cotton's Week: July 7, 2006


Doha Outcome Uncertain

NCC Chairman Allen Helms said he hoped WTO member countries could regain focus on trade liberalization as a path to a successful agreement in a statement following last week’s talks in Geneva between WTO ministers that concluded without a breakthrough and left the Doha Round negotiations in an uncertain phase.

“The most significant stumbling block for these negotiations is market access,” Helms said. “Although a large number of studies show that increased market access is vital for the economic future of developing countries, many of those countries are not demonstrating a sincere commitment to worldwide trade liberalization. Instead, they have focused on loopholes to market access. Clearly, further work is needed in agricultural and non-agricultural market access talks.”

Helms, who attended the talks with NCC President/CEO Mark Lange, said that in October ’05, the United States tabled an ambitious offer that contained dramatic reductions in domestic agricultural support, the elimination of export subsidies and a balanced proposal for real increases in market access.

“The NCC supported the U.S. offer even though it would require significant changes in the U.S. cotton program,” Helms noted. “The U.S. offer has not been matched. U.S. Trade Representative Schwab and Agriculture Secretary Johanns have maintained a firm position in the latest round of talks, insisting that the Doha Round maintain a high level of ambition for trade liberalization while committing to changes in domestic support for agriculture if that high level of ambition is achieved. A positive outcome in Doha, one that truly liberalizes agriculture markets worldwide, will be good for U.S. agriculture. We continue to support the goals of the United States and the balance in domestic support and market access reflected in the U.S. negotiating position. We commend the Administration and the Congress for not allowing deadlines to undermine the sound negotiating position of the United States.”

NCC Mid-Year Meeting in DC

The NCC’s Board of Directors will hold its Mid-Year meeting at the JW Marriott Hotel in Washington, DC, July 12-14.

During the open session from 1:30-4:30 pm on the 13th, NCC Chairman Helms will provide an industry update and NCC staff will report on specific industry issues. The open session also will feature reports from Cotton Council International (CCI) President David Burns and CAC Chairman Bruce Heiden.

Participants in the NCC’s Policy Education Program will attend the meeting. The PEP is supported by a grant to The Cotton Foundation from Syngenta.

On the 12th, a CCI 50th Anniversary/NCC Hill Reception/Dinner will be held at the Union Station. Joining CCI President David Burns, a North Carolina producer, on the dinner program will be Senate Appropriations Committee Chairman Thad Cochran (R-MS) and Deputy Secretary of Agriculture Chuck Conner.

Helms Set to Testify at Farm Bill Hearing

NCC Chairman Allen Helms will offer testimony at the next Senate Agriculture, Nutrition & Forestry Committee regional hearing regarding future farm policy. The hearing will be on July 17 on the campus of Southeast Missouri State U. in Cape Girardeau, MO.

Senate Agriculture Committee Chairman Saxby Chambliss (R-GA) noted, “These hearings are a valuable opportunity for direct dialogue between farmers and the agriculture committee and for folks in the surrounding region to share how they would like to see farm policy shaped as we write the next Farm Bill.”

C.B. “Chuck Coley, a Vienna, GA, producer, offered testimony at that panel’s first hearing last month in Albany, GA. Other hearings will be held on July 21 in Harrisburg, PA, and on July 24 in Ankeny, IA. Additional hearings also are being planned for the western United States with dates and locations yet to be announced. The schedule of regional field hearings can be found at

In other farm bill developments, USDA released the third in a series of theme papers examining various aspects of farm programs. The latest release focuses on rural development, while the earlier papers addressed risk management and conservation.

Bollgard Re-registration Extended

EPA’s Office of Pesticide Programs (OPP) has approved Monsanto’s request for the re-registration of Bollgard (BG) single gene Bt cotton for three years.

Mike Tate, a Hazel Green, AL, producer and chairman of NCC’s Environmental Task Force, recently urged EPA at their Scientific Advisory Panel meeting to extend BG registration for no less than three years to allow time for development of BG II varieties that will produce yields and qualities equal to premium BG varieties.

The EPA decision extends the availability of current BG varieties to growers through the ’09 season.

EQIP Incentives Extended

Agriculture Secretary Mike Johanns announced he is extending the deadline for completing environmental projects to qualify for the Environmental Quality Incentives Program (EQIP) energy cost assistance to Sept. 1.

“Farmers and ranchers have put various conservation practices on hold because of the recent increases in the cost of energy,” he said. “As part of our commitment to help mitigate the impact of high energy costs on agricultural producers, this cost adjustment and time extension will lessen the impact of energy prices on farmers and ranchers.”

Prior to the announcement, the deadline for completion of the EQIP projects was June 30th to receive the incentive payment for EQIP projects. The one-time payment adjustment applies only to participants who signed EQIP contracts in ’04 or earlier and only will be paid for practices that are completed between March 1 and Sept. 1, ’06. Projects must be completed before payments can me made. The 15% payment increase will focus on a select list of specific practices that have escalated in price by 20% or more because of rising energy costs and to practices most affected by increased costs in construction materials such as concrete, steel and plastic pipe.

Administered by USDA’s Natural Resources Conservation Service, EQIP is a voluntary conservation program for farmers and ranchers that promotes agricultural production and environmental quality. EQIP offers financial and technical assistance to participants who implement structural or management practices on agricultural land. For more information on this one-time adjustment, go to the NRCS Web site or visit your nearest USDA Service Center.

Mid-South Producers Touring Texas

Mid-South cotton producers will see cotton operations in Texas on July 16-21 during the second tour of the ’06 Cotton Foundation Producer Information Exchange (PIE) Program.

The PIE, which exposes visiting producers to the diverse and innovative practices of the hosting region, is coordinated by NCC’s Member Services staff and supported by Bayer CropScience.

The nine Mid-South producers are:  from Mississippi - Ricky Belk, Minter City; Alan Byrd, Lyon; and Todd Oglesby, Chatham; from Louisiana - Donald Branton, Ferriday; J. Price Bundy, Ida; and LeRoy Kirby, III, Belcher; and David Gammill, Tyronza, AR; Stephen L. Harris, Senath, MO; and Jeffery German, Somerville, TN.

The group will begin their tour in Lubbock with a visit to PYCO Industries on July 17 where the group will focus on cottonseed and its varied uses. They also will tour the Farmer’s Cooperative Compress. On July 18, they will visit Plains Cotton Cooperative Assoc. where company president Wally Darneille will lead a presentation on electronic and high tech technologies in cotton marketing. In Acuff, the participants will see Mimms Farms and other local growers will lead them on individual farm tours. The group travels to Corpus Christi on July 19 to wrap up the tour with a visit to Gulf Press La Quinta Facility and a trip to King Ranch and Farms.

Southwestern region producers will visit operations in Arkansas, Mississippi and Tennessee on Aug. 6-11.

Wetlands Funds Made Available

The Natural Resources Conservation Service (NRCS) made available $10 million for a Wetlands Reserve Program reverse auction initiative to identify more effective and efficient methods of reducing the cost of WRP easement acquisition.

"The Wetlands Reserve Program is a voluntary program established for the purpose of protecting, restoring and enhancing wetlands, while maximizing wildlife benefits," said NRCS Chief Bruce Knight. "This reverse WRP auction will allow the taxpayer and our farmers and ranchers to get even more for their investment."

The WRP reverse auction is being offered to eligible landowners in select counties of Delaware, Georgia, Kentucky, Missouri, Idaho, California and Colorado. Eligible landowners should complete an application for the reverse auction at their local NRCS field offices. The sign-up period is July 3-28, ’06. To be eligible for participation, lands must be privately owned; tribal land; or state, county, or non-federal public lands that meet WRP eligibility criteria.

Two types of enrollment options are available to eligible landowners: a 30-year easement where the landowner may receive 75% of the landowner offer for the enrolled land plus 75% of the cost of approved wetland restoration practices, or a perpetual easement where the landowner may receive 100% of the landowner offer for the enrolled land plus the cost of approved wetland restoration practices. 

Applications will be prioritized according to an environmental benefits index that is determined by dividing the landowner bid offer by the environmental self assessment score. For more information, contact your local USDA Service Center or go to:

Beijing Cotton Day Success

Under the banner, “Keep Cool With Hot Fashion,” three top fashion labels – Lee Jeans, Benetton and Sisley – partnered with Cotton Council International’s COTTON USA program to showcase their spring/summer cotton collections in CCI’s Cotton Day in Beijing.

The show’s four sub-themes highlighted the versatility of cotton in summer fashion for work and leisure: “Cotton Be Natural” and “Cotton Be Playful” by Lee Jeans, “Cotton Be Chic” by Benetton and “Cotton Be Sensual” by Sisley. The event, CCI’s second Cotton Day in Beijing, was held at the trendy Xingfucun Conference Hall and attracted VIPs from the China Cotton Assoc., China Cotton Textile Assoc., and Beijing’s Agricultural Trade Office (ATO). In addition, 70 nationwide media representatives attended.

Meanwhile, CCI arranged for 30VIPs from cotton mills, fabric suppliers, brands and the Hong Kong ATO to attend CCI’s textile and apparel industry gathering at the Inter-Continental Hotel in Hong Kong. Attendees viewed a presentation of CCI’s recent activities in consumer promotions, supply chain marketing and trade servicing.

Shipments Strong, Sales Steady

Net export sales for the week ending June 29 were 254,400 bales (480-lb). This brings total ’05-06 sales to about 18.3 million. Total sales at the same point in the ’04-05 marketing year were slightly more than 15.6 million bales. Total new crop (’06-07) sales are 700,000 bales.

Shipments for the week were 421,000 bales, bringing total exports to date to 15.2 million bales, compared with the 11.8 million at the comparable point in the ’04-05 marketing year.

With about a month remaining in the marketing year, weekly shipments must average roughly 355,000 bales to reach the USDA projection of 16.8 million bales.

Prices Effective July 7-13, 2006

Adjusted World Price, SLM 11/16

43.11 cents


Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

2.17 cents

Marketing Loan Gain Value

8.89 cents

Import Quotas Open


Step 3 Quotas (480-lb. bales)


ELS Payment Rate

0.00 cents

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

55.23 cents

Forward 3135 c.i.f. Northern Europe

58.67 cents

Coarse Count c.i.f. Northern Europe

52.67 cents

Current US c.i.f. Northern Europe

57.40 cents

Forward US c.i.f. Northern Europe

62.60 cents

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

47.77 cents


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

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