|Cotton’s Farm Bill Needs Conveyed to Key Senate Panel|
NCC Chairman John Pucheu participated in a hearing conducted by the Senate Agriculture Committee. The hearing was the third in a series to review the “economic challenges and opportunities” facing US agriculture in preparation for developing new farm legislation. The Committee heard testimony from the NCC and several other commodity organizations. The American Farm Bureau, National Farmers Union, American Farmland Trust and Bread for the World also testified.
Pucheu told the Committee that the cotton industry recommends that Congress retain the structure of current law because sound farm policy is essential for the industry to successfully meet the challenges which include declining domestic demand due to cheap textile imports and a need to increase cotton exports. He told the Committee that farm law also must include a marketing loan which is available without limitations and an accurate world price discovery mechanism; a direct payment for predictability and stability; and a counter-cyclical program to provide support when prices are low. Pucheu advised the Committee that he has appointed an industry working group that is developing recommendations for making the cotton marketing loan more effective while maintaining a predictable safety net for growers.
The Tranquillity, CA, producer also asked the Committee to include a fiber competitiveness provision to assist struggling US spinners. He expressed support for cropping flexibility and continuation of the planting restrictions on fruits and vegetables. He presented the industry’s opposition to lower payment limits, more stringent qualifications or any changes in the adjusted gross income test in the ’02 farm law. He urged continuation of the extra-long staple cotton program with its competitiveness provision.
Pucheu acknowledged that current stocks are unusually high due in part to weak demand. China’s purchases of US cotton are running 62% below a year ago because China’s domestic production and purchases from India have displaced US growths. He said the Chinese continue to ration market access to maintain high domestic prices and are heavily subsidizing cotton and textile production.
The US should not make further concessions in the Doha round negotiations, Pucheu said; should not allow cotton to be isolated; and, should insist that India and China participate more fully in the negotiations rather than ask for exemptions as less developed countries.
Other commodity organizations, with the exception of the National Corn Growers Assoc., expressed support for continuation of the current structure of commodity programs with modifications. The NCGA continued to voice support for a revenue insurance program combined with direct payments and a recourse loan. The American Farm Bureau expressed support for a farm law based on current structure but recommended replacing the price trigger for counter-cyclical payments with a revenue trigger.
During an extensive question and answer session and as part of his opening remarks, Committee Chairman Harkin (D-IA) indicated he is considering eliminating or phasing out direct payments and using the savings for renewable energy research and development, conservation and nutrition programs. He also advised the members of the commodity panel that there may be a need to modify the adjusted gross income test in current law by lowering the $2.5 million threshold.
The Administration has proposed a $200,000 adjusted gross income test without the current exemption which provides that if at least 75% of the income is from farming, ranching and forestry, the means-test does not apply.
|Pucheu Visits Key Congressional Members|
NCC Chairman Pucheu met with key Cotton Belt members of the House Agriculture Appropriations Subcommittee.
During meetings with members of that panel, he asked the members to support the industry’s funding priorities including boll weevil eradication, pink bollworm eradication, research projects and retention of storage credits when the adjusted world price is below the loan. The Administration has proposed terminating storage credits for FY08, which begins Oct. 1, ’07.
Pucheu explained that storage credits are an important component of the marketing loan and terminating the credits on Oct. 1 would have the devastating effect of reducing US cotton’s competitiveness and would cause significant financial losses for growers by changing the terms of the loan for those with outstanding loans after Oct. 1.
Pucheu expressed appreciation for members’ continued support and acknowledged their concern about working in a tough budgetary climate. Fully funding the industry’s priorities and maintaining storage credits will require a strong effort throughout the year.
|NCC Addresses NCTO Meeting|
NCC Chairman Pucheu and ACP Farm Policy Task Force Chairman Jimmy Dodson updated attendees at the National Council of Textile Organizations’ (NCTO) annual meeting in Washington, DC, regarding the NCC’s efforts on the fiber competitiveness provision to support the US cotton spinning industry.
NCTO Chairman Smythe McKissick of Alice Manufacturing reported on NCTO’s past year activities with a focus on trade policy.Members also heard a presentation by representatives of the firm of King and Spaulding regarding their recent success with a counter-vailing duty (CVD) petition on single sheet coated paper from China. US Department of Commerce officials reported to NCTO that the paper case has been forwarded to the US International Trade Commission for determination of injury to US manufacturers before any duty could be applied.
|Leadership Class Applications Sought|
Industry members interested in applying to or nominating someone for the ’07-08 Cotton Leadership Class -- the 25th since the program’s inception -- are encouraged to visit http://leadership.cotton.org.
That site contains program curriculum, eligibility requirements and a downloadable application. Applicants or nominators also may contact NCC’s Member Services at 901-274-9030 or their local Member Services representative for additional information. Deadline for application submission is July 2.
The Cotton Leadership Program is geared to individuals who have the potential and desire to become leaders. Participants receive training during five week-long sessions across the Cotton Belt. The class, comprised of four producers and a participant from each of the other six industry segments, interacts with industry leaders and visits farms, processing operations and research facilities. They also meet with lawmakers and government agency representatives during a visit to Washington, DC, and attend the NCC’s annual meeting and its mid-year board of directors meeting.The program is supported by a grant to The Cotton Foundation from DuPont Crop Protection.
|Cotton Physiology Program Revived|
The NCC is reviving the Cotton Physiology Education Program, and the first Cotton Physiology Today newsletter will be distributed electronically the week of April 30 and posted on the NCC’s web site in the Technical area at http://www.cotton.org/tech/index.cfm under the physiology category.
The initial newsletter, “Planting and Replanting Decisions,” includes a focus on cotton stand establishment with information on such important areas as seed quality, water absorption and germination physiology.
Bill Robertson, the NCC’s manager of Cotton Agronomy, Soils and Physiology, said future newsletters will include fine-tuning of past topics and a focus on physiology-related subjects that have emerged in the past decade.The original Cotton Physiology Today newsletter was initiated in ’89 and was published until ’01.
|’07 BWCC Met Attendee Objectives|
A NCC-conducted survey of ’07 Beltwide Cotton Conferences (BWCC) attendees revealed that gaining personal business information/professional contacts was the primary objective of respondents – and 85% of respondents indicated they were “very satisfied” that the forum helped them attain that objective.
The survey also showed a majority of attendees were pleased with the Production Conference’s general session and with their hotel accommodations.
Crop production and pest management topped the list of topics attendees wanted to see addressed at the ’08 BWCC set for Jan. 8-11 at the Gaylord Opryland Hotel in Nashville.
Bill Robertson, the NCC’s manager, Cotton Agronomy, Soils and Physiology and the NCC’s BWCC coordinator, said the survey responses will enable the Beltwide Cotton Conferences Steering Committee and NCC staff to develop programming that will appeal to growers in the four major U.S. Cotton Belt production regions and “offer everyone something they can take home.” He said further suggestions for the ’08 BWCC are welcome and can be sent to him at firstname.lastname@example.org.
He noted the post ’07 BWCC survey generated a 28% response rate, the same as the post ’06 BWCC follow-up. An executive summary of the survey can be found at http://beltwide.cotton.org.Respondents to the post ’07 BWCC survey were eligible for a drawing for two round-trip airfares (from anywhere in the United States) to the ’08 BWCC. The drawing’s winner is Randall Conner, a Winters, TX, producer and association executive.
|Sales, Shipments Stay Strong|
Net export sales for the week ending April 19 were 545,900 bales (480-lb). This brings total ’06-07 sales to approximately 11.6 million. Total sales at the same point in the ’05-06 marketing year were approximately 15.9 million bales. Total new crop (’07-08) sales are 567,600 bales.Shipments for the week were 373,400 bales – a marketing-year high – bringing total exports to date to 6.9 million bales, compared with the 11.0 million at the comparable point in the ’05-06 marketing year.
|CCI Launches Supply Chain Initiative|
CCI launched innovative COTTON USA Supply Chain Marketing (SCM) events in Southeast Asia.
The new initiative by CCI Japan and CCI Southeast Asia capitalizes on recent Free Trade Agreements between Japan and Indonesia and Thailand, and Vietnam’s recent entry into the WTO. Some 115 executives from 77 textile and apparel companies participated in the premier event, a seminar series in Vietnam, Thailand and Indonesia.
Participants received in-depth training on marketing cotton products to Japanese retailers and brands. Participants also received important insight into the Japanese market from CCI’s representatives, who used CCI’s Global Lifestyle Monitor as the basis for their presentations.CCI’s new SCM program will conclude in June with a trade show in Vietnam featuring local textile and apparel companies and textile manufacturers from Japan, Korea, Indonesia, Taiwan and Thailand.
|Mill Cotton Use Slide Continues|
According to the Commerce Dept., March (5-week month) total cotton consumption in domestic mills was 234.18 million pounds for a seasonally adjusted annualized rate of 4.79 million bales (480-lb). Last year’s March annualized rate was 6.02 million bales.
The February (four-week month) estimate of domestic mill use of cotton was lowered by 3.81 million pounds to 181.10 million. The revised seasonally adjusted annualized rate of consumption for February is 4.81 million bales. This is lower than the February 2006 annualized rate of 6.23 million bales.
Based on Commerce estimates from Aug. 1, ’06, through March 31, ’07, projected total pounds consumed during crop year ’06-07 would be 2.4 billion pounds or 4.92 million bales. USDA’s latest estimate of ’06-07 crop year mill use is 4.95 million 480-pound bales.Preliminary April domestic mill use of cotton and revised March figures will be released by the Commerce Dept. on May 24.
|Prices Effective April 27-May 3, '07|