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|Senate Farm Bill Consideration Slowed|
Senate consideration of new farm legislation was slowed by disagreement over amendments.
The Senate has conducted several hours of general debate since the Senate Agriculture, Nutrition & Forestry Committee-approved legislation was introduced. No amendments have been voted on while Senate leaders attempt to negotiate an agreement on the amendments to be considered.
Senate Majority Leader Reid (D-NV) used a procedural maneuver designed to limit amendments. Minority Leader McConnell (R-KY) said the move “gridlocked” the Senate. The Senate turned to other business while leaders attempted to negotiate an agreement on how to move forward.
One of the pending amendments that ultimately will be considered is authored by Sens. Grassley (R-IA) and Dorgan (D-ND). It would change the Committee-passed payment limitation provisions to establish limits of $20,000 for Direct Payments; $30,000 for Counter-Cyclical Payments; and $75,000 for market loan gains (MLGs) and loan deficiency payments. The separate limits for peanuts would be eliminated. The difference between the loan value and market value (if lower) for any forfeited commodities would be included in the new $75,000 limit on MLGs. Once the limit is reached, producers would be required to repay the loan at full principal regardless of the market value. The amendment also modifies the determination of “actively engaged in farming” and retains the provision which combines spouses for payment purposes.
The amendment does not include a change in the Committee’s adjusted gross income test, but Sen. Klobuchar (D-MN) has indicated she will offer an amendment to establish the adjusted gross income test at $750,000. Under her proposal, commodity program benefits would be denied to anyone with an AGI exceeding that level even if 66 2/3% is derived from farming, ranching and forestry. Her amendment would not use the AGI to determine eligibility for conservation program benefits.
Other amendments expected to be offered include an amendment by Sens. Lugar (R-IN) and Lautenberg (D-NJ), which is similar to the Kind-Flake proposal defeated in the House, and an amendment by Sen. Brown (D-OH) to modify the crop insurance program to reduce costs.
Sens. Chambliss (R-GA), Lincoln (D-AR), Cochran (R-MS), Landrieu (D-LA), Vitter (R-LA), Lott (R-MS) and Pryor (D-AR) continue to urge their colleagues to oppose the Grassley-Dorgan amendment given its disproportionate adverse impact on Sunbelt agriculture and in consideration of the substantial reforms included in the Committee-passed bill.The Senate is expected to return to debate on the farm bill on Nov. 13. The Administration has issued a veto threat objecting to so-called budget gimmicks, increases in loans and target prices, and the absence of meaningful payment limit reforms. Acting Secretary Conner continues to call for a $200,000 adjusted gross income test.
|Sen. Chambliss Delivers Rebuttal|
Sen. Chambliss (R-GA) took the Senate floor and delivered a stinging rebuttal to an editorial in The Washington Post criticizing the US cotton program and its impact on W. Africa -- pointing out numerous inaccuracies in the article authored by former White House official Mark Gerson.
Sen. Chambliss explained that US acreage has declined while cotton acreage and production in China, India and Brazil have increased substantially. He further explained that the US cotton industry is not just comprised of farmers, but includes manufacturers, ginners, merchants, cooperatives, warehouses, cottonseed distributors and numerous businesses involved in production, distribution and processing of cotton and cotton products. He concluded by explaining that the US is not ignoring the situation in W. Africa, but, in fact, is involved in numerous outreach efforts to assist residents of those countries through US-AID and the Millennium Challenge Corp.
Sen. Chambliss’ floor speech can be found at http://agriculture.senate.gov and a copy of a news release issued by his office along with audio and video excerpts of his floor speech can be found on the NCC’s web site at http://www.cotton.org/issues/2007/chamrebut.cfm.
NCC Chairman John Pucheu expressed appreciation of all those involved in the cotton industry to Sen. Chambliss for taking time to set the record straight.
“Our growers, processors and support industries who depend on a robust industry for their livelihood and who contribute to our nation’s economy are deeply appreciative to Senator Chambliss for setting the record straight,” Pucheu said. “We are not unmindful of the plight of the West African people as demonstrated by our support for efforts to help them help themselves. Unfortunately, our hardworking growers are not afforded equal opportunity to rebut inaccurate media reports so the efforts of a respected leader like Senator Chambliss to set the record straight are appreciated.”NCC President/CEO Mark Lange also sent letters to the editor in response to that Post editorial and to an earlier editorial in The Wall Street Journal.
|Tobacco, Cotton Programs Consolidated|
USDA Agricultural Marketing Service (AMS) Deputy Administrator Darryl Earnest has written to advise that effective Nov. 9, the consolidation of the tobacco and cotton programs will form the new “AMS Cotton and Tobacco Programs.”
The Fair and Equitable Tobacco Transition Act of 2004 eliminated tobacco price supports and quotas and mandatory inspection and grading as well. As a result of the greatly diminished services required by tobacco, AMS decided to merge the Tobacco Program with the Cotton Program. Earnest said in his letter, “The consolidation of the two programs will in no way change the type or level of quality services offered to both industries….service, activities, budget, and fee structures will remain separate between the two program areas.”Earnest will serve as deputy administrator for the cotton and tobacco programs.
|Peru FTA Bill Approved|
Legislation (HR 3688) to implement the Peru Free Trade Agreement was approved by the House 285-132. The Senate is expected to approve the measure.
Upon enactment, 80% of US exports to Peru will enter duty-free, including cotton, beef, wheat and soybeans.The Peruvian FTA includes a yarn forward rule of origin that has long been supported by the US cotton and textile industries. Apparel products produced in Peru may enter the United States duty-free provided the yarn and fabric is manufactured in the United States or Peru. The NCC and the National Council of Textile Organizations have urged Congress to approve the FTA, which was signed in April ’06.
|President Urges FTA Support|
President George W. Bush hosted representatives of trade associations in agriculture, services and manufacturing at the White House Forum on Trade and Investment.
Representing the American Cotton Shippers Assoc. was their president, Andy Weil, who was joined by NCC President/CEO Mark Lange.
Participants heard from USTR Ambassador Sue Schwab, Treasury Secretary Henry Paulson and USDA Acting Secretary Chuck Conner on the importance of completing the Administration’s trade agenda with agreements on Peru, Colombia, Panama and S. Korea.President Bush addressed the group with the reminder that good trade agreements were one of the most effective tools against terrorism. The President urged attendees to communicate to their respective members that the free trade agreements now under consideration were in the nation’s best interests.
|USDA Sees Record US Yields|
In its November report, USDA estimates a national average yield per harvested acre of 859 pounds, 78 pounds above the five-year average. If realized, the yield average would be the greatest on record, surpassing the previous record of 855 pounds set in ’04.
The report projects a ’07-08 US crop of 18.9 million bales with Upland production of 18.1 million bales and ELS production at 812,000 bales. Harvested area is put at 10.5 acres implying a non-harvested area of 304,000 acres based on USDA’s acreage report. The resulting abandonment rate is roughly 2.80%.
State and regional estimates are shown in the following table.
|US Cotton Estimate Increased|
In its November report, USDA projected the ’07-08 US cotton crop to reach 18.86 million bales, up 710,000 bales from the October report. US mill use was unchanged at 4.60 million bales while exports were lowered 500,000 to 16.20 million bales. This generates a total ’07-08 offtake of 20.80 million bales. Ending stocks for ’07-08 are projected at 7.60 million bales for an ending stocks-to-use ratio of 36.5%.
For the ’06-07 crop year, USDA gauged US cotton production at 21.59 million bales. Estimated mill use was unchanged from the October report at 4.95 million bales. However, exports for both the ’06-07 and the ’05-06 crop year were revised this month to adjust for likely duplication in accounting for the ’05-06 end-of-season shipments.
Total offtake for the ’06-07 crop year is 17.96 million bales. This generates an ending stocks value of 9.48 million bales. The stocks-to-use ratio for the ’06-07 marketing year is 52.8%.
The USDA November report sees ’07-08 world production lowered 900,000 bales from the October report to 119.36 million bales. World mill use was lowered 260,000 bales from the October report to a projected 129.24 million bales. Consequently, world ending stocks for ’07-08 are projected to be 54.81 million bales for a stocks-to-use ratio of 42.4%.For the ’06-07 marketing year, USDA put world production at 121.94 million bales, down 170,000 bales from the October report. World mill use was lowered 20,000 bales to 123.29 million bales. World ending stocks on July 31, ’07 are now estimated at 60.83 million bales. This has a corresponding stocks-to-use ratio of 49.3%.
|Sales Surge, Shipments Steady|
Net export sales for the week ending Nov. 1 were 271,700 bales (480-lb). This brings total ’07-08 sales to slightly more than 6.5 million bales. Total sales at the same point in the ’06-07 marketing year were approximately 4.4 million bales. Total new crop (’08-09) sales are 173,200 bales.
Shipments were 188,000 bales, bringing total exports to date to 3.6 million bales, compared with the 1.8 million at the comparable point in the ’06-07 marketing year.
|Prices Effective Nov. 9-15, '07|