Cotton's Week: October 6, 2006

Cotton's Week: October 6, 2006


Schwab Says U.S. Will Not Be First To Move

US Trade Representative Sue Schwab, speaking at a conference organized by the American Enterprise Institute, said the US has “no plans to go first and make a new agriculture proposal” in the World Trade Organization negotiations in an effort to restart the talks.  According to Schwab the U.S. was first to make a comprehensive proposal that has yet to be matched.  And “calls for the US to go first?  Been there.  Done that.  Bought the T-shirt.  Didn’t work.”

Schwab also said to move forward, there must be quiet bi-lateral dialogue followed by small group dialogue. 

In her speech, Schwab indicated the deadlock over agriculture remains the key to resuscitating the talk.  She believes the negotiations will be concluded but cannot say when. 

Schwab pointed out that the Uruguay Round broke down in “shambles” in 1990 and was then concluded in 1993 with a comprehensive agreement.

CSP Watersheds Announced

Secretary of Agriculture Mike Johanns announced that 51 watersheds will be eligible for the ’07 Conservation Security Program (CSP); several of which are in cotton-producing areas. These watersheds represent more than 64,500 of the nation's potentially eligible farms and ranches, covering nearly 24 million acres of cropland and grazing land.

Congress created CSP in the ’02 farm law and the Natural Resources Conservation Service began CSP in FY04. Currently, there are 280 watersheds in CSP nationwide, covering nearly 224 million acres.

Based upon President Bush's requested funding level for the program for FY07, 51 additional watersheds would be eligible for enrollment. Eligible watersheds are being announced now to allow farmers and ranchers adequate time to gather resource information on their operations in preparation for a prospective sign-up. Producers should check to see if their operation is located in an eligible watershed and begin preparing now for a sign up period that will be announced after funding is finalized.

A list of the eligible watersheds can be viewed at USDA offers CSP in new watersheds annually on a rotational basis in as many watersheds as funding allows. For more information about CSP, including a map of the FY07 watersheds and eligibility requirements, visit

Farm Reservoir Act Introduced

Last week, Congressman Terry Everett (R-AL) introduced the Farm Reservoir Act to provide cost-share assistance to agricultural producers for the construction of reservoirs on their farms for irrigation.  These reservoirs would be funded through the Environmental Quality Incentives Program (EQIP), with the maximum amount of cost share assistance being 50 percent of the cost of constructing the reservoir. 

Eligibility requirements include the normal EQIP requirements, plus a cost-effectiveness requirement.  Cost-effectiveness will be determined by calculating the cost per square acre-foot of water and the cost per acre of irrigated land.  In addition, the producer must maintain agricultural production on the land for at least five years.

Due to their size and location off-stream, the engineering and construction cost, as well as their environmental impact would be much lower than larger on-stream reservoirs.  These farm reservoirs could possibly be used in parts of the country where ground water sources are either inadequate or impractical to develop for irrigation.

Congressman Jo Bonner (R-AL) and Congressman Mike Rogers (R-AL) are cosponsors of this bill.

CRP Rental Payments Issued

USDA began issuing $1.8 billion in Conservation Reserve Program (CRP) rental payments to participating producers for FY07. The payments allow producers to earn an average of $4,143 per farm enrolled in the program.

Producers holding about 739,000 contracts on 425,000 farms will receive an average of $48.88 per acre. The number of contracts is higher than the number of farms because producers may have multiple contracts on a single farm.

Included in the totals are 331,000 contracts (3.6 million acres) for CRP’s continuous sign-up and 408,000 contracts (32.4 million acres) for general sign-up. Under continuous sign-up, producers may enroll high priority conservation practices such as filter strips and riparian buffers at any time without competition.

The announcement does not include rental payments for 1 million acres recently enrolled under the CRP general sign-up, held from Mar. 27-Apr. 28, ’06. Rental payments for this spring’s general sign-up acreage will be issued starting in Oct. ’07.

Currently, enrollment stands at more than 36 million acres, making CRP the largest public-private partnership for conservation and wildlife habitat in the US.

US Prevails in WTO Biotech Case

The WTO ruled in favor of the United States, Argentina and Canada in their case against the long-standing moratorium on approving agricultural biotech products and on bans some EU member countries have imposed on previously-approved products.

"We are a step closer to clearing barriers faced by US agricultural producers and expanding global use of promising advances in food production," US Trade Representative Susan Schwab said.

    Although the EU approved a handful of biotech products following the ’03 filing of the WTO case, Brussels has not lifted the moratorium entirely. The WTO panel also upheld the US challenge on product bans imposed by Austria, France, Germany, Greece, Italy and Luxembourg.

EPA Strengthens US Air Quality Standards

On Sep 21, EPA announced “the most protective National Ambient Air Quality Standards (NAAQS) for particulate matter (PM) in our nation’s history”. The standards address two categories of particle pollution: fine particles (PM2.5) and the inhalable coarse particles (PM10), both of which affect agricultural production and processing operations. EPA is retaining the daily 24-hr PM10 standard of 150 micrograms per cubic meter (μg/m3) that the ag community has been under since promulgation in 1987, but revoked the annual standard of 50 μg/m3 and has reduced the PM2.5 24-hour standard from 65 μg/m3 to 35 μg/m3 while retaining the PM2.5 annual average standard of 15 μg/m3 averaged over three years.

EPA Administrator Stephen L. Johnson said the agency selected the levels for the final NAAQS after reviewing thousands of peer-reviewed scientific studies about the effects of particle pollution on public health and welfare and that they provide an 'adequate margin of safety--requisite to protect the public health' (as required by the Clean Air Act). The agency held three public hearings and received more than 120,000 written comments on the proposed standards. States must meet the revised standards by 2015, with a possible extension to 2020, depending on local conditions and the availability of controls.

On Sep 28, EPA announced the monitoring regulations for fine and coarse particle pollution. The rule, which modifies regulations at 40 CFR parts 53 and 58, reshapes the existing network to ensure that monitors are concentrated in areas with air quality problems and adds monitoring for inhalable coarse particles at 75 multipollutant monitoring sites.  EPA indicates that they recommend PM monitors be placed near urban areas because the agency does not intend to regulate dirt and agriculture -- including ginning operations. Research conducted by Texas A&M and USDA/ARS scientists indicates that EPA’s approved samplers over sample agricultural generated PM2.5 and PM10. Those same scientists and other industry experts are urging EPA to recognize this over sampling in guidance and make appropriate corrections in the implementation of the PM standards.

The NCC will continue to monitor the PM issue: (1) as part of several coalitions that address air quality; (2) with representation on the EPA and USDA federal advisory committees on air quality.

Boll Weevil Action Committee Plans Post Eradication

NCC’s Boll Weevil Action Committee (BWAC), Chaired by Senath, MO producer Charles Parker, moved closer to completion of plans to transition from active eradication programs to activities designed to protect against reintroduction and reinfestation. Larry Antilla, Arizona Research and Protection Council, chaired a committee to develop a set of minimum standards for states to use as compliance guidelines for participation in cost sharing funds.

The Post Eradication Transition subcommittee, chaired by Craig Shook, Corpus Christi, TX producer, accepted the document and referred further work to BWAC producer leadership to formulate framework for organization and funding of post eradication programs.

Structure and function of an emergency contingency fund to use in the event of a reinfestation was also deferred to producer leadership.

The Beltwide Technical Advisory Committee, chaired by Dr. Tom Fuchs, Texas A&M, reviewed the minimum standards document and recommended its approval.

The TAC committee also recognized the urgency of an economic and environmental benefits study to document success of the eradication program and urged that grower leadership consider ways to plan and initiate such a study.

The BWAC also approved a plan for allocation of Federal cost sharing funds to program states and adopted a five year program cost projection.

Carbofuran Review Urged

Since the Aug. 3 announcement by EPA to cancel the registration of carbofuran, the active ingredient in the insecticide Furadan, for the majority of its uses, opponents of the cancellation continue to urge EPA to review all available studies.

NCC Chairman Allen Helms sent a letter to EPA on July 17, ’06 that 1) emphasized the benefits of carbofuran to cotton such as aphid control, and 2) reiterated the low dietary risk and minimal ecological impact of carbofuran used in cotton. NCC continues to work with the EPA and FMC, Inc., the manufacturer of Furadan, to express its support for keeping carbofuran available for specific regions and applications.

Under EPA’s cancellation procedure, FMC has petitioned the Agency for an additional six months to submit further studies to be reviewed by its Office of Pesticide Programs. Additionally, several Congressional members have asked Agriculture Secretary Johanns to convey USDA’s support for a postponement of a final decision by EPA until all scientific data is taken into consideration.

EPA Sets Pesticide Container Regs

EPA established its safety regulations for the storage and use  of pesticide containers and containment. This national standard applies directly to pesticide formulatorsblenders, agrichemical dealers, and independent commercial applicators. Effective Oct. 16, ’06, the agricultural industry is given three to five years, depending on the specific requirement, to comply with the provisions, which span from refillable and non-refillable containers, repackaging pesticide products, labeling, and ensuring structures around receptacles to contain spills.

Producers are exempted from the standard, but should be aware they must continue toare responsible to follow the new label directions mandated by the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)new rule. Manufacturers Registrants have three years to include these new  instructions on container labels.

Export Sales for Week Ending September 28

Net export sales for the week ending Sept. 28, ‘06 were 282,600 bales (480-lb.) – a marketing-year high. This brings total ‘06-07 sales to slightly over 3.3 million. Total sales at the same point in the ‘05-06 marketing year were approximately 6.7 million bales. Total new crop (‘07-08) sales are 121,300 bales (480-lb.). Shipments for the week were 109,300 bales, bringing total exports to date to 1.1 million bales, compared with the 2.2 million bales at the comparable point in the ‘05-06 marketing year.

Prices Effective Oct. 6 - Oct. 12, '06

Adjusted World Price, SLM 11/16

42.24 cents


Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

9.76 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

58.34 cents

Forward 3135 c.i.f. Northern Europe


Coarse Count c.i.f. Northern Europe


Current US c.i.f. Northern Europe

59.75 cents

Forward US c.i.f. Northern Europe


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

47.74 cents


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

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