Cotton's Week: October 19, 2007

Cotton's Week: October 19, 2007

phytogen

Swift Action Urged on Farm Bill

The NCC joined with other commodity organizations on a letter today to Senate Agriculture, Nutrition and Forestry Committee Chairman Tom Harkin (D-IA) and that panel’s ranking member, Saxby Chambliss (R-GA) -- urging their prompt action on ’07 farm legislation.

Among other organizations signed onto the letter were those representing rice, wheat, peanuts, grain sorghum, soybeans, minor oilseeds, dairy and sugar, as well as the general farm organizations of American Farm Bureau Federation and the National Farmers Union.

The organizations stated they are encouraged about the Senate panel’s agreement on a framework on budget and policy options and urged the panel’s leaders to schedule a committee mark-up and floor consideration using that framework agreement as the basis.

“While each of our organizations may have concerns and questions about details of the framework agreement, particularly the relatively new version of a revenue option … we believe it is imperative that the Senate complete work on its version of new farm legislation so a conference committee can be appointed,” the letter stated.

The letter also noted that important provisions of current farm law have recently expired – and farmers and ranchers need to have policy in place in order to make well-informed financing, cropping and marketing decisions. “And it is important to farmers and ranchers, rural communities and other stakeholders to have conservation, nutrition, energy, risk management, trade, research and other policies in place as soon as possible,” the groups said.

Meanwhile, Sens. Harkin and Chambliss announced today the scheduling of an open business meeting of the Senate Agriculture Committee to consider and report out the ’07 farm bill. The meeting will take place Oct. 24, at 9:30 am EDT in room 328A of the Russell Senate Office Bldg. Summaries of all farm bill titles are available on the Committee’s web site at: http://agriculture.senate.gov/.



Ag Delegation Consults on Doha

NCC Chairman John Pucheu and William Gillon, the NCC’s International Trade attorney, joined a US agriculture delegation in Geneva to convey the message that a Doha Round agreement must contain significant gains in market access for US agricultural commodities or it faces uncertain support in the US Congress.

The delegation, which included representatives from the American Soybean Assoc. and National Milk Producer’s Federation, relayed the concern that US agriculture was being asked to make significant cuts in domestic support without receiving corresponding gains in market access. In meetings with representatives from several countries, including the EU, China, Brazil, Australia and Canada, as well as the Secretariat of the WTO, the group stated that a successful Doha Agreement needed US agricultural support and that support would not be forthcoming without a meaningful package providing for real increases in agricultural market access.

Pucheu stated that, “there seems to be too much emphasis being placed by some countries on balancing agricultural domestic support cuts with non-agricultural market access and not nearly enough attention being devoted to finding true balance between agricultural market access and domestic agricultural support. The agriculture agreement must itself be balanced. US agriculture must not be traded away in order to obtain gains in non-agricultural market access. It is critical that cotton and agriculture in general obtain greater access to foreign markets if we are to be asked to dramatically reduce our levels of domestic support.” 

It is expected that Crawford Falconer, chairman of the Agriculture Negotiating Group, will develop a revised negotiating text around mid-November. In addition to calling for significant cuts in US agricultural support, the July draft Falconer text contained draconian cuts specifically for cotton programs based on a cotton proposal tabled by four W. African countries. In Geneva, Chairman Pucheu consistently conveyed the NCC’s message that the cotton-specific text in the draft modalities was absolutely rejected. US Trade Representative Susan Schwab has stated that the cotton-specific provisions of the Falconer text are unacceptable.

NCC President Mark Lange commented, “there is still uncertainty surrounding commitments on reductions in overall agricultural domestic support. Those particular issues need to be solved before the US can evaluate the level of cuts called for by the general formula and the impact that further reductions on cotton might have.” 



Reps. Convey Doha Text Concerns

In a letter to US Trade Representative Susan Schwab, a group of 33 US Representatives cited serious concerns with the cotton language in the draft text released by WTO Agriculture Negotiating Chairman Falconer.

“While Ambassador Falconer's text is subject to ongoing negotiations, the treatment of cotton is unique and assumes a consensus opinion where there is none,” the letter stated. “Furthermore, the language ignores how best to address the underlying issues and help producers in four West African countries.”

The lawmakers say they believed Ambassador Falconer erred by failing to bracket the “cotton language.” Nowhere in the draft, they say, is there mention of the underlying distortions in the international cotton market and the efforts the United States has made, and continues to make, with initiatives such as the West Africa Cotton Improvement Program and the African Growth and Opportunity Act. Finally, given the agreement in the Hong Kong Declaration that any further cotton domestic support adjustments would be negotiated after an overall agriculture agreement is reached, the letter points out, “we are concerned the draft text creates added pressure for a separate cotton agreement in advance of an agriculture agreement.”

The Congressional Members stated, though, “While the benefits of a comprehensive and multilateral agreement are great, we cannot abandon a group of farmers who have operated within the parameters of a program written to comply with the Uruguay Round Agreement on Agriculture and the status of which continues to be adjudicated in the WTO's Dispute Settlement Body. Treating cotton differently than all other agriculture products in the Doha negotiations erodes our support for the WTO and the Administration's trade agenda. Simply stated, the cotton language in the Falconer text is unacceptable. The language must be changed significantly or we will have to seriously reconsider our possible support for a final Doha Agreement should one be reached.”


Disaster Program Sign-Up Begins

Eligible farmers who suffered quantity losses to their crops in recent years now can enroll in the Crop Disaster Program ’05- 07 (CDP) at local USDA Farm Service Agency (FSA) service centers. FSA will announce and conduct sign-up for quality losses under CDP as soon as possible.

Subject to final rules for the program, CDP provides benefits to farmers who suffered losses to the ’05-07 crops from natural disasters and related conditions so long as the actual crop lost was planted or prevented from being planted before Feb. 28, ’07.  Producers who incurred qualifying losses in ’05, ’06 or ’07 must choose only one year to receive benefits. Producers may apply for benefits for losses to multiple crops as long as the losses occurred in the same crop year.

Only producers who obtained crop insurance coverage or coverage under the Noninsured Crop Disaster Assistance Program (NAP) for the year of loss will be eligible for CDP benefits. Producers must have suffered quantity losses in excess of 35% to be eligible for CDP. The payment rate is set at 42% of the established price. Assistance, together with any crop insurance or NAP payment received for the same crop and including the value of the crop production not lost, must not exceed 95% of the total value of the crop absent the disaster.

FSA offices may accept information from producers about quality losses when producers submit applications for quantity losses. However, FSA only will consider quality loss applications complete after FSA announces the quality loss sign-up date and all other information necessary to determine eligibility is received by FSA. For more information about CDP and other disaster programs implemented by FSA, visit: http://disaster.fsa.usda.gov.



FSA Commodity Operations Chief Named

FSA Administrator Teresa Lasseter announced the appointment of Larry J. Adams as FSA's deputy administrator for Commodity Operations (DACO), effective Sept. 30, ’07.

The deputy administrator for commodity operations is responsible for developing policies and regulations for the dairy price support program; the storage, handling and disposition of Commodity Credit Corp. owned commodities; and for the export and domestic commodity donation programs. Under Adams' leadership, DACO produces a uniform regulatory system for the storage of agricultural products and ensures the timely provision of food products procured for domestic and international food assistance programs and market development programs.

Prior to this appointment, Adams was the assistant deputy administrator for farm programs for FSA.


Mayers To Lead Cotton Board

Cotton Board Chairman Nancy Marino announced that Drayton C. Mayers has been named president/CEO of the Memphis-based Cotton Board and will begin his duties in early December.  Prior to this appointment, Mayers was serving as Cotton Council International’s director for Southeast Asia and industry services.

“We are very pleased and excited that Drayton will be leading our staff in Memphis and governing the administrative activities of the Cotton Research and Promotion Program so it continues to lead to increased demand for and consumption of cotton,” Marino said.


’08 BWCC Programming Firming Up

The ’08 Beltwide Cotton Production Conference, to be held in January at the Gaylord Opryland Resort and Convention Center in Nashville under a theme of “Orchestrate Your Opportunities,” will offer attendees:  1) Extension cotton specialists reviewing challenges, including weather and pests, that producers dealt with during the ’07 season; 2) what has been learned – both pro and con – from the ’07 season; 3) herbicide resistance management efforts; 4) producers/ginners sharing their experiences and benefits with on-board module-building cotton pickers; 5) a progress report on strides made in breeding and US cotton fiber quality and 6) an update on the latest developments in farm and trade policy.

In addition, an economic outlook will be provided along with NCC Chairman John Pucheu’s update on industry issues and Cotton Incorporated CEO Berrye Worsham’s report on that organization’s key research activities.

Bill Robertson, the NCC’s manager, Agronomy, Soils and Physiology and coordinator of the Beltwide Cotton Production Conference, said the two-day Production Conference on Jan. 9-10 also will feature workshops and seminars with in-depth focus on season-long best management practices from an integrated pest management standpoint. Sessions on record-keeping and marketing tools/strategies also will be offered.

“We’re also working to attract more crop consultants to the meetings, including conducting a special consultant conference on January 8, because consultants are a very important group in helping producers with decision-making and with managing their operations,” Robertson said.

More information about the ’08 BWCC, including instructions for meeting registration and housing reservations, is available at http://www.cotton.org/beltwide.



Sales, Shipments Steady

Net export sales for the week ending Oct. 11 were 173,900 bales (480-lb). This brings total ’07-08 sales to slightly more than 5.8 million bales. Total sales at the same point in the ’06-07 marketing year were approximately 3.8 million bales. Total new crop (’08-09) sales are 155,300 bales.

Shipments for the week were 259,500 bales, bringing total exports to date to 3.1 million bales, compared with the 1.4 million bales at the comparable point in the ‘06-07 marketing year.


Prices Effective Oct. 19-25, 2007

Adjusted World Price, SLM 11/16

53.53 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

4.29 cents

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

70.05 cents

Forward 3135 c.i.f. Northern Europe

NA

Coarse Count c.i.f. Northern Europe

67.68 cents

Current US c.i.f. Northern Europe

70.00 cents

Forward US c.i.f. Northern Europe

NA

 
'06-07 Weighted Marketing-Year Average Farm Price  
 
Final Marketing-Year Average Price

46.50 cents

**

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

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