Cotton's Week: April 20, 2007

Cotton's Week: April 20, 2007


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ACP Discusses Critical Farm Policy Issues

At its initial ’07 meeting in Dallas, TX, American Cotton Producer leaders, under the chairmanship of Louisiana producer Jay Hardwick, heard presentations on several critical policy areas pertaining to the ’07 farm bill debate.

Based on recommendations from its Farm Policy Committee, chaired by Texas producer Jimmy Dodson, producer leaders developed recommendations to the NCC on provisions that would revise the calculation of the schedule of loan premiums and discounts and the Adjusted World Price. The ACP recommendations will be presented at the upcoming meeting of the NCC’s Marketing Loan Working Group.

“The goal we seek to achieve with our recommendations is finding ways to make our marketing loan program more functional by promoting offtake and minimizing loan forfeitures,” Hardwick stated. “It is critical that we continue to seek ways to improve our cotton program provisions while at the same time being mindful that we will have to work diligently to oppose any major structural or eligibility changes to the marketing loan.”

Hardwick reported the results of its recent independent action regarding AWP adjustments for the ’06 crop. The ACP also had a thorough discussion regarding NCC strategy to defend current payment eligibility and limitation provisions of farm law. 

NCC Chairman John Pucheu, in addressing the producer group, provided an update of NCC activities, including an action request to industry leadership urging opposition to any attempt by Congress or USDA to stop implementation of warehouse storage credits for the ’08 fiscal year. He also discussed the NCC’s recent testimony to the House Agriculture Subcommittee on General Farm Commodities and Risk Management, which conveyed support for the basic provisions of the ’02 farm law and elaborated on the industry’s concerns about the Administration’s farm bill proposal, especially the existing adjusted gross income means test.

The group also  heard reports from Darryl Earnest, deputy administrator of the USDA-AMS Cotton Program. He provided a classing office activities update, and reported that classing fees for the ’07 crop would remain the same as the ’06 crop at $1.85/bale.

NCC staff provided reports on Congressional activities, trade issues and the cotton economic outlook. Staff also reviewed the status of charges for loan redemption and forfeitures for transferred and non-transferred cotton. A NCC-developed paper on that issue is at

FSA Revises Form CCC-605

As a follow up to USDA Farm Service Agency’s (FSA) recent issuance of notices to county offices concerning cotton transfer procedures and forfeiture charges (see 4/13/07 Cotton’s Week), FSA has issued a revised Form CCC-605.

The revisions were made to conform the form’s agreement to regulation and current policy. The new CCC-605 is available at

Fair Currency Act Passage Urged

The National Council of Textile Organizations (NCTO) is urging Congress to act immediately and address China's persistent manipulation of its currency by passing the Fair Currency Act of 2007.

In a news release, NCTO, a founding member of the China Currency Coalition, says the Act is the only meaningful piece of legislation that has been introduced on that concern. It said the measure, introduced by Reps. Ryan (D-OH) and Hunter (R-CA) in the House and Sens. Bunning (R-KY) and Stabenow (D-MI) in the Senate, will give American manufacturers the necessary tools to combat the pervasive currency manipulation that exists among countries like China and Japan.

"Since the Asian currency crisis in the late 1990s, when the Asian countries devalued their currencies across the board, employment in the U.S. textile and apparel sector has decreased by more than 50 percent," NCTO President Cass Johnson said. "This means that more than 700,000 workers were left out of a job, without health insurance, and without a retirement plan. The bleeding of jobs because China refuses to stop manipulating its currency, something that it agreed to do when it joined the WTO, has got to stop. The recent elections were a clear indication that American workers are tired of being on the losing end of the free trade agenda and they are now demanding that the U.S. government look out for their interests by getting tough on China."

Johnson further stated that, "the U.S. textile industry is particularly at risk from China's currency manipulation and its multitude of other subsidies. Quotas on textile and apparel imports from China will expire in less than two years, and unless something is done to rebalance the competitive environment, China is predicted to take two-thirds of the U.S. apparel import market. This will have a devastating effect on U.S. textile companies and workers and will further destabilize economies around the world, especially those in Central America and Mexico, where more than one million workers are currently employed in the textile and apparel sector."

CRP Report/Study Available
USDA Farm Service Agency (FSA) Administrator Teresa Lasseter announced the release of two new reports online that contain valuable information about the benefits of the Conservation Reserve Program (CRP).

The ’06 CRP annual report, titled "CRP Enrollment Statistics and Program Summary," is available at  It contains information not previously included in earlier reports such as a summary of CRP's benefits, and it provides details about land under CRP contract as of Sept. 30, ’06. Among the new information is a summary that provides figures on CRP's reduction of soil erosion, enhancement of water quality and expansion and improvement of wildlife habitat.

Lasseter also announced that a new nationwide study now available demonstrates, among other things, that enrolling marginal cropland in CRP increases the amount of organic matter on enrolled fields and virtually eliminates soil and nutrient loss. The study, titled "Estimating Water Quality, Air Quality and Soil Carbon Benefits of the Conservation Reserve Program," is at

FSA conducted the study in cooperation with the U. of Missouri's College of Agriculture, Food and Natural Resources/Food and Agricultural Policy Research Institute.

FSA implements CRP on behalf of USDA's Commodity Credit Corp. CRP is the nation’s largest private-lands conservation program with more than 36 million acres enrolled.

Gin School Applications Sought

Applications are still being taken for the Western Ginners School in Las Cruces, NM - May 15-17 and the Stoneville Ginners School in Stoneville, MS - June 12-14. Registration information for the schools can be completed online at The Southwest Ginners School, held April 9-11 in Lubbock, attracted 125 attendees.

The schools’ curriculum features Levels I, II and III.

Level I courses are: Introduction to Cotton Ginning and the Industry; Maintenance of Auxiliary Gin Components; Basic Hydraulics; Basic Gin Safety; Maintenance and Adjustments for Seed Cotton Cleaners, Gin Stands, and Lint Cleaners; Air Utilization and Drying; and Electricity in the Gin.

The Level II offerings include: Purpose and Operating Principles of Individual
Gin Machines; Efficient Operation, Adjustment, and Maintenance of Gin Equipment; Pneumatics and Waste Collection; Electrical Systems; Hydraulic Systems; Gin Safety; Management Tips; and Roller Ginning (at the Western School only).

Level III features: Review of Functions of a Ginning System; Electrical Systems; Air Systems in the Gin; Drying and Moisture Restoration Systems; Matching Machinery Capacities in the System; Seed Cotton Unloading Systems and Management of Seed Cotton Handling Systems; Bale Presses and Hydraulic Systems; Safety Programs and Labor Regulations; Cottonseed Handling Systems; and Roller Ginning (at the Western School only).

National Cotton Ginners Assoc. (NCGA) Executive Vice President Harrison Ashley said the schools also include continuing education courses on all three days and a special one-day course for gin owners, managers and gin office employees. That course offers an overview of the basic ginning process and updates on important regulatory issues such as wage and hour, immigration, and air quality.

School cooperators include NCGA, USDA-ARS, NCGA member associations, NCC, Cotton Incorporated, gin machinery/equipment manufacturers/suppliers, Cooperative State Research, Education and Extension Service, and select land grant universities.

’07 PIE Schedule Set

The NCC scheduled dates and locations for the ’07 Cotton Foundation Producer Information Exchange (PIE) Program.

Cotton producers from the Southwest will see operations in Arizona and California on July 8-13; Far West producers will travel to Texas on July 22-27; Southeast producers will tour Louisiana, Arkansas and Mississippi on July 29-Aug. 4; and Mid-South producers will visit Alabama, Georgia and Florida on Aug. 12-17.

PIE participants gain new perspectives in land preparation, planting, fertilization, pest control, irrigation and harvesting – with the overall goal of improving yields and fiber quality. Upon completion of this year’s tours, the PIE will have exposed nearly 800 US cotton producers to innovative cotton production practices in regions different from their own.

The NCC’s Member Services staff, in conjunction with local producer associations, conducts the program. The program also receives support from The Cotton Foundation via a grant from Bayer CropScience.

COTTON USA Sourcing Featured

Cotton Council International’s (CCI) COTTON USA Sourcing Program was featured and nine US textile mills showcased at the “Apparel Sourcing Show 2007” in Guatemala City.

US manufacturers in the COTTON USA Pavilion included: Buhler Quality Yarns Corp; Clovertex LCC; Frontier Spinning Mills; Hamrick Mills; Parkdale; R.L. Stowe Mills, Inc.; Swift Spinning Mills, Inc.; Ramtex; and Tuscarora Yarns, Inc.

In a private event organized by the COTTON USA Sourcing Program, the US and Korean Ambassadors to Guatemala addressed the US mills and the Korean textile and garment makers in an effort to strengthen relationships between the two countries. Cotton Incorporated staff also conducted seminars.

Additional COTTON USA exposure was gained through media interviews with CCI’s staff, with an estimated 500,000 consumers in the region reached.

Sales Surge, Shipments Steady

Net export sales for the week ending April 12 were 852,300 bales (480-lb) – a marketing year high. This brings total ’06-07 sales to slightly more than 11.1 million bales. Total sales at the same point in the ’05-06 marketing year were approximately 15.6 million bales. Total new crop (’07-08) sales are 508,000 bales.

China led the way with purchases for the week of 518,700 bales. This brings China’s total commitments for the ’06-07 marketing year to 3.0 million bales. However, even with the recent purchases, China’s total commitments are still 5.0 million bales below year-ago levels. For the week, Turkey was the second largest buyer with purchases of 111,700 bales.

Shipments for the week were 281,200 bales, bringing total exports to date to 6.5 million bales, compared with the 10.6 million bales at the comparable point in the ’05-06 marketing year.

Prices Effective April 20-26, '07

Adjusted World Price, SLM 11/16

42.35 cents


Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

9.65 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

58.76 cents

Forward 3135 c.i.f. Northern Europe


Coarse Count c.i.f. Northern Europe


Current US c.i.f. Northern Europe

58.50 cents

Forward US c.i.f. Northern Europe


2006-07 Weighted Marketing-Year Average Farm Price  
Year-to-Date (August-February)

47.84 cents


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