Cotton's Week: December 29, 2006

Cotton's Week: December 29, 2006

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USDA Releases Payment Database

Farm Service Agency (FSA) Administrator Teresa Lasseter announced the release of a database referred to as the Section 1614 database, named for the authorizing section of the Farm Security and Rural Investment Act of 2002.

"The 2002 Farm Bill required us to develop a database that attributes payments to individuals, instead of stopping at the level of corporations and co-ops, as was the case with existing databases," Lasseter said.

The 1614 database is not the official record of payments to producers by USDA's Commodity Credit Corp. In many cases, historical data necessary to create the 1614 database had to be re-created using the best available records as compiled from FSA's 2,346 offices across the country. The official record of payments is contained in other data files that have been publicly available for several years. The database contains 64 million records for more than 2.3 million entities or individuals.

Copies of the database can be obtained by sending a written request to 1614 Database, Farm Service Agency, 6501 Beacon Drive - Mail Stop 8388, Kansas City, MO 64133-4676. A written request can also be faxed to (816) 448-5833 or emailed to RA.mokansasc2.fsakcfoia@one.usda.gov.



BWCC Grower Panel, Workshop Addressing Costs of Production

Dealing with high input costs is the topic that will be discussed by an innovative panel of cotton producers at the ’07 Beltwide Cotton Conferences, Jan. 9-12 in New Orleans.

Kevin Shaw, Lakeland, GA; Patrick Johnson, Tunica, MS; Barry Evans, Kress, TX; and Tyson Stuhr, Gila Bend, AZ; will tackle this management challenge during the Beltwide Cotton Production Conference general session on Jan. 10. That discussion will precede an afternoon workshop where Larkin Martin, a Courtland, AL, producer, will participate on a producer-focused panel addressing recordkeeping. That workshop will include an update on Cotton Incorporated-supported research that is helping develop a new system for producer field history and business accounting needs. The standardized system will enable producers to determine their true cost of production and allow for comparisons and benchmarking across regions, counties and farms.

Secretary of Agriculture Mike Johanns will deliver the keynote address at the general session on Jan. 10. The next day’s general session will feature reports from NCC Vice Chairman John Pucheu, a California producer, and Memphis merchant John Mitchell on the recent US cotton leadership orientation trip to China.

Among other general session presentations are a timely update on herbicide resistance by University of Georgia weed scientist Dr. Stanley Culpepper and a panel discussion of irrigation strategies by producers David Wildy, Manila, AR, and Gill Rogers, Hartsville, SC, along with Texas Agricultural Experiment Station researcher Dr. James Bordovsky.

Dale Thompson, NCC’s BWCC coordinator, said the ’07 BWCC features a blend of reports on both current and emerging technology – a program that should appeal to producers, consultants and others directly or indirectly involved with cotton production. He said strong allied industry support this year has bolstered the Cotton Foundation Technical Exhibits, where Foundation members update industry members on the unique products and services they supply and answer questions about special Foundation research and education projects they sponsor. The Exhibits will be open from noon to 6 pm on Jan. 10 and from 10 am until 4 pm on Jan. 11.

Registration for the NCC-coordinated BWCC has exceeded initial expectations. Limited rooms in the headquarters hotels - the New Orleans Marriott and Sheraton New Orleans - may be available. Reservations can be made online by going to the BWCC web site at http://www.cotton.org/beltwide.


China Increases ’07 Import Tariffs

Reports on CNCotton.com cite announcements from the Ministry of Finance changing the sliding-scale import tariffs that are applied to cotton imports in excess of the initial quota of 4.1 million bales. The new tariff scale ranges from 6% to 40% with lower-priced cotton receiving a higher tariff. In ’06, the scale ranged between 5% and 40%. 

The other significant change in comparison with to ’06 is an increase in the trigger price for the tariff. When the CIF value of cotton is at or above $0.66/lb (or 11,397 yuan per ton at current exchange rates), a tariff of 6% is applied. Previously, when the CIF value was at or above $0.62/lb (or 10,746 yuan per ton), a tariff of 5% was applied.   

Under the new schedule, as the CIF value falls below $0.66/lb, the tariff increases, eventually reaching 40% as the price falls. For cotton priced between $0.50 and $0.66, the structure of the sliding-scale tariff keeps the price plus the tariff at approximately $0.70/lb.

The sliding-scale tariff, coupled with the timing and method of allocating import quotas, is designed to provide support to China’s cotton producers.


Boll Weevil Quarantine Comment Period Extended

USDA’s Animal and Plant Health Inspection Service (APHIS) extended the comment period on a proposal to establish boll weevil regulations restricting the interstate movement of regulated articles into or through commercial cotton-producing areas. Consideration will be given to comments received on or before Feb. 1, ’07 as published in the Dec. 20 Federal Register.

These regulations are necessary to prevent the spread of the boll weevil to non-infested areas. Under the proposed regulations, articles subject to the movement restrictions such as wild or ornamental cotton, seed cotton, gin trash and processing equipment must be accompanied by a permit when transiting through commercial cotton-producing states. These articles present a risk of spreading the pest because the boll weevil, if present, can survive in these materials and could possibly be transported to non-infested areas.

States designated as commercial cotton-producing areas are Alabama, Arizona, Arkansas, California, Florida, Georgia, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia.

To submit comments, an original and three copies should be sent by postal mail or commercial delivery to Docket No. APHIS-2006-0002, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road, Unit 118, Riverdale, MD 20737-1238.

Internet comments should be submitted by going to the Federal eRulemaking portal at http://www.regulations.gov, selecting “Animal and Plant Health Inspection Service” from the agency drop-down menu; and clicking on “Submit.” In the Docket ID column, select APHIS-2006-0002 to submit or view public comments and to view supporting and related materials available electronically.

Comments are posted on the Regulations.gov web site and may be viewed at USDA, Rm 1141, South Bldg., 14th St. and Independence Ave., SW, Washington, DC, between 8 am and 4:30 pm, Monday-Friday, excluding holidays. To facilitate entry into the comment reading room, please call (202) 690 2817.


EPA Amends the SPCC Rule; Proposes Extending Compliance Dates

In December, EPA amended the Spill Prevention, Control and Countermeasure (SPCC) rule to address a number of issues raised by its ’02 final rule, including those pertaining to facilities with smaller oil storage capacities, qualified oil-filled operational equipment, motive power containers and mobile refuelers. EPA’s amendment also removed sections of the rule that are not appropriate for facilities with animal fats and vegetable oils, and extended the compliance dates for farms to July 1, ’09. EPA has prepared references to help the regulated community understand and comply with the rule. SPCC rule and amendment details can be found at EPA’s Oil Program web site: http://www.epa.gov/oilspill/index.htm.

In addition to the rule amendment issued in December, EPA is proposing to extend the compliance dates for owners and operators to prepare or amend and implement SPCC Plans until July 1, ’09. EPA expects to propose further revisions to the SPCC rule in ’07, and the compliance date extension would allow EPA the time to promulgate further regulatory revisions prior to the compliance date deadlines.

NCC and the National Cotton Ginners Assoc., working with other coalitions, will continue to interact with EPA as it considers additional revisions of the SPCC rule, which can apply to farms, gins and cottonseed oil mills.



NCC Annual Meeting Deadlines Draw Near

Jan. 15 is the deadline for making hotel reservations for the NCC’s ’07 Annual Meeting to be held at the Hilton Austin in Austin, TX, Feb. 1-5. The meeting registration deadline is Jan. 19. Registration and hotel reservations both can be made online by going to http://www.cotton.org/events/amreg. Rooms also may be reserved by calling the hotel directly at 1-800-236-1592.

Discounted air fare on American and Northwest airlines is available through Travelennium, and attendees may call Mary Saemenes there at 800-844-4924, ext. 318 for price quotes.

NCC Chairman Allen Helms will address the Feb. 5 general session along with Jeffrey Rosensweig, the director of EmoryU.’s Global Perspectives Program and a frequent keynote speaker on topics related to global strategy and economic trends.

Among other important convention sessions will be the Feb. 2 American Cotton Producers meeting, where the NCC’s planting intentions survey results will be announced. On Feb. 3, the delegates will hear the NCC’s Economic Outlook and a Cotton Incorporated report from J. Berrye Worsham. The National Cotton Ginners Assoc. also will hold its annual meeting that afternoon.

The Saturday luncheon will feature Michael Gerson, a senior fellow at the Council on Foreign Relations and Newsweek magazine contributor. He will talk about the new political season and how more than the balance of political power is at issue in ’07.

A number of Congressional leaders also have been invited to address the meeting.


Mill Cotton Use Slides

According to the Commerce Dept., November (4-week month) total cotton consumption in domestic mills was 174.4 million pounds for a seasonally adjusted annualized rate of 4.91 million bales (480-lb). Last year’s November annualized rate was 5.74 million bales.

The October (4-week month) estimate of domestic mill use of cotton was lowered by 1.2 million pounds to 193.6 million. The revised seasonally adjusted annualized rate of consumption for October is 5.06 million bales. This is lower than last year’s October annualized rate of 6.17 million bales.

Preliminary December domestic mill use of cotton and revised November figures will be released by Commerce on Jan. 25.



Sales, Shipments Steady

Net export sales for the week ending Dec. 21 were 130,700 bales (480-lb). This brings total ’06-07 sales to approximately 6.2 million. Total sales at the same point in the ’05-06 marketing year were approximately 10.3 million bales. Total new crop (’07-08) sales are 251,000 bales.

Shipments for the week were 172,000 bales, bringing total exports to date to 2.9 million bales, compared with the 4.6 million bales at the comparable point in the ’05-06 marketing year. Currently, shipments are running well below the level needed to reach USDA’s projection of 16.0 million bales. Shipments must average approximately 390,000 bales per week to reach the projected total for the marketing year.


Prices Effective Dec. 29, '06 - Jan. 4, '07

Adjusted World Price, SLM 11/16

46.67 cents

*

Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

5.33 cents

Import Quotas Open

 2

Step 3 Quotas (480-lb. bales)

207,713

ELS Payment Rate

 1.39 cents

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

62.77 cents

Forward 3135 c.i.f. Northern Europe

NA

Coarse Count c.i.f. Northern Europe

NA

Current US c.i.f. Northern Europe

65.08 cents

Forward US c.i.f. Northern Europe

 NA

 
2006-07 Weighted Marketing-Year Average Farm Price  
 
Year-to-date (August-November)

46.41 cents

**

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

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