|WTO Negotiations Could Undermine Farm Bill Efforts|
NCC Chairman Larry McClendon said the NCC will continue to work closely with Congress to ensure final passage and implementation of the farm bill and a successful conclusion to the World Trade Organization (WTO) Doha negotiations.
Addressing a large crowd at the Southern Cotton Ginners Assoc. Ag Update in Memphis, McClendon recapped the NCC’s two-year efforts to develop sound farm policy that would: 1) provide a solid safety net for producers, 2) ensure competitive prices in the international market, 3) align provisions of the upland cotton marketing loan with market signals and 4) streamline the flow of cotton to the marketplace. He said the NCC also sought to avoid any tightening of payment limits or increased standards for eligibility for program benefits. Additionally, a safety net of unlimited access to a marketing loan with redemption at the adjusted world price, a counter-cyclical payment decoupled from production, and the direct payment are the cornerstones of cotton policy.
“The farm bills in the House and Senate largely reflect the provisions sought by the Council,” he stated. “The Council has urged Conferees to include reforms that are part of the House or Senate bills in the new farm bill.”
The Arkansas ginner said the NCC also has strongly urged Conferees to continue to reject proposals by the Administration and others for more extreme changes to Adjusted Gross Income (AGI) means tests that carry unknown consequences.
“We also believe that any new rules should be gradually phased-in to allow growers, land owners and lenders to adjust to the new rules and regulations,” he said.
McClendon said the remaining contentious issues between the House and Senate bills and between Congress and the Administration are: 1) the farm bill funding level above the budget base line determination and the revenue source for that funding and 2) the Administration’s pressing for additional payment eligibility reform, especially AGI means test provisions.
McClendon also warned that WTO negotiations may overshadow the US cotton industry’s two-year effort on delivering sound policy in new farm legislation.
He said the US agricultural community has been largely supportive of its trade negotiators’ aggressiveness in the WTO Doha Round – even the proposed significant cuts in domestic agricultural support programs.
“But we stated from the very outset that such large cuts in support would only be acceptable if there were real, significant gains in market access,” he said. “We warned our negotiators in 2006 that other countries were pocketing U.S. proposals and demanding more cuts in agricultural support while retreating on market access.”
McClendon, who met last fall with WTO Agricultural Negotiations Chairman Crawford Falconer, said Falconer’s two draft negotiating texts include significant specific ranges of cuts for various types of domestic support but “little in the way of specifics on increased market access.” The texts, he noted, include a section that demands that the United States reduce its cotton program expenditures by more than 90% from recent spending levels. The most recent draft contains market access provisions that “are riddled with exceptions that could easily allow a developing country to exempt most of its trade from real increases in market access.”
The NCC chairman called on USDA to provide US agriculture with a clear analysis of exactly what gains U.S. agriculture can expect in market access under these draft negotiating texts.
“It is incumbent on the negotiators to demonstrate that whatever gains that have been won in market access are at least as large as the sacrifices in the safety net for U.S. producers,” McClendon said.
McClendon told attendees that the NCC also has been clear in all communications with US negotiators -- that cotton’s market access improvement will be measured by changes in China.
“To this point in the negotiations it appears that China will have very little to do in meeting their market access commitments with regard to cotton,” he said.
|Andean Trade Program Extended|
The Senate approved a 10-month extension of the Andean trade preferences program one day before scheduled expiration. The Senate cleared the legislation to extend the duty-free treatment for products entering the United States from Peru, Colombia, Bolivia and Ecuador by voice vote. The House approved the legislation a day earlier.
The short extension is designed to maintain pressure on Congress to approve the Colombian Free Trade Agreement (FTA) which has been delayed by objections by some members over labor rights in Colombia.
Sen. Grassley (R-IA) has been reluctant to approve an extension of the preferential access for all four countries because of his concern about Ecuador and Bolivia, which have nationalized assets belonging to US firms.
The NCC and the National Council of Textile Organizations (NCTO) urged Congress to approve the extension to avoid disruption in trade in fiber, yarn, textile and apparel products between the US and Andean countries.
While the Peru FTA has been approved, it has not been fully implemented and made operational and the Colombian FTA has yet to be considered by Congress though negotiations are complete. NCC and NCTO have continued to urge prompt passage of the Colombian FTA.
|Glauber Chosen USDA Chief Economist|
Agriculture Secretary Ed Schafer announced the selection of Dr. Joseph Glauber as USDA chief economist. Glauber has served as acting chief economist since the Jan. 3, ’08 retirement of Dr. Keith Collins.
"I am pleased that Joe Glauber's thoughtful contributions will continue to guide USDA's informed decision-making for the continued betterment of American agriculture," Schafer said. "Joe is highly-regarded for his thorough analysis and insight and well-prepared for the demands of this post through 15 years of demonstrated strength in agricultural economics as USDA Deputy Chief Economist."
As chief economist, Glauber is responsible for USDA's agricultural forecasts and projections and for advising the Secretary of Agriculture on economic implications of alternative programs, regulations and legislative proposals. His responsibilities include the Office of the Chief Economist, the World Agricultural Outlook Board, the Office of Risk Assessment and Cost-Benefit analysis, the Global Change Program Office, and the Office of Energy Policy and New Uses.
Glauber received his Ph.D. in agricultural economics from the U. of Wisconsin in ’84 and holds an AB in anthropology from the U. of Chicago.
|Sales Steady, Shipments Slip|
Net export sales for the week ending Feb. 21 were 219,800 bales (480-lb). This brings total ’07-08 sales to approximately 10.5 million. Total sales at the same point in the ’06-07 marketing year were approximately 8.2 million bales. Total new crop (’08-09) sales are 428,700 bales.
Shipments for the week were 189,200 bales, bringing total exports to date to 6.9 million bales, compared with the 4.6 million bales at the comparable point in the ‘06-07 marketing year.
|JCIBPC Meets in Memphis|
The Joint Cotton Industry Bale Packaging Committee (JCIBPC) reviewed the Specifications for Cotton Bale Packaging Materials. NCC staff provided reports on JCIBPC ’07 test programs.
The JCIBPC directed its Specifications Review Committee to: (1) add to specifications “Certificates of Analysis” reporting requirements covering bagging and ties; (2) remove from the specifications hot blade weld technology as an approved method for applying polyester plastic strapping (PET); (3) add language to the specifications for 100% cotton bale bags that covers identification, inspection, certification and test methods; and (4) not allow any colored yarns in fabrics intended for use as burlap bags. The JCIBPC also agreed to consider a phase out of burlap as an approved material within two to three years.
During the executive session, the JCIBPC approved a new circular woven polypropylene fabric construction. It also extended and expanded experimental test programs for: (1) the IFP 100% woven cotton bale bag with a 1.9 pound tare weight; (2) the Propex Fabrics Inc. spiral sewn woven polypropylene bale bag with a modified construction; and (3) the Langston Company 100% woven cotton bale bag with a two pound tare weight. A compatibility test program for PET plastic strapping was extended and expanded for Mallis Strapping Systems.
In a separate action, the JCIBPC strongly encouraged all gins using materials approved for use in experimental test programs to recess their bale ties. Recessed bale ties already are required for all fully automated bale tying systems. The Committee also urged all gins using materials in test programs to keep and provide the testing firm with a bale tag list when their test products are used. Tag lists are needed by NCC staff to better monitor the performance of tested materials.
|Ginner School Registration Open|
Registration is open for ’08 Ginner Schools. Dates for the schools are: Southwest Ginners School, Lubbock, TX – March 31-April 2; Western Ginners School, Las Cruces, NM - May 13-15; and Stoneville Ginners School, Stoneville, MS – June 17-19. Registration information can be found at http://ncga.cotton.org.
National Cotton Ginners Assoc. (NCGA) Executive Vice President Harrison Ashley said each level of Ginner Schools’ coursework is built on the previous level of instruction, with Level I as the foundation. Thus, beginning students, regardless of gin experience, are encouraged to start with Level I.
Level I courses are: Introduction to Cotton Ginning and the Industry; Maintenance of Auxiliary Gin Components; Basic Hydraulics; Basic Gin Safety; Maintenance and Adjustments for Seed Cotton Cleaners, Gin Stands, and Lint Cleaners; Air Utilization and Drying; and Electricity in the Gin.
The Level II offerings include: Purpose and Operating Principles of Individual
Level III features: Review of Functions of a Ginning System; Electrical Systems; Air Systems in the Gin; Drying and Moisture Restoration Systems; Matching Machinery Capacities in the System; Seed Cotton Unloading Systems and Management of Seed Cotton Handling Systems; Bale Presses and Hydraulic Systems; Safety Programs and Labor Regulations; Cottonseed Handling Systems; and Roller Ginning (at the Western School only).
All schools also will feature continuing education (CE) courses. The CE courses include a panel discussion of PLC controllers and electrical components; a panel discussion on harvesting equipment and ginning of modules produced by on-board moduling systems; and safety training. The CE course at Lubbock also will include an overview of spindled harvesting. The Mesilla Park school will offer high speed roller ginning and the Stoneville School will feature a gin maintenance program. First aid training will be offered only at the Southwest School.
School cooperators include NCC; NCGA and its member associations; USDA-ARS; USDA Extension Service;, Cotton Incorporated; gin machinery/equipment manufacturers/suppliers; Cooperative State Research, Education and Extension Service; and select land grant universities.
|Mill Cotton Use Steady|
According to the Commerce Dept., January (five-week month) total cotton consumption in domestic mills was 210.3 million pounds for a seasonally adjusted annualized rate of 4.68 million bales (480-lb). Last year’s January annualized rate was 4.97 million bales.
The December (five-week month) estimate of domestic mill use of cotton was raised by 1.0 million pounds to 180.0 million pounds. The revised seasonally adjusted annualized rate of consumption for December is 4.74 million 480-pound bales. This is slightly more than last year’s December annualized rate of 4.73 million bales.
Using the latest figures from Commerce, calendar ’07 mill use is estimated to be 2.32 billion pounds or 4.83 million bales. This is lower than calendar year ’06’s use of 5.46 million bales.
Based on Commerce estimates from Aug. 1, ’07, through Feb. 2, ’08, projected total pounds consumed during crop year ’07-08 would be 2.3 billion pounds or 4.73 million bales. USDA’s latest estimate of ’07-08 crop year mill use is 4.6 million bales.
Preliminary February domestic mill use of cotton and revised January figures will be released by Commerce on March 27.
|Prices Effective Feb. 29-March 6, '08|