Cotton's Week: January 11, 2008

Cotton's Week: January 11, 2008

phytogen

™®Trademarks of Dow AgroSciences, DuPont or Pioneer and their affiliated companies or their respective owners. ®PhytoGen and the PhytoGen Logo are trademarks of PhytoGen Seed Company, LLC. PhytoGen Seed Company is a joint venture between Mycogen Corporation, an affiliate of Dow AgroSciences LLC, and the J.G. Boswell Company. The Enlist weed control system is owned and developed by Dow AgroSciences LLC. Enlist Duo® and Enlist One herbicides are not yet registered for use in all states or counties. Contact your state pesticide regulatory agency to determine if a product is registered for sale or use in your area. Enlist Duo and Enlist One herbicides are the only 2,4-D product authorized for use on Enlist crops. Consult Enlist herbicide labels for weed species controlled. Always read and follow label directions.
’08 Beltwide Draws 3,000 Attendees

During his review of key industry issues, NCC Chairman John Pucheu told attendees at the ’08 Beltwide Cotton Conferences that he believes the US cotton industry has excellent prospects for achieving profitable cotton production and processing. His and other reports are available on the NCC’s web site at http://www.cotton.org/news/meetings/2008bw/index.cfm.

“Research, education and technology transfer continue to be critically important,” Pucheu said. “I assure you that the Council will continue its longstanding commitment of its resources for technology development and transfer and bringing resolution to the technology-based priorities.

More than 3,000 attended the forum at the Gaylord Opryland Resort & Convention Center in Nashville.

In an outline of the development, progress and future timetable of the new farm law, NCC Senior Vice President, Washington Operations John Maguire told attendees that House and Senate commodity titles include provisions that were recommended by NCC leaders to improve market orientation, enhance competitiveness, add value, improve flow and assist domestic manufacturers.

“Unfortunately, due to a shortage of funding, the projected increased costs of the improvements necessitated a slight reduction in target price to generate savings necessary to pay for changes as required by budget rules,” Maguire said. “Council leaders will continue to work closely with Congressional leaders to ensure that the cotton title of the new legislation includes provisions which allow the industry to successfully adjust to new market conditions.”

He said the House and Senate bills include provisions which will lead to significant changes in payment rules and regulations. Both bills eliminate the three-entity rule while allowing spouses to qualify as separate persons for payment limits. The bills have slightly different limits for direct and counter-cyclical payments and both terminate certificate redemptions, but also eliminate limits on marketing loan gains and loan deficiency payments.   The bills modify the Adjusted Gross Income test. The House establishes a cap of $1 million above which individuals lose program eligibility. The Senate gradually lowers the $2.5 million to $75,000 by ’10, but exempts those who earn more than 66⅔% of their income from farming, ranching or forestry.

He said House and Senate leaders have expressed a strong desire to complete work by early February, and the NCC has joined other organizations in urging prompt passage so farmers have information before making final cropping decisions. The Administration, through Acting USDA Secretary Conner, has continued to threaten to veto legislation that includes tax provisions and fails to achieve significant reform to payment limitations.

In an economic update, NCC Vice President of Economics & Policy Analysis Dr. Gary Adams said that current economics continue to show strong competition for available acres in ‘08. In addition to the economic signals, there are also concerns about water availability in California that could lower acres.

“While there are ample reasons to expect acres to fall further in ’08, there are also some factors that could limit further declines,” Adams said. “First, there were significant shifts in ’07 and growers with vertical investments in gins and warehouses might be reluctant to make another significant reduction in cotton acreage. Second, in a number of counties, crop insurance data show shifts of 50,000 acres out of cotton and into grains. It may be the case that much of the ’08 adjustment occurs on those same acres. In other words, we could see those acres now shift from grain into a double crop of wheat and soybeans.”

Adams said intentions will be clarified more following the NCC’s annual survey of cotton acreage intentions, to be released on Feb. 8.

The economist said if current estimates are accurate, the ‘07 marketing year will be the first in five years with global consumption significantly above production. Even if there is a slowdown in the demand, that relationship should hold true in ’08 as well. The result would be further tightening of the balance sheet.

Cotton Incorporated President/CEO Berrye Worsham focused his report on one of six of that organization’s objectives – sustainability. He said Cotton Incorporated will continue researching, developing data and communicating cotton’s improvements – US cotton’s in particular – in sustainability to both consumers and to the industry.

“If the day comes when the eco-issues are important in the consumer buying process for apparel and home textiles, we want cotton positioned as the “eco-choice: for consumers,” Worsham said. “In this process, we want to avoid costly certification and undue regulatory constraints.”

He also pointed to efforts with NCC and Cotton Council International (CCI) in conjunction with corn, wheat and soybeans associations and technology providers to ensure that sound science – not preconceived opinions -- drives private organizations’ defining of sustainability standards.  

In a briefing for news media, CCI President Michael Adams said global demand for cotton has risen more than 36 million bales (39%) since ’00 and export demand for US cotton fiber responded by rising to an estimated 16.2 million bales in ’07 -- a 140% increase from ’00.

“No one has done more than the US cotton industry in stimulating demand and bringing attention to the importance of cotton in the global economy,” the cooperative official said. “CCI will continue to partner with Cotton Incorporated and local industry to find ways to keep cotton attractive and interesting to the consumer, particularly in major developing countries like India and China where overall fiber demand will grow strongly at both the mill and consumer levels.”



Paterson Gets Genetics Award

Dr. Andrew H. Paterson, a research professor in the U. of Georgia’s Crop and Soil Sciences and its Genetics departments, is the recipient of the ’07 Cotton Genetics Research Award. He was recognized during the Beltwide Cotton Improvement Conference and received $1,000.

Paterson is an internationally recognized authority in plant genomics, and his contributions to cotton genetics, genomics, cytogenetics and breeding have been significant.

Among other award winners recognized at the conferences were: 1) Dr. Robert G. Lemon,  professor and Texas AgriLife Extension Service agronomist for cotton with Texas A&M U., as the ’07 Extension Cotton Specialist of the Year, an award sponsored by Bayer CropSciences and 2) Danny Moore of Marion, AR, the ’07 Cotton Consultant of the Year, an award sponsored by Syngenta and Cotton Farming magazine. (See 1/04 Cotton’s Week for the High Cotton and Cotton Achievement Award recipients).



USDA Sees 19.03 Million Bales

In its January report, USDA estimated the ’07-08 US crop at 19.03 million bales. Upland production was estimated at 18.21 million bales and ELS production at 825,000 bales. Harvested area was an estimated 10.49 million acres implying a non-harvested area of 338,000 acres based on USDA’s acreage report. The resulting abandonment rate is roughly 3.12%. The national average yield per harvested acre was estimated to be 871 pounds, 90 pounds above the five-year average. If realized, the yield will be the largest on record, surpassing the previous record of 855 pounds per acre set in ’04.

On a regional basis, the Southeast crop is estimated at 3.21 million bales based on harvested acres of 2.17 million and a regional average yield of 711 pounds, 6 pounds above the five-year average for the region. In the Mid-South expected production is 5.29 million bales. Harvested area is estimated to be 2.72 million acres with an expected yield of 931 pounds per harvested acre. The Southwest upland crop is an estimated 8.48 million bales. Expected harvested area is 4.91 million acres and the regional average yield is 829 pounds per harvested acre. Upland production in the West is an estimated 1.24 million bales with a harvested area of 404,000 acres and a regional average yield of 1,471 pounds per harvested acre, 131 pounds above their five-year average.

The ELS crop is an estimated 825,000 bales. Harvested area is pegged at 288,000 acres with an average yield of 1,374 pounds per harvested acre.

U.S. Cotton Crop, 2007-08

 

PLANTED

ACRES

Thou.

HARV.

ACRES

Thou.

YIELD PER

HARV.

ACRE

Lb.

5-YEAR

AVG.

YIELD

Lb.

480-

POUND

BALES

Thou.

UPLAND

 

 

 

 

 

SOUTHEAST

2,255  

2,168 

711  

705 

3,210  

   Alabama

400  

385 

499  

664 

400  

   Florida

85  

81 

652  

636 

110  

   Georgia

1,030  

995 

796  

734 

1,650  

   North Carolina

500  

490 

769  

695 

785  

   South Carolina

180  

158 

486  

679 

160  

   Virginia

60  

59 

854  

745 

105  

MID-SOUTH

2,750  

2,724 

931  

914 

5,285  

   Arkansas

860  

850 

1,062  

995 

1,880  

   Louisiana

335  

330 

1,004  

879 

690  

   Mississippi

660  

655 

975  

888 

1,330  

   Missouri

380  

379 

975  

925 

770  

   Tennessee

515  

510 

579  

853 

615  

SOUTHWEST

5,122  

4,908 

829  

628 

8,475  

   Kansas

47  

43 

558  

524  

50  

   Oklahoma

175  

165 

945  

639 

325  

   Texas

4,900  

4,700 

827  

630 

8,100  

WEST

411  

404 

1,471  

1,340 

1,238  

   Arizona

170  

168 

1,429  

1,357 

500  

   California

195  

194 

1,559  

1,381 

630  

   New Mexico

46  

42 

1,234  

897 

108  

TOTAL UPLAND

10,538  

10,204 

857  

772 

18,208  

TOTAL ELS

292  

288 

1,374  

1,239 

825  

   Arizona

3  

960  

931 

5  

   California

260  

257 

1,419  

1,296 

760  

   New Mexico

5  

1,123  

904 

11  

   Texas

25  

24 

980  

906 

49  

ALL COTTON

10,830  

10,492 

871  

781 

19,033  

Source: USDA-NASS January Crop Production Report.



Mill Use Unchanged, Exports Slip

USDA’s January report projected US ’07-08 mill use unchanged from the previous month at 4.60 million bales while exports were down 200,000 bales to 16.00 million bales. This generates an ending stocks value of 7.90 million bales and a projected stocks-to-use use ratio of 38.3%.

The report lowered ’07-08 world production by 510,000 bales to 118.25 million bales from December’s report. The beginning stocks estimate was lowered 200,000 bales to 60.76 million bales. Projected world mill use was decreased 250,000 bales to 128.02 million bales. The projected world ending stocks for ’07-08 is now pegged at 54.75 million bales for a corresponding stocks-to-use ratio of 42.8%.


CCI Showcases US Cotton

US cotton and cotton products were promoted at Heimtexil, regarded as the world’s largest home furnishings show. Held in Frankfurt, Germany, the event drew 2,844 exhibitors from 65 countries. CCI’s COTTON USA pavilion also featured Cotton Incorporated services and Supima. The booth included high quality products from 17 COTTON USA licensees from around the world.

The event received high praise from participants who were impressed at the international reach of the gathering. Visitor flow at the pavilion was heavy on all days, giving CCI, Cotton Incorporated and Supima numerous opportunities to meet with current and prospective COTTON USA licensees.



Sales Weak, Shipments Steady

Net export sales for the week ending Jan. 3 were 70,600 bales (480-lb). This brings total ’07-08 sales to about 8.3 million bales. Total sales at the same point in the ’06-07 marketing year were about 6.3 million bales. Total new crop (’08-09) sales are 222,500 bales.

Shipments were 198,500 bales, bringing total exports to date to 5.4 million bales, compared with the 3.3 million bales at the comparable point in the ’06-07 marketing year.


Prices Effective Jan. 11–17, ’08

Adjusted World Price, SLM 11/16

57.37 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

73.89 cents

Forward 3135 c.i.f. Northern Europe

NA

Coarse Count c.i.f. Northern Europe

NA

Current US c.i.f. Northern Europe

75.00 cents

Forward US c.i.f. Northern Europe

NA

 
'07-08 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-November)

51.53 cents

**

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

Sponsored by
Dow AgroSciences