|Action Sought on Marketing Loan Provisions|
Woody Anderson, former NCC chairman and current chairman of the NCC’s Farm Policy Task Force, was joined by American Cotton Shippers Assoc. President and NCC Director Andy Weil, III, and AMCOT and NCC Director Mike Quinn in a meeting with USDA Under Secretary Dr. Mark Keenum. NCC President/CEO Mark Lange and Senior VP John Maguire attended.
As a result of the comprehensive agreement on marketing loan provisions approved by the NCC’s Executive Committee (see 5/25 Cotton’s Week), the NCC is seeking administrative action for implementation on Aug. 1, ’07 of several marketing loan changes. For the determination of the Adjusted World Price (AWP), the NCC is seeking: a shift to the three lowest Far East quotes; use of full transportation cost as estimated by USDA; recognition of trade barriers to US cotton exports; expanding the current color/leaf adjustment to include premiums for strength, micronaire, and uniformity to the AWP quality adjustment; and the introduction of a fine count adjustment for qualities better than 31-3-35. In addition, the NCC is seeking the elimination of the 75-day limit on storage credits on transferred cotton.Under Secretary Keenum acknowledged the importance of industry consensus and the NCC’s work to reach the comprehensive agreement. He noted that while USDA has regulatory authority for adjustments to the marketing loan, expected cost considerations would play a significant role in any potential changes.
|Farm Bill Mark-ups Continue|
The General Farm Commodities Subcommittee, chaired by Rep. Etheridge (D-NC), will mark-up the titles under its jurisdiction on June 19. The full Committee will mark-up all titles of the new farm legislation on June 26-28.
Two subcommittees completed work on provisions under their jurisdiction. The Specialty Crops, Rural Development and Foreign Agriculture subcommittee completed work on peanuts, sugar and rural development, with trade to be considered by the full committee. The subcommittee, chaired by Rep McIntyre (D-NC), approved a provision extending the current sugar program and extended the peanut program with a $20/ton increase in the loan rate with the increased cost offset by reducing peanut payment base acres from 85% to 74% for direct and counter-cyclical programs.
The subcommittee on Horticulture and Organic Agriculture, chaired by Rep. Cardoza (D-CA), approved a block grant program for specialty crops that increases from $20 million in FY08 to $55 million in FY12. Specialty crop interests sought a much larger program but Chairman Cardoza, a strong advocate for specialty crops, explained the budget is insufficient to accommodate the industry’s request at this time.
The legislation approved by the subcommittee includes a number of other provisions including an increase in the minimum amount of fruits, vegetables and other specialty crops that USDA must purchase for nutrition and school programs. The subcommittee approved an increase in the limit on the assistance program from $15,000 to $150,000 but only after being cautioned by Agriculture Committee Chairman Peterson (D-MN) that he is concerned by efforts to differentiate limits which apply to conservation programs compared to crop programs. He called limits “illogical” and said he hopes to harmonize limits between programs.
During a subsequent call with reporters, Chairman Peterson broached the idea of eliminating direct payments to farms under 10 acres as a means to save money and eliminate benefits for “hobby” farmers. During the call, Peterson also reiterated his intention to write a farm bill that is good for agriculture and will be mindful of the message from US agriculture - “don’t write this bill for the WTO.”
Secretary Johanns and his top administrators called a meeting of farm groups to express concern over the direction of the farm policy debate on Capitol Hill. He reviewed the Administration’s proposal and indicated it was developed with budget and trade considerations. He said the decision in the Brazilian cotton case is an indication of future challenges if the new farm bill varies from the Administration’s proposals. And, he indicated it is his expectation that cotton will continue to be targeted and is in a difficult situation.
NCC representatives indicated they are focused on improving competitiveness, that Commodity Credit Corp. loan stocks are below 2.0 million bales and that the US Trade Representative’s office and USDA have presented excellent defenses in the recent WTO hearings. The NCC representatives also indicated that the industry will be deeply disappointed if the Compliance Panel does not agree that the steps taken to date comply with the original ruling.
|Loan Cotton Declines Sharply|
According to the latest estimates from USDA’s Farm Service Agency (FSA), upland cotton remaining in the loan has fallen below 2 million bales. The current totals represent a dramatic reduction from the early-May level of almost 10 million bales.
Slow export demand allowed cotton loan stocks to remain at higher levels later into the marketing year than what is normally observed. However, a recent increase in export shipments and the commencement of the AWP transition period has led to significant redemptions. Further redemptions are expected in coming weeks.
Of the remaining cotton under loan, 57% are Form A loans while the remainder is Form G.
The NCC Weekly Market Report, which also includes CCC Loan Stocks data, is available at http://www.cotton.org/econ/reports/weekly-report.cfm.
FarmPolicyFacts.org, a web site aimed at educating legislators, staff, the media and all interested parties involved in farm policy about agriculture's contribution to a strong and vibrant United States, was launched.
The web site was created by the recently-formed, non-profit Farm Policy Facts (FPF) coalition of farmers and commodity groups of which NCC is a member. A site link can be found on the NCC’s web site at http://www.cotton.org/about/related-orgs.cfm.
FPF also distributed its first issue of a regular e-newsletter today. The initial open rate on Capitol Hill was encouraging, and all targeted House committees and staff reviewed the e-newsletter.
The FarmPolicyFacts.org web site offers unfiltered and exclusive news articles about farm policy and those who produce “the safest, most abundant and most affordable food supply in the world.” Included on the site are: “News Exclusives” issuing breaking farm policy-related news; “Misperception Musings” offering farm policy fallacies; “Lawmaker’s Turn” featuring Congressional Members speaking out; “Commodity Corner” containing facts about America’s various commodities; and “Farm Life” providing a glimpse into America’s farming sector.
Some of the other features found at the site include: the daily “Fact of the Day” providing useful information about America’s farmers; “RSS” feeds that enable frequent users to receive breaking news in real-time; a comprehensive “Policy Library” complete with Farm Bill information, testimony and news; “Rural America Headlines” from across the country; a “Photo Gallery”of American farmers and farms; a catalog of farm policy-related “Radio News” as well as other useful links for more information about America’s farmers.Other Farm Policy Facts coalition members include the American Sugar Alliance, Minnesota Corn Growers Assoc., National Assoc. of Wheat Growers and USA Rice Federation.
|Get America's Heartland News|
Viewers of America's Heartland, the weekly television series celebrating the miracle of agriculture, can learn more about the show in a bi-monthly e-newsletter. Heartland News and Notes features breaking news, interesting features and behind-the-scenes notes from the producers of the series, which is seen nationally on public television and on RFD-TV. To subscribe, visit http://www.americasheartland.org/signup.htm.
The NCC is a promotional partner of America's Heartland. Presentation of the series is made possible by Monsanto and the American Farm Bureau Federation.
|EPA Approves Natural Refuge|
Producers growing Bollgard II (BG II) in specified areas no longer will be required to plant a structured, non-Bt cotton refuge. After reviewing data submitted by Monsanto, EPA concluded that non-cotton crops and plants serve as a natural refuge for cotton bollworm and tobacco budworm moths. Thus, the presence of alternate hosts for insects and the efficacy of two Bt proteins in BG II sufficiently reduce the risk of resistance.
During EPA’s review, NCC’s Environmental Task Force (ETF) sought a natural refuge for all two-gene Bt products. The ETF also urged the agency to give commensurate consideration to all current two-Bt gene products. Dow AgroScience’s proposal for a natural refuge for Widestrike cotton still is under EPA review. Additionally, the ETF recommended re-registration of Bollgard for no less than three years. As the result of a separate review in June ’06, EPA extended the registration of Bollgard through the ’09 growing season.
The natural refuge option is permitted when BG II is planted in Alabama, Arkansas, Florida, Georgia, Kansas, Kentucky, Louisiana, Maryland, Missouri, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee and Texas (excluding the following Texas counties: Brewster, Crane, Crockett, Culberson, El Paso, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terrell, Val Verde, Ward, and Winkler), and Virginia.
The current structured refuge requirements for BG II will remain in place for the purposes of pink bollworm resistance management in the trans-Pecos area of Texas, Arizona, New Mexico and California. In addition, EPA’s previously established planting restrictions for all Bt cotton varieties still apply in the Texas Panhandle counties of Carson, Dallam, Hansford, Hartley, Hutchinson, Lipscomb, Moore, Ochiltree, Roberts and Sherman as well as south of Highway 60 in Florida.Bollgard cotton with the single Bt protein will remain available through the ’09 growing season. Monsanto and EPA remind growers to adhere to stewardship agreements requiring structured refuge of 5% unsprayed or 20% sprayed non-Bt cotton when planting Bollgard.
|CCI China Promotions on Upswing|
Cotton Council International (CCI) China and CCI Hong Kong continues their fashion focus with a new advertising campaign starring Chinese actress/singer Zhou Xun. The campaign, which features print and outdoor ads across China and Hong Kong from June- November, is expected to increase COTTON USA awareness among the key target audience in China/Hong Kong.Meanwhile, CCI Taiwan is sponsoring a COTTON USA promotion in Taipei of the 18th Golden Melody Awards --the most significant Chinese pop music awards ceremony. In conjunction with the promotion, CCI will carry out thematic, targeted advertising to enhance the image and increase awareness of the COTTON USA Mark. The estimated earned advertising value for COTTON USA is more than $2 million.
|Shipments Hit Marketing Year High|
Net export sales for the week ending May 31 were 190,000 bales (480-lb). This brings total ’06-07 sales to approximately 13.8 million. Total sales at the same point in the ’05-06 marketing year were approximately 17.4 million bales. Total new crop (’07-08) sales are 845,300 bales.Shipments for the week were 420,100 bales – a marketing year high - bringing total exports to date to 9.1 million bales, compared with the 13.5 million at the comparable point in the ’05-06 marketing year. With approximately two months remaining in the marketing year, weekly shipments must average roughly 488,000 bales to reach the USDA projection of 13.25 million bales.
|Prices Effective June 8-14, '07|