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|Farm Bill Talks Stalled|
Farm bill negotiations continue to be held up by a disagreement over inclusion of a package of agricultural tax relief measures and the spending offsets necessary to add $10 billion to the farm bill.
Conferees met publicly and privately throughout the week and despite reaching a tentative agreement on a budget framework that would add $10 billion to baseline spending, negotiations broke down over the offsets to be used and inclusion of tax provisions. The added funds would be used primarily to increase nutrition, conservation and specialty crop programs and to fund a permanent disaster program.
Despite agreeing on the budget, House conferees -- under instruction by the Speaker -- have rejected the Senate’s proposal to include a package of agriculture tax relief provisions valued at $2.5 billion.
In an informal counter offer discussed publicly during the conference meeting on April 18, the House proposed a $6 billion package of add-ons and a $1 billion tax package, an additional $500 million for nutrition and $2 billion for permanent disaster, coupled with a $1 billion reduction in commodity, crop insurance or conservation programs to add to an offset developed by the Ways & Means Committee. The total value of the House package would be $9.5 billion and the Senate tax measures would not be included. The tax package, developed by the Senate Finance Committee, includes a broad range of measures including conservation, endangered species recovery and numerous renewable energy provisions.
The House and Senate approved a one-week extension to April 25 of certain farm law provisions scheduled to expire April 18. The President signed the measure.
The Conferees met April 18 and agreed to reconvene April 22 at which time they expect the Ways and Means and Finance Committees to report they have reached agreement on the $10 billion in offsets and on the tax package. Chairman Harkin indicated it is his intention to begin voting on various proposals on Tuesday even if there is no agreement. During the week, they were able to reach agreement on most provisions in the trade and rural development titles.
|Appellate Body Hears Cotton Appeal|
An appellate body, which was formed to hear the US appeal in the Brazil–Cotton and Export Credit Guarantee case, held two days of oral hearings in Geneva.
The United States has appealed the findings of a Compliance Panel which determined that the United States had not complied with the original Dispute Settlement Panel’s opinion that the US cotton program caused “serious prejudice” to the interests of Brazil and that the US export credit guarantee program was a prohibited export subsidy with respect to certain unscheduled products.
While the United States filed a broad appeal, the WTO appellate body rarely reverses Panel findings of fact and normally restricts its review to matters of WTO law.
The two key questions in the Brazil case are whether the US cotton program caused “significant price suppression” in the world cotton market and whether the US export credit guarantee program long-term costs and losses are covered by premium charges.
A decision on the appeal is expected in late May or June.
|Doha Round Negotiations Continue|
Negotiations on an agricultural text within the Doha Round continued in Geneva.
The Agricultural Negotiating Group met to consider specific recommendations concerning the implementation of new tariff rate quotas to be applied to “sensitive products” within the agricultural market access discussions.
Smaller sessions among various countries and Crawford Falconer, chairman of the Agricultural Negotiations, have been ongoing for several months. Falconer will use the results of those smaller sessions and feedback from members gained in the meeting of the Agricultural Negotiating Group to develop a revised draft “modalities” text, which is expected the last week of April.
WTO Director General Pascal Lamy is urging countries to continue to close differences in the negotiating texts. He is anticipating a meeting of trade ministers the middle of May, after the revised modalities texts are issued. During that meeting, ministers are expected to begin a “horizontal” process in which agricultural concessions potentially will be leveraged in order to achieve gains in non-agricultural market access.
|Shipments Strong, Sales Slip|
Net export sales for the week ending April 10 were 147,700 bales (480-lb). This brings total ’07-08 sales to approximately 12.3 million bales. Total sales at the same point in the ’06-07 marketing year were roughly 11.1 million bales. Total new crop (’08-09) sales are 485,100 bales.
Shipments were 323,000 bales, bringing total exports to date to 8.8 million bales, compared with the 6.5 million bales at the comparable point in the ’06-07 marketing year.
|Coley Representing NCC in CFTC Forum|
Chuck Coley, a Georgia producer and chairman of the American Cotton Producers, will represent the NCC at a Commodities Futures Trading Commission (CFTC)-sponsored forum on agricultural futures markets in Washington, DC, on April 22.
Also participating in the forum will be representatives from the American Cotton Shippers Assoc. and AMCOT along with officials from the CFTC, USDA, Farm Credit Administration, Federal Reserve System and a broad spectrum of agricultural market participants.
Coley will stress cotton producers’ concern with the inability of the current cotton futures market to discover future prices with any historical correspondence to cash prices and to provide a hedging mechanism.
Coley states, “Cotton merchants are no longer offering forward contracts to producers because of extreme price risks. Therefore, as cotton prices have soared and plunged over the past month, producers, along with merchants, are merely bystanders. Not only have we been on the outside of the market, we are also deeply troubled about the impact this recent price volatility has had on the liquidity of buyers.”
He will urge the CFTC to use its authority and exercise its responsibility to protect market participants against manipulation and provide more transparency in trading. He will urge CFTC to apply the same speculative limits and reporting requirements to all market participants. He will recommended that CFTC consider increasing speculative position margins and disallowing any increase in speculative position limits. Also, the CFTC will be urged to recommend that the Intercontinental Exchange consider expanding certification delivery points and take measures that would ease certification costs.
Coley also will state, “Decisive action is needed in the short term to restore the confidence in the markets for producers and all segments to operate in this crop year. If this is not accomplished, the viability of the U.S. cotton industry is at stake.”
Those wishing to offer comments to CFTC or monitor the forum should go to the NCC’s home page, www.cotton.org, and refer to the first item.
|CSP Signup Begins|
Farmers and ranchers now can sign up through May 16 for the voluntary Natural Resources Conservation Service’s Conservation Security Program (CSP). CSP rewards and encourages the use of conservation practices such as strip cropping to protect natural resources.
This year, CSP payments will be available to 64,000 potentially eligible farms and ranches in 51 watersheds covering 23.7 million acres. That would bring the number of watersheds enrolled to 331 across the United States, covering 247.7 million acres.
|NASS Changes Cotton Survey|
USDA’s National Agricultural Statistics Service announced that the Cotton Objective Yield Survey will no longer be conducted in California. A grower-reported yield survey will continue to be conducted and will provide data used to establish monthly California cotton yield and production forecasts.
Upland cotton acreage in California has declined significantly in recent years, from 1.17 million acres in ’95 to 195,000 acres in ’07. California now accounts for less than 2% of the US upland cotton planted area.
Objective Yield Survey data will continue to be collected in Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas for upland cotton. These states accounted for 78% of the nation’s ’05–07 upland cotton production.
The Cotton Objective Yield Survey data are combined with grower reported yields and used by USDA's Agricultural Statistics Board to prepare upland cotton yield and production forecasts for release in the August through December Crop Production reports.
|BMP Workshops Raise Awareness|
Two Best Management Practices (BMPs) workshops held in Dumas, TX, and Lubbock, TX, provided attendees with an in-depth discussion of “The First Forty Days ™” early season BMPs.
The Lubbock session attracted producers and others highly involved in the decision making process which represented more than one million acres of High Plains' cotton. Dumas attendees represented more than 100,000 cotton acres north of the Canadian River.
Included was a focus on variety selection and arthropod/weed/nematode management. Texas AgriLife Extension Service specialists, Texas AgriLife Research and Texas Tech U. scientists also covered “Fruiting to Finish ™” BMPs including fertility, irrigation management and fiber quality -- particularly as quality is affected by harvest practices, i.e. stripper versus picker harvesting. Continuing education units were offered to attendees.
Much of the material presented at the workshops soon will be available online through the NCC’s cotton education program newsletter, Cotton Physiology Today. To subscribe to this newsletter, which is distributed by email, send a request to CPTNewsletter@cotton.org
|Tour Benefits US Cotton Sources|
Eighteen retailers and trading companies met 29 suppliers of US cotton-rich products from Southeast Asia during Cotton Council International’s (CCI) second COTTON USA Buyers Tour to Vietnam.
The weeklong event enabled buyers representing European, Japanese and US brands and retailers to explore the advantages of sourcing US cotton-rich garments from the strong textile economies across Southeast Asia, including the Korean, Taiwanese and US joint venture textile companies operating in Vietnam. CCI’s group of 18 buyers was the largest ever attending a COTTON USA Buyers Tour.
The Tour included: 1) an extensive briefing session that included introductions to CCI, Cotton Incorporated, the Vietnam Textile Assoc. and Mast Industries – which is the owner of Victoria Secret and the Limited Brands operating in Vietnam and 2) a trade show and 3) two days of visits to textile and garment manufacturers in Vietnam, where participants inspected each company’s manufacturing facilities to view US cotton-rich wovens, denims, knitwear, sportswear and garments.
|US Cotton Products Promoted|
The COTTON USA Sourcing Program participated in Material World in Miami. One of the largest US fabric shows, it is well attended by US textile mills, Latin American fabric and garment makers as well as sourcing executives of US apparel brands and retailers.
CCI and Cotton Incorporated used the opportunity to promote US manufactured products, and the Sourcing Program organized a private event for member mills and their W. Hemisphere customers at the show.
|NCGA Site Adds Information|
Seven publications featuring many of the significant historical developments in the US cotton ginning industry are now available in the Technical section of the National Cotton Ginners Assoc. web site, www.ncga.cotton.org.
These publications include a review of crucial research along with a number of technical drawings. The latest, for example, is “The Cotton Bale Presses at the Gin,” authored by Gino J. Mangialardi and W. Stanley Anthony.
|Prices Effective April 18-24, '08|