Cotton's Week: August 10, 2007

Cotton's Week: August 10, 2007

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Immigration Enforcement Unveiled

Homeland Security Secretary Michael Chertoff announced new policies for a stepped-up immigration enforcement program, including one that would target employers who ignore notices from the federal government that they have employees with questionable documentation.

Homeland Security agents now will be informed when the Social Security Administration sends a “no-match” letter to employers with a significant number of employees in question.

Though the law currently provides that employers could be fined for hiring illegal immigrants, the new policy clarifies that the federal government could hold them liable if they fail to take steps within 90 days of receiving a no-match letter.

Other policies include: (1) directing the Labor Dept. to review a seasonal agricultural worker program and institute changes that will provide farmers with an “orderly and timely flow of legal workers”; (2) unveiling a revised naturalization test in September; (3) reducing the number of documents, currently at 29, employers can accept to confirm the identity and eligibility of an employee; (4) seeking voluntary partnerships with states that would allow the federal government to access photographs in Dept. of Motor Vehicle databases to help root out the use of fraudulent driver’s licenses and lay the foundation for an expanded employer verification system; and (5) requiring through a “rulemaking process” that all federal contractors and vendors verify the legal work status of their employees through the federal verification system.

A DHS fact sheet on “Improving Border Security and Immigration Within Existing Law” is at http://www.dhs.gov/xnews/releases/pr_1186757867585.shtm.



More CSP Funding Released

Agriculture Secretary Mike Johanns announced the release of additional funding for Conservation Security Program (CSP) implementation.

The funding was authorized in the supplemental appropriations bill passed by Congress in May. Funds will be made available for both the completion of payments on FY07 CSP contracts as well as to prepare for a future program signup. Specifically, $35 million has been made available to complete payments to producers who received only partial funding for their FY07 payment.

In addition, $2.93 million is being made available to help producers and Natural Resources Conservation Service field staff prepare for a future program signup in the 51 watersheds previously identified for FY07.

These watersheds represent more than 64,500 of the nation's potentially eligible farms and ranches, covering nearly 24 million acres of cropland and grazing land. A list of the eligible watersheds is at http://www.nrcs.usda.gov.


USDA Puts US Crop at 17.3 Million Bales

In its Aug. crop report, USDA estimates a ’07-08 US crop of 17.3 million bales. Upland production was estimated at 16.5 million bales and ELS production at 808,500 bales. Harvested area was estimated at 10.6 million acres, implying a non-harvested area of 422,000 acres based on USDA’s June acreage report. The resulting abandonment rate is roughly 3.82%. The national average yield per harvested acre was estimated to be 783 pounds, two pounds above the 5-year average.

Regionally, upland production in the Southeast is estimated at 3.46 million bales, with a regional average yield of 725 pounds. The Mid-South’s estimated upland production is 5.50 million bales, with an expected yield of 977 pounds. The Southwest’s upland crop estimate is 6.44 million bales, with a regional yield average of 625 pounds. The West’s upland crop is estimated at 1.14 million bales and a regional average yield of 1,340 pounds.

ELS production is estimated at 808,500 bales, with average yield of 1,325 pounds.

                                      ’07-08 US Cotton Crop

 

PLANTED

ACRES

Thou.

HARV.

ACRES

Thou.

YIELD PER

HARV.

ACRE

Lb.

5-YEAR

AVG.

YIELD

Lb.

480-

POUND

BALES

Thou.

UPLAND

 

 

 

 

 

SOUTHEAST

2,360  

2,291 

725  

705 

3,458  

   Alabama

400  

390 

652  

664 

530  

   Florida

105  

104 

785  

636 

170  

   Georgia

1,050  

1,000 

792  

734 

1,650  

   North Carolina

540  

535 

682  

695 

760  

   South Carolina

200  

198 

650  

679 

268  

   Virginia

65  

64 

600  

745 

80  

MID-SOUTH

2,730  

2,703 

977  

914 

5,500  

   Arkansas

830  

820 

1,083  

995 

1,850  

   Louisiana

340  

335 

946  

879 

660  

   Mississippi

680  

675 

960  

888 

1,350  

   Missouri

400  

398 

941  

925 

780  

   Tennessee

480  

475 

869  

853 

860  

SOUTHWEST

5,255  

4,940 

625  

628 

6,437  

   Kansas

55  

50 

576  

524 

60  

   Oklahoma

200  

190 

700  

639 

277  

   Texas

5,000  

4,700 

623  

630 

6,100  

WEST

415  

409 

1,340   

1,340 

1,142  

   Arizona

180  

178 

1,375  

1,357 

510  

   California

185  

184 

1,383  

1,381 

530  

   New Mexico

50  

47 

1,042  

897 

102  

TOTAL UPLAND

10,760  

10,343 

767  

772 

16,537  

TOTAL ELS

298  

293 

1,325   

1,239 

809  

   Arizona

4  

900  

931 

8  

   California

265  

261 

1,379  

1,296 

750  

   New Mexico

9  

747  

904 

14  

   Texas

20  

19 

935  

906 

37  

ALL COTTON

11,058  

10,636 

783  

781 

17,346  

Source: USDA-NASS August Crop Production Report.



Global Production Estimate Increased

In USDA’s August “Supply and Offtake” report, the ’06-07 world production estimate was raised 890,000 bales from the July report to 119.25 million. Beginning stocks were raised 80,000 bales from the previous month to 57.75 million bales. Estimated world mill use was raised 390,000 bales to 122.72 million. The projected world ending stocks on July 31, ’07 is now pegged at 57.86 million bales, with a corresponding stocks-to-use ratio of 47.1%. For the ’07-08 marketing year, USDA puts world production at 115.92 million bales, up 130,000 bales from the July report. World mill use was increased 620,000 bales to a projected 127.78 million bales. Consequently, world ending stocks for ’07-08 are projected to be 51.52 million bales for a stocks-to-use ratio of 40.3%.

USDA sees ’06-07 US cotton production at 21.59 million bales, mill use of 4.95 million bales and exports at 13.00 million bales. The estimated total offtake now stands at 17.95 million bales, generating ending stocks of 9.70 million bales. The estimated stocks-to-use ratio is 54.0%. For the ’07-08 US crop, USDA sees production of 17.35 million bales. Mill use is estimated to be 4.60 million bales while exports are pegged at 16.70 million bales. The estimated total offtake stands at 21.30 million bales, resulting in ending stocks of 5.80 million bales and an estimated stocks-to-use ratio of 27.2%.


ACP, Foundation Meeting Jointly

The American Cotton Producers (ACP) and Cotton Foundation will meet jointly on Aug. 14-15 in St. Louis, MO.

In the general session on the 14th, ACP Chairman Jay Hardwick will lead Cotton Belt crop reports by ACP state chairmen and NCC Chairman John Pucheu will address challenges facing the industry.

NCC staff and their reports include Gary Adams, vice president, economics and policy analysis, an economic outlook; John Maguire, senior vice president, Washington operations, a Capitol Hill overview; Bill Norman, vice president, Technical Services, topics for inclusion in the ’08 Beltwide Cotton Conferences; and Craig Brown, vice president, Producer Affairs, Universal Standards Advisory Committee producer nominations. Foundation President Clyde Sharp will conclude with a Foundation business session.

In the next day’s session, Bill Gillon, NCC’s consultant on trade, will update attendees on the Brazil case and the WTO Doha talks; Mark Lange, NCC President/CEO, will discuss NCC’s farm bill strategy; and Adams and Maguire will review the House-passed farm bill and the Senate farm bill debate, respectively.


Southeast Hosting Final ’07 PIE Tour

Mid-South cotton producers will see operations in Alabama, Georgia and Florida on Aug. 12-17 during the fourth and final tour of the ’07 Cotton Foundation Producer Information Exchange (PIE).

The 10-member group includes:  Arkansas producers: Jed Anderson, Haynes; and Dave Parten, Nathan B. Reed, and Chad A. Russell, all of Marianna; Louisiana producers: Peter C. DeKeyser, Alexandria; and Patrick C. Glass, Newellton; Mississippi producers: Robert W. Farmer Jr., Cruger; and T. Michael Sides, Tunica; as well as Missouri producer, Allen Below, Parma; and Tennessee producer, David McDaniel, Brighton.

The tour will include visits to:  a Bayer CropScience research facility in Milano, FL; Baldwin Sod Farm in Huxford, AL; Tri County Peanut Company in Donalsonville, GA; Tim Crosby Farms and Wavell Robinson Farms in Pavo, GA; SL Perry Farms and the Southeast Ag Expo in Moultrie, GA; Kelly Manufacturing Company in Tifton, GA; McNair Farms in Camilla, GA; McLendon and Webb Farms in Leary, GA; Ronnie Lee Farms in Bronwood, GA; the McClesky Peanut Mill in Smithfield, GA; CB Coley Gin in Vienna, GA; and a Temik production facility in Woodbine, GA.

The PIE Program, now in its 19th year, is coordinated 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.


Recycling Regulation Requested

The NCC, along with 12 other agricultural organizations, has asked that the EPA act quickly to publish a final regulation requiring pesticide registrants’ participation in recycling empty, non-refillable plastic pesticide containers.

As publicized to stakeholders over the past two years and announced in a preamble at the Container and Containment Final Rule on Aug. 16, ’06, the NCC asked that EPA adhere to its commitment to establish a container recycling rule.

For 15 years, the Ag Container Recycling Council (ACRC) voluntary program has successfully provided a national program for plastic container collection and recycling. ACRC is used widely and supported by farmers, retail dealers, professional specialty pesticide applicators, state regulators and many others.

Among stakeholders, there is agreement on the need to make the recycling program a regulatory requirement. The NCC and other stakeholders believe national coordination and consistent funding are the keys to continuing stewardship. Without EPA’s rulemaking, current voluntary recycling programs likely will suffer under state-by-state, piecemeal requirements. The NCC also believes a uniform, national recycling program offers the most effective incentive for proper rinsing and disposal of empty containers, as well as ensuring availability of inspection and collection centers.


Sales Set Good Pace

Crop year ’06 exports reached approximately 13.0 million bales (480-lb). Outstanding sales of approximately 1.7 million bales on July 31 were carried forward. Combining the carried forward sales with net export sales for the week ending Aug. 2 of 105,900 bales and ’07-08 sales of 1.6 million made in the previous marketing year brings total ’07-08 sales to approximately 3.4 million. Total sales at the same point in the ’06-07 marketing year were slightly more than 1.9 million bales. Total new crop (’08-09) sales are 92,700 bales.

Shipments for the week were 119,700 bales, bringing total exports to date to 119,700 bales, compared with the 158,400 at the comparable point in the ’06-07 marketing year.


Prices Effective Aug. 10-17, '07

Adjusted World Price, SLM 11/16

53.92 cents

*

Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

 0.00 cents

Import Quotas Open

NA

Step 3 Quotas (480-lb. bales)

NA

ELS Payment Rate

0.00 cents

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

70.49 cents

Forward 3135 c.i.f. Northern Europe

 NA

Coarse Count c.i.f. Northern Europe

 NA

Current US c.i.f. Northern Europe

71.05 cents

Forward US c.i.f. Northern Europe

NA

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

47.32 cents

**

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

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