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|Senate Commodity Title Discussion Draft Circulated|
Recent reports indicate Senate Agriculture, Nutrition and Forestry Committee Chairman Harkin (D-IA) has circulated to his panel members an initial discussion draft for the commodity title -Title I - of the new farm bill.
The draft is incomplete in that it does not address payment limitations or many commodity specific provisions, which it refers to as being negotiable. The draft would establish a revenue-based counter-cyclical program. A national target revenue would be calculated annually for each covered commodity -- and when the revenue/acre falls below the target revenue, participating producers would be eligible for a payment. In the case of cotton, the national target revenue per acre for the ’08 crop year would be $498.
Harkin’s revenue proposal would replace the current target price program, whereas the House-passed bill provides producers an option. The draft also would establish loan rates at 85% of the 5-year Olympic average price received but in no event could a loan rate increase or decrease by more than 1% per year.
The proposal would authorize USDA to offer a supplemental crop insurance program to producers who purchase buy-up coverage. The provision would trigger a payment when the county is declared a disaster county and there is a qualifying crop loss on the farm. There is no additional fee to the farmer for the additional coverage, which would be delivered by crop insurance companies. Crop insurance provisions would require modification of premiums to bring all state loss-ratios for buy-up coverage to within one standard deviation of the national loss-ratio within five years.Chairman Harkin has indicated it is his intention to schedule committee mark-up of the farm bill the week of Sept. 17.
|Bipartisanship, No Veto Needed|
In his address at the NCC’s ’07 Mid-Year Board Meeting in Memphis NCC Chairman John Pucheu detailed year-to-date NCC leadership and staff activities in the ’07 farm bill development process.
He told the NCC directors that as the farm bill development process moves forward, including Senate action in September, he hoped: 1) the industry can look forward to a return to bipartisanship and 2) the Administration will reconsider the veto threat issued following House passage of farm bill legislation.
The Tranquillity, CA, producer pointed to efforts with Cotton Council International (CCI) and Cotton Incorporated to further develop the industry’s joint initiative on sustainability to enhance US cotton’s image in domestic and overseas markets.
Pucheu also noted NCC work on a number of technical programs and regulatory issues, including: 1) proposed rulemaking for plant incorporated protectants and chemical facility anti-terrorism standards; 2) work with EPA and crop protection registrants to maintain product availability; and 3) establishing an industry working group to respond to proposed revisions to EPA’s Worker Protection Standards.
Reporting on trade policy issues, NCC’s Counsel Bill Gillon told directors that US cotton has serious international challenges before it that threaten the industry’s health and which demand “our thoughtful and deliberate response.” He noted:
In his update to directors, CCI President Michael Adams said it is time that WTO negotiators, the press and US cotton program critics pay more attention to the positive impact that CCI programs have had on consumer demand.
“It is also time to focus more on countering economic and trade policies that encourage excess synthetic fiber production and consumption to the detriment of cotton and other natural fibers – such as is the case in China,” the Mississippi cooperative official said. “Such policies disrupt markets, bias production and consumption of fibers toward synthetics, and ultimately cause the U.S. and other cotton producers to suffer depressed prices and reduced capacity.
The U.S. - over the years - has more than shouldered its responsibilities in building consumer demand so that stocks did not become burdensome. We must and we will continue to shoulder that burden, but we call on other countries to step to the plate and begin to do their parts as well.”Cotton Foundation Chairman Clyde Sharp reported that the Foundation currently has 67 members, whose dues, along with rental and investment income, generated more than $434,000 for support of 30 general research and education projects for ’07-08. He also noted a number of special projects supported by member grants that range from the Multi-Commodity Education Program and weed resistance education module that were launched in ’06 to such ongoing efforts as the Cotton Leadership Program.
|Approved Packaging Use Urged|
Joint Cotton Industry Bale Packaging Committee (JCIBPC) Chairman Lee Tiller sent a letter to NCC member ginners and others reminding them of the importance of using only bale packaging materials approved by the JCIBPC and USDA’s Commodity Credit Corp. (CCC).
The letter notes that bales wrapped and tied with materials other than those meeting the JCIBPC specifications can cause producers to be ineligible for CCC loans and other farm program benefits. Before purchasing bagging and ties, ginners are encouraged to ask distributors for proof --such as a certificate of analysis-- that the packaging materials offered comply with the published specifications. The JCIBPC Lists of Approved Manufacturers are published on the right hand side of the NCC Bale Packaging page, http://www.cotton.org/tech/bale/index.cfm.
The Specifications for Cotton Bale Packaging Materials are published by the NCC at http://www.cotton.org/tech/bale/specs/index.cfm. A copy of the USDA CCC-809 “Cooperating Ginner's Bagging and Bale Ties Certification and Agreement,” a contract between ginners and CCC to use only materials that comply with the published specifications, can be found on USDA’s web site at http://forms.sc.egov.usda.gov/eforms/formsearchservlet.
Variances from the specifications are granted by USDA-CCC for packaging materials in JCIBPC experimental or compatibility test programs. If a distributor claims that a packaging material is in a JCIBPC experimental or compatibility test program, the claim can be verified by reviewing the Participating Gin Warehouse Form links, also at http://www.cotton.org/tech/bale/index.cfm.
As in ’06, firms with materials in test programs should use these links to complete and submit online Participating Gin Warehouse Forms prior to placing the materials at gins. Firms with test programs may ask ginners for email addresses as well as other information concerning where the bales will be warehoused in order to complete the forms.
|Disaster Program Sign-up Announced|
USDA announced sign-up dates for the new Crop Disaster Programs, Livestock Compensation Program and Livestock Indemnity Program. Eligible farmers can sign-up for the Crop Disaster Program (CDP) beginning Oct. 15, ’07, if they suffered quantity losses to their crops. USDA will announce and conduct CDP sign-up for quality losses as soon as possible.
CDP provides benefits to farmers who suffered quantity and quality losses to ’05, ’06 or ’07 crops from natural disasters if the crop was planted before Feb. 28, ’07, or, in the case of prevented plantings, for crops that would have been planted before Feb. 28, ’07. Producers who incurred qualifying losses in ’05, ’06 or ’07 must choose only one year to apply for benefits.More information is available in a fact sheet titled, “Agricultural Assistance Act of 2007,” found on the Farm Services Agency web site, http://www.fsa.usda.gov.
|Phytosanitary Protocol Completed|
A cotton export protocol eliminating fumigation requirements for baled cotton was signed between Ecuador’s Servicio Ecuatoreano de Sanidad Agropecuaria (SESA) and USDA’s Animal and Plant Health Inspection Service (APHIS). As part of that agreement, APHIS sent a list of gin codes for all US cotton gins that may export cotton to Ecuador from two production cycles, ’05-06 and ’06-07. At the conclusion of the ’07 harvest season, APHIS anticipates sending a third list for the ’07-08 production cycle.
This listing completes the information that APHIS agreed to provide to SESA under the protocol. APHIS stated in a letter to SESA that although confident that products shipped under the protocol will meet SESA’s phytosanitary standards, they want SESA to notify them as soon as possible of any non-compliant shipments.The protocol follows an Ecuadorian phytosanitary team tour of the US Cotton Belt. During that visit, APHIS and industry presentations conveyed the remoteness of boll weevils making it to US gins and the processing steps at the gin that prevent the survival of these and other pests prior to and during storage.
|Mill Cotton Use Declines|
According to the Commerce Dept., July (4-week month) total cotton consumption in domestic mills was 176.5 million pounds for a seasonally adjusted annualized rate of 4.97 million bales (480-lb). Last year’s July annualized rate was 5.42 million bales.
The June (5-week month) estimate of domestic mill use of cotton was lowered by 776,000 pounds to 237.5 million. The revised seasonally adjusted annualized rate of consumption for June is 4.96 million bales. This is lower than last year’s June annualized rate of 5.57 million bales.
Commerce’s estimate of both upland and ELS consumption of cotton by US mills, when adjusted to represent the complete ’06-07 crop year, is approximately 4.97 million bales. This mill use level, when combined with Commerce’s export number of approximately 13.01 million bales, gives an estimate of 8.81 million bales for stocks on hand as of July 31, ’07. This number combined with Commerce’s 919,041 bales of excess of reported supply less distribution gives an ending stocks number of approximately 9.73 million bales.
USDA’s Aug. estimate of ending stocks was 9.70 million bales. USDA’s next supply and demand estimates are scheduled to be released on Sept. 12. Preliminary Aug. domestic mill use of cotton and revised July figures will be released by Commerce on Sept. 27.
|Sales, Shipments Stay Strong|
Net export sales for the week ending August 16 were 413,500 bales (480-lb.). This brings total ’07-08 sales to slightly more than 4.1 million. Total sales at the same point in the ’06-07 marketing year were approximately 2.1 million bales. Total new crop (’08-09) sales are 128,100 bales.Shipments for the week were 334,600 bales, bringing total exports to date to 817,300 bales, compared with the 617,300 at the comparable point in the ’06-07 marketing year.
|Prices Effective: Aug. 24-30, '07|