Cotton's Week: April 4, 2008

Farm bill policy discussions have progressed, but an agreement on funding continues to be elusive.

Reports indicate Congressional staff are meeting virtually around the clock and are making progress on identifying areas of agreement and issues to be decided by Members when a formal conference committee meets. However, there are also indications that leaders of the Ways and Means and Finance committees are having difficulty reaching agreement on a package of legislation that would provide an additional $10 billion to be added to the depleted baseline in order to move forward.

In addition to the difficulties of reaching an agreement on funding, it also appears some leaders in the House are disappointed in the allocation of funds to nutrition and conservation announced on March 24, even though nutrition receives an increase of $9.5 billion and conservation an increase of $4 billion over the current baseline. Some in the House complain that the increases are substantially less than those included in the House and Senate-passed bills and they object to the allocation of $4 billion to a new permanent disaster program.

During the week, Ways and Means Committee Chairman Rangel (D-NY) expressed his concerns with the funding allocations and said it was difficult to find agreement between the House, Senate and Administration on legislation needed to generate $10 billion for the farm bill. Negotiations were further slowed when Chairman Rangel had to return to New York during the week for medical treatment.

Negotiations on policy and budget will continue over the weekend as members are mindful of the looming April 19 deadline when the most recent extension of certain agriculture programs expires.

USDA’s March Prospective Plantings Report indicates US producers intend to plant 9.39 million acres of cotton in ’08/09, down 13.3% from the previous year. Upland area is projected to be 9.19 million acres, down 12.8% from ’07/08. ELS area is projected at 203,600 acres, a 30.3% decline.

USDA’s projection of 2.02 million acres in the Southeast represents a decrease of 10.3% from the previous year. In the Mid-South, projected plantings of 1.96 million acres represent a decline of 28.7%. A decrease of 3.7% is indicated for the Southwest. Prospective upland plantings in the West are projected to decline 34.5% from the previous year.

The NCC’s planting intention survey, released in early February, indicated US farmers intend to plant 9.32 million acres to upland cotton and 231,000 acres to ELS cotton.

President Bush announced his intention to nominate Commodity Futures Trade Commission’s Commissioner Bart Chilton to a new term expiring April 18, ’13 and Scott O’Malia to serve the remainder of a term expiring April 12, ’12.

Chilton was vice president at the National Farmers Union. He also served on the Farm Credit Administration and as deputy chief of staff to Dan Glickman, then secretary of agriculture. O’Malia currently serves as a clerk on the Senate Appropriations Energy and Water Development subcommittee. He has served in other staff positions in the Senate and was director of Government Affairs for the Mirant Corporations.

National Cotton Ginners Assoc. President Chris Breedlove told news media at a briefing in Lubbock that the USDA Cotton Ginning Lab there is important – not only to Texas cotton producers/ginners – but to the entire Cotton Belt.

Breedlove said the facility – slated for closure under the Administration’s currently proposed FY09 budget- is based in one of the largest cotton-producing areas in the world.

Among research work being conducted at the lab, Breedlove cited was: 1) quality issues related to mechanical stripper harvesting and ginning of cottons of the Southwest region, 2) development of more accurate methods of determining particulate emissions from gins and determining a scientific based emissions factor for harvesting equipment, 3) the efficiency of cotton harvesters containing onboard moduling technology and 4) techniques to improve the value and utility of gin byproducts.

Also participating in the briefing were Jim Bradford, president, Texas Cotton Ginners Assoc.; and Barry Evans, incoming president, Plains Cotton Growers. These organizations, along with the NCGA and NCC, will continue to communicate to the Administration the lab’s importance and the need for it to remain funded.

According to an article in The Journal of Commerce Online (http://www.joc.com/), US port-imposed container fees threaten the nation’s agricultural exports because of stiff price competition in global markets. Based on information from the Agriculture Transportation Coalition (AgTC), the article addresses the proliferation of port imposed container fees to fund infrastructure development and environmental initiatives.

The NCC is monitoring per-container fee increases because most cotton exports are delivered in containers when water transit is involved. In recent years, containers have provided a secure and efficient means for exporting cotton, cottonseed and cottonseed products.

Agricultural exporters have expressed opposition to the proliferation of fees at ports across the country. However, many prefer a fee that is based on the value of the contents in the container, if they must participate in funding infrastructure and environmental initiatives..

The model for a value-based fee is proposed in national legislation by Rep. Calvert (R-CA).  The intent of Calvert's proposed legislation is to ensure that low-margin products, such as agricultural exports, would not be priced out of the global marketplace.

In a related development, an email to trade associations from Erik Autor, vice president, international trade counsel, National Retail Federation, urged the associations to circulate a letter among their members concerning the fees and join a litigation effort opposing the fees. That letter in in the Technical area of the NCC's web site at http://www.cotton.org/tech/flow/index.cfm.

For additional information, contact Autor at 202-626-8104 or autore@nrf.com.

America’s Heartland is now reaching more than a million public TV viewers per episode nationwide with an additional 200,000 watching on RFD-TV. Viewer ratings are up 12% during the program’s third season.

Production already is underway on season four with airing beginning in September. A complete listing of stations and programming schedules can be found at www.americasheartland.com.

New on that site is an educational section with teaching tools and discussion guides complementing the segments of America’s Heartland, which now is partnering with the national Ag in the Classroom program.

The NCC, along with other commodity organizations, supports America’s Heartland, which is sponsored by the American Farm Bureau Federation and the Monsanto Company. The commodity groups help to identify and develop ideas for specific episodes and ways to publicize them.

USDA’s Agricultural Marketing Service (AMS) launched a newly redesigned web site at — http://www.ams.usda.gov.

AMS administrator Lloyd Day noted that although many of the web addresses for popular AMS pages will remain the same, customers should be aware that some addresses will change. If customers have bookmarks set, they may need to be reset after the change takes place.

AMS administers programs that facilitate the efficient, fair marketing of US agricultural products, including food, fiber, and specialty crops.

A joint Sino-US cotton technology exchange seminar in Qingdao was the first cooperation between USDA and the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ). The two shared information covering technical regulations and standards of cotton inspection, techniques of inspection, quality control systems, and current cotton quality status.

Yuan Changxiang, deputy director general of AQSIQ’s Dept. of Supervision and Inspection, and Darryl Earnest, deputy administrator of USDA-AMS, participated in the seminar along with cotton experts from the US and China inspection and quarantine delegates.

Four innovative Chinese designers will showcase their cotton fashions during Cotton Council International’s (CCI) and Cotton Incorporated’s ’08 “COTTON-BEYOND YOUR IMAGINATION^TM” Road Show in China.

The promotion program was launched in ’06 with the goal of educating Chinese consumers on cotton’s benefits and features www.cotton-imagination.com, a site with a range of information on cotton design and care.

The four designers will showcase their collections of cotton spring/summer, fall/winter and denim fashions to the public on the ’08 road show from May through Nov. ’08 in six major cities: Shanghai, Qingdao, Dalian, Guangzhou, Chengdu and Beijing.

Net export sales for the week ending March 27 were 278,300 bales (480-lb). This brings total ’07-08 sales to approximately 11.7 million bales. Total sales at the same point in the ’06-07 marketing year were approximately 9.9 million bales. Total new crop (’08-09) sales are 478,400 bales.

Shipments for the week were 255,700 bales, bringing total exports to date to 8.2 million bales, compared with the 5.9 million bales at the comparable point in the ’06-07 marketing year.