Cotton's Week: November 16, 2007

The Senate has had the ’07 farm legislation under consideration but leaders have been unable to reach agreement on a procedure to consider more than 250 amendments which have been filed.

Leaders did reach agreement to limit amendments to those filed as of Nov. 14 but on Nov. 16, a Senate vote failed on cloture – a procedure which would have limited debate and required all amendments to be germane to the legislation. That effort to invoke cloture and limit debate on a substitute amendment to the House-passed measure (HR 2419) failed, 55-42, falling five votes short of the 60 needed. Four Republicans -- Grassley (IA), Thune (SD), Coleman (MN) and Gordon Smith (OR) -- joined 49 Democrats and two independents -- Sanders (VT) and Lieberman (CT) -- in voting for cloture.

When the Senate returns from Thanksgiving recess the week of Dec. 3, the Senators are expected to return to consideration of farm legislation. When amendments are considered, an amendment proposed by Sens. Grassley (R-IA) and Dorgan (R-ND) to set lower limitations on commodity program benefits and further restrict eligibility is likely to be one of the first to be offered.

The legislation unanimously approved by the Senate agriculture committee includes significant and responsible reform to payment limitations; however, the amendment to be offered by Sens. Grassley and Dorgan goes far beyond the Committee’s bipartisan approach by requiring direct attribution and limitations of $20,000 for direct payments, $30,000 for counter-cyclical payments, and $75,000 for marketing loan gains and loan deficiency, including marketing loan gains on any forfeited commodities. Separate limits for peanuts also would be eliminated by the Grassley-Dorgan amendment if approved.

A number of Republican members of the House introduced legislation to extend the provisions of the current farm bill through ’08.

NCC Chairman John Pucheu urged cotton producers to continue contacting Cotton Belt Senators during the Thanksgiving recess and urge them to act on the legislation reported by the agriculture committee and to oppose the Grassley-Dorgan amendment.

Pucheu said, “The House has approved a five-year farm bill with a commodity title that was unanimously supported by the members of the agriculture committee. The Senate has under consideration legislation which was also unanimously approved by the agriculture committee. Both bills include important improvements to the cotton program, including assistance for our domestic mills, and responsible reform of payment limitations. We urge Congress to continue to work on legislation which will provide a workable safety net over the long term and to send the legislation to the President for his signature.”

The NCC, joined by more than 25 general farm and commodity organizations, has written Senators urging them to oppose the Lugar-Lautenberg amendment when work on the ’07 farm bill resumes in early December.

The Lugar-Lautenberg proposal, also known as the FRESH bill, is almost identical to a proposal by Reps. Flake (R-AZ) and Kind (D-WI) that was debated and soundly defeated during House consideration of the ’07 farm bill. The legislation would terminate the marketing loan and target price and phase out direct payments. The current safety net would be replaced by a federally-funded revenue insurance program and savings would be shifted to nutrition and conservation, which already receive more than 80% of farm bill spending under the legislation approved by the Senate agriculture committee.

The NCC joined several organizations on a letter to the director of the Office of Management and Budget (OMB) urging it to comply with statutory authority and apportion funds for the GSM-102 export credit guarantee program and other important agricultural export programs.

OMB thus far has refused to apportion funds for the GSM-102 program as well as the Foreign Market Development Program, the Market Assistance Program and the Emerging Markets Program.

The largely administrative task of apportioning funds apparently is being used by OMB to achieve policy goals at the expense of US agricultural exports and US producers.

The letter cited several recent agricultural export sales that were missed because of the lack of availability of GSM-102 credit guarantees and urged OMB to cease blocking implementation of agricultural export programs that are fully authorized and appropriately funded by Congress.

The NCC and National Cotton Ginners Assoc. (NCGA) submitted comments to EPA in response to EPA’s document titled “Emissions Factor Uncertainty Assessment,” which recommends the use of a mathematical uncertainty factor to inflate current AP-42 emission factors for cotton gins and other agricultural sources and could be used as EPA guidance to states. NCC and NCGA also support more detailed comments by the industry coalition and Dr. Calvin Parnell, Texas A&M U.

If this becomes EPA guidance, it could result in the AP-42 values for cotton gin PM₁₀ and PM_2.5 emissions being multiplied by a factor of as much as 2.7 to 3.9 to correct for alleged uncertainties in the underlying emissions data. This uncertainty multiplier has the potential for gins to be classed as major sources of PM emissions requiring Title V major source permits and new source review (NSR) requirements.

The comments opposed EPA’s use of this document on both technical issues and the policy implications of applying mathematical uncertainty analyses to air quality emission factors. AP-42 factors are used routinely for a wide variety of purposes by both federal and state regulators, including permit fee calculations, applicability determinations, dispersion modeling and compliance analyses. Additionally, the uncertainty assessment most likely would be used by federal EPA and state air pollution regulatory agencies to inflate existing AP-42 emission factors as part of guidance to states for implementation of air regulations.

The comments also pointed out that the current AP-42 emission factors for gins, when used in dispersion models of ambient air quality, already are inflated above actual ambient air measurements made recently by USDA researchers. The application of uncertainty multipliers would only exacerbate concerns with the accuracy of current AP-42 factors. This inaccuracy runs afoul of EPA’s legal obligations under the Clean Air Act and the Data Quality Act to obtain and rely on accurate emissions data where reasonably available.

The NCC is reminding companies involved in experimental and compatibility test programs that Dec. 15 is the deadline for submitting “Participating Gin/Warehouse” forms to the Joint Cotton Industry Bale Packaging Committee (JCIBPC). The companies also are reminded of the requirement to supply gins with experimental bale tags that tie all experimental or compatibility test program bales with a specific company before they deliver the test products to the gins.

JCIBPC Chairman Lee Tiller said, “Submitting the participating gin/warehouse forms in a timely manner is a longstanding policy that should be honored by the firms with test programs. It is crucial that the companies submit all forms as soon as possible.”

Submission of the participating gin/warehouse forms permits gins, warehouses and others who come in contact with materials being evaluated to report on the materials' performance. The forms also enable staff and others to provide the JCIBPC with good feedback on the performance of materials because that committee ultimately will determine a test program's fate.

Ginners who use materials in test programs and have received experimental tags from the company associated with the test program should not wait for additional instructions before placing the tags on the bales in the test program. In addition, ginners need not wait on the company to submit the proper participating gin/warehouse form for the materials they may use.

Ginners may go to the NCC Bale Packaging page, http://www.cotton.org/tech/bale/index.cfm, and complete the proper form. For an experimental test program product, choose the “2007 Participating Gin Warehouse Forms - for Bagging” link and for materials in a compatibility test program product, choose the “2007 Participating Gin Warehouse Forms - for Plastic Strap” link.

Once a form is submitted, the company with the test program, the ginner and the warehouse will receive an email from NCC staff explaining what the ginner needs to know regarding bales in JCIBPC sanctioned test programs. Any questions, please contact Dale Thompson at 901.274.9030.

Programming for the ’08 Beltwide Cotton Conferences will be posted at the Beltwide’s web site, http://beltwide.cotton.org on Dec. 3. The forum, themed “Orchestrate Your Opportunities,” is set for Jan. 8-11 at the Gaylord Opryland Resort & Convention Center in Nashville.

“We want to encourage producers and other related cotton industry individuals to visit the web site to learn more about the conferences,” said Bill Robertson, NCC staffer coordinating the programming. “Those who plan to attend are also encouraged to register and make their hotel reservations now.”

Meeting registration and hotel reservations are made online at the Beltwide web site. Those without Internet access or those needing assistance may call 901.274.9030 and ask for the Beltwide Help Desk.

Robertson said a number of Cotton Production Conference sessions have been developed which include heightened producer involvement to help address challenges and identify opportunities for the ’08 season. Among those are herbicide resistance management, onboard moduling systems on the Case IH and John Deere cotton pickers, and reflections on the ’07 production season.

A standard that requires employers to pay for employee personal protective equipment (PPE) was published by the Occupational Safety and Health Administration (OSHA) 72 Federal Register 64342), eight years after it was first proposed.

The rule affects occupational safety and health standards for general industry, marine and construction but not agriculture. Agriculture could be covered under the general duty clause. The rule is effective Feb. 2, ’08 and must be implemented by May 15, ’08.

In promulgating the rule, OSHA concluded that the OSH Act requires employers to pay for PPE that is necessary to protect the safety and health of their employees. Employers for nearly all industries currently pay for more than 90% of their employees' PPE. The standard only requires employers to provide and pay for PPE where it is already required by specific standards.

There are exceptions in the limited cases specified in the standard. The limited cases that are exceptions to the rule include: non-specialty safety-toe protective footwear and non-specialty prescription safety eyewear if the employer permits such items to be worn off the job site. "Everyday clothing," such as long-sleeved shirts, long pants, street shoes and normal work boots, or "ordinary clothing," skin creams or other items used solely for protection from the weather, such as winter coats, jackets, gloves, parkas, rubber boots and hats do not have to be provided by the employer. Lost or intentionally damaged PPE does not have to be replaced at the employer's cost.

Net export sales for the week ending Nov. 8 were 164,200 bales (480-lb). This brings total ’07-08 sales to approximately 6.7 million bales. Total sales at the same point in the ’06-07 marketing year were approximately 4.6 million bales. Total new crop (’08-09) sales are 183,200 bales.

Shipments for the week were 194,200 bales, bringing total exports to date to 3.8 million bales, compared with the 1.9 million bales at the comparable point in the ’06-07 marketing year.

Adjusted World Price, SLM 11/16	55.31 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	10.39 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 3135 c.i.f. Northern Europe	71.83 cents
Forward 3135 c.i.f. Northern Europe	NA
Coarse Count c.i.f. Northern Europe	69.84 cents
Current US c.i.f. Northern Europe	70.95 cents
Forward US c.i.f. Northern Europe	NA
2007-08 Weighted Marketing-Year Average Farm Price
Year-to-Date (August-September)	46.14 cents	**
**August-July average price used in determination of counter-cyclical payment