Cotton's Week: July 6, 2007

Cotton's Week: July 6, 2007

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Surplus Commodities Bartered

Agriculture Secretary Mike Johanns announced that USDA will donate about $50 million worth of government-owned bulk commodities to US food processors in exchange for further processed agricultural products that will be distributed through USDA domestic and international food assistance programs.

"This is a win for all parties, especially low-income, needy people in this country and around the world who receive U.S. food assistance," Johanns said. "Bartering government-owned corn, cotton, soybeans and wheat for processed products like vegetable oil and flour as well as meat products, will help us meet an increasing demand for food assistance."

The uncommitted commodities were acquired through forfeiture under the Marketing Assistance Loan Program. If additional commodities are forfeited, they could be distributed through the same process.

The barter initiative will provide benefits to those in need both domestically and internationally, and it will save taxpayers' dollars by reducing government costs while enhancing storage space available for ’07 crops.

Domestic food assistance programs will receive 80% of the value of the commodities that are stored by USDA. This initiative will provide additional commodities to food banks and other entities to help meet food assistance needs. The remainder will be used in the McGovern-Dole International Food for Education and Child Nutrition Program.

The McGovern-Dole Program helps promote education, child development and food security for some of the world's poorest children. It provides for donations of US agricultural products, as well as financial and technical assistance, for school feeding and maternal and child nutrition projects in low-income countries.

USDA will begin exchanging the government-owned commodities for further processed products in the next few weeks. Product delivery to US food assistance recipients is expected to start in the fall.



First ’07 PIE Tour Set

Southwestern cotton producers will visit operations in Arizona and California on July 8-12 during the first tour of the ’07 Cotton Foundation Producer Information Exchange (PIE) Program.

The program, now in its 19th year, fosters valuable communication between cotton producers and helps them gain new perspectives in land preparation, planting, fertilization, pest control, irrigation and harvesting from peers in the Cotton Belt’s different regions. After this year’s tours, the program will have exchanged more than 800 individual US cotton producers.

The first tour’s participants include: Jarod C. Abernathy, Altus, OK; John A. Evridge, Midkiff, TX; Jacob J. Gerik, Aquilla, TX; Brian Kellog, Dill City, OK; Joshua A. Rieder, Sinton, TX; Israel Salazar Jr., Raymondville, TX; David Stubblefield, Colorado City, TX; James A. Synatschk, Sudan, TX; Dereck Totton, Oxford, KS; John Wilde, San Angelo, TX; and Ryan Williams, Farwell, TX.

The group will get an orientation after they arrive in Arizona on July 8. The tour will begin the next day with a visit to Southwest Specialty Foods in Goodyear followed by tours of Accomazzo Farms in Tolleson and Ak-Chin Farms in Maricopa. They also will visit the USDA Arid Lands Research Center in Maricopa. On July 11 in Fresno, CA, the participants will hear a presentation from the California Cotton Ginners and Growers Assoc. and then visit the Bayer CropScience Research Facility. Following an overview of the California water situation at the Errotabere Ranches office in Riverdale, individual tours with local cotton growers will be taken. On July 12, the group will get a presentation of the Tulare Lake bottom area at the Gilkey Farms office in Corcoran followed by individual tours with local growers.

PIE is facilitated by the NCC’s Member Services staff in cooperation with local producer associations in the regions. The program is supported by a grant from Bayer CropScience to the Cotton Foundation. On the second tour, producers from the Western region will visit Texas on July 22-27.


Compliance Report Updated

After receiving weekly data since January on “Bales Made Available for Shipment” reports from USDA, the NCC has revamped its “U.S. Warehouses Not Complying with Mandatory Reporting” page on the NCC web site at http://www.cotton.org/tech/flow/whsnotrept.cfm. The page, which is updated weekly with USDA’s information, shows the number of warehouses with Cotton Storage Agreements (CSA) in each state/region which fail to report the warehouse’s weekly cotton flow and the number of strikes incurred by warehouses.

Earlier in the year, USDA’s Storage Contract Branch Chief Steve Searcy issued a letter reminding warehouse operators of the new required mandatory weekly reporting of the warehouse’s cotton flow. The requirement is part of Amendment 2 to the CSA, which all warehouse operators with CSAs were requested to sign on Dec. 15, ’06.

The letter noted a three-strike system: failure to submit a weekly report will result in a telephone call from that USDA office; a second failure to submit will result in a letter of reprimand; and failure to submit three weekly reports within a 12-month period will result in the removal of a warehouse from the Commodity Credit Corp. List of Approved Warehouses.

In order to be reinstated, a warehouse operator must submit all missing cotton flow reports and pay a reinstatement fee.


Ecuadorians Looking at Phytosanitary

The NCC and USDA’s Animal & Plant Health Inspection Service (APHIS) will update an Ecuadorian Phytosanitary Team on the security of US cotton when that team tours Tennessee, Arkansas, Mississippi and Texas on July 8-12. The team also wants to assess the US Boll Weevil Eradication Program.

The overall purpose is to assure the Ecuadorian Animal and Plant Health Inspection Service representatives that it is not necessary to fumigate baled cotton that is densely packed.

NCC staff will provide NCC structure and NCC Technical Services overviews, an update on ginning for quality and a report on US cotton pest eradication programs and domestic transportation issues. USDA-APHIS staff also will address the group and update them on their Plant Protection and Quarantine (PPQ) department and on bilateral agreements.

USDA-APHIS asked the Ecuadorians to remove their fumigation requirement after referencing the success of this nation’s weevil eradication effort as well as quarantine programs that prevent re-infestation of eradicated areas.

In addition to the weevil program quarantines, the Pink Bollworm Quarantine program has treated densely packed cotton bales as a non regulated item for a number of years.


’08 Beltwide Featuring Theme of “Orchestrating Your Opportunities”

“Orchestrating Your Opportunities” is the theme of the ’08 Beltwide Cotton Conferences (BWCC) set for Jan. 8-11 at the Gaylord Opryland Resort and Convention Center in Nashville.

Bill Robertson, the NCC’s manager, Agronomy, Soils and Physiology and coordinator of Beltwide Cotton Production Conference programming, said program ideas will be gleaned from the NCC’s American Cotton Producers, the BWCC Steering Committee, the BWCC Technical Conference chairmen and NCC staff.

“We’re also making a greater effort to get ideas from crop consultants and encourage their attendance because they are playing an ever increasing role in producers’ farming decisions,” Robertson said. “In fact, we would like to gear some of the Production Conference workshops specifically toward consultants.”

The two-day Production Conference will focus on a wide range of timely topics -- from the ’07 farm bill to insect/weed resistance management.

The Gaylord Opryland should prove to be an outstanding venue for the ’08 BWCC as a three-year upgrade will have been completed, including renovation of all its rooms and suites; improvement of its convention services facilities; and the addition of more restaurants. For more information, visit www.gaylordopryland.com.

Robertson said that past and potential BWCC attendees will be mailed a flyer that includes basic information about the ’08 BWCC. The traditional information booklets will not be printed and distributed this year but made available in early October at the BWCC web site, http://www.cotton.org/beltwide. Specific details concerning the conferences and instructions for making room reservations also will be online.

Meanwhile, a CD of BWCC proceedings from the years ’05-07 was mailed last week to all ’07 BWCC attendees who requested them. The proceedings also have been posted on the BWCC web site, but only are accessible there by NCC members.

All ’07 BWCC attendees are reminded that the BWCC web site also contains audio recordings for most of the ’07 BWCC presentations with many of those containing an abstract or manuscript. A user ID is required (the no. on the ’07 BWCC name badge), but it can be obtained by emailing beltwide.cotton.org.


New Crop Sales Continue Strong, Shipments Surge

Net export sales for the week ending June 28 were 147,600 bales (480-lb). This brings total ’06-07 sales to approximately 14.5 million. Total sales at the same point in the ’05-06 marketing year were approximately 18.3 million bales. However, total new crop (’07-08) sales are 993,100 bales.

Shipments for the week were 495,800 bales, bringing total exports to date to 10.9 million bales, compared with the 15.2 million bales at the comparable point in the ’05-06 marketing year.

With approximately one month remaining in the marketing year, weekly shipments must average roughly 467,000 bales to reach the USDA projection of 13.0 million bales.


Vietnam Tour Generates Solid Sales

As part of Cotton Council International’s (CCI) first buyers’ tour to Vietnam last week, 28 buyers from 12 Japanese retailers and trading companies, representing more than $25 billion in annual sales, traveled to Ho Chi Minh City.

With support from Cotton Incorporated, the COTTON USA-sponsored tour linked the Japanese retail market—the second largest in the world—with manufacturers in Indonesia, Thailand and Vietnam. Participating retailers and trading companies met one-on-one with 34 different suppliers from Indonesia, Thailand and Vietnam during a private trade fair designed to promote US cotton-rich yarn, fabric and finished products such as garments and towels. During the tour, the buyers also visited four textile and garment manufacturers in Ho Chi Minh City where they inspected each company’s manufacturing facilities. A full range of US cotton-containing wovens, denims, shirtings, knitwear, sportswear and garments was shown.

Evaluation surveys collected from the buyers and the suppliers indicate that suppliers see the likelihood of doing business with the buyers they met. Attending buyers reported that due to favorable trade policies, competitive prices and acceptable quality, Vietnam can play a major role as a production platform using ASEAN yarns and fabrics to satisfy Japanese consumers.

Indonesia, Thailand and Vietnam are the 4th, 7th and 12th largest export destinations for US cotton fiber, respectively. Japan is the second largest importer of cotton products after the United States.

A key component of CCI’s Supply Chain Marketing (SCM) program, buyers tours bring together leading buyers from the brand and retailing sectors with mill and garment manufacturer suppliers in order to promote the sales of US cotton-containing items.

To date, the estimated retail sales value of CCI’s global SCM program exceeds $45 million.


Prices Effective July 6-12, '07

Adjusted World Price, SLM 11/16

52.99 cents

*

Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

0.00 cents

Import Quotas Open

 1

Step 3 Quotas (480-lb. bales)

 97,616

ELS Payment Rate

0.00 cents

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

67.26 cents

Forward 3135 c.i.f. Northern Europe

69.40 cents

Coarse Count c.i.f. Northern Europe

NA

Current US c.i.f. Northern Europe

66.40 cents

Forward US c.i.f. Northern Europe

70.70 cents

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

47.39 cents

**

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

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