Cotton's Week: September 5, 2008

Cotton's Week: September 5, 2008

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SURE Deadline Approaching

Sept. 16 is the deadline for farmers to sign up for insurance coverage for ’08 uninsured crops to maintain eligibility under the new permanent disaster program known as the Supplemental Revenue Assistance Payments (SURE) program.

Art Barnaby, a risk management specialist with Kansas State Research and Extension, says farmers should check with their USDA Farm Service Agency (FSA) office to make sure all of their crops are covered with either crop insurance option. Farmers must pay the required fees of catastrophic coverage (CAT) for insurable crops or the Noninsured Crop Assistance Program (NAP) for any crops not insured or covered by NAP.

A one-time exemption for this year allows farmers to pay the $100 CAT or NAP fee to maintain eligibility for a SURE payment, if they suffer qualifying crop losses. Normally, these fees need to be declared in the spring for crops like corn and soybeans but the new farm law provides a one-time exception for this year. Producers planting a ’09 winter wheat crop this year must declare their crop insurance intentions by Sept. 30.

“There is a real lack of information for farmers trying to make informed decisions before paying 2008 NAP and CAT fees to be eligible for SURE payments on 2008 crop losses,” Barnaby said. “It is important that producers have all fees paid to maintain eligibility for SURE coverage on their fall 2008 crops. Clearly, there are still weather perils that could destroy fall-harvested crops and the SURE payment could be helpful. Because there are so many unknowns and one will likely not have answers before the Sept. 30 (wheat) signup deadline, the best suggestion I have is to buy the level and type of crop insurance you planned to buy on wheat without considering SURE.”

Producers also should check with local FSA offices to determine ’09 sales closing dates for various insurable crops and NAP crops. Producers especially should check on closing dates for NAP forage crops or pilot insurance forage programs in their county.



Final ’07 Crop CCP Announcement Soon

Agriculture Secretary Ed Schafer announced that final ’07-crop counter-cyclical payments (CCP) for cotton will be announced when final average farm prices for the marketing year become available. USDA's Farm Service Agency (FSA) makes final counter-cyclical payments on behalf of the CCC at the end of an applicable crop's 12-month marketing year.

 These prices are scheduled to be released by the National Agricultural Statistics Service as follows: Oct. 10, ’08, for upland cotton; Oct. 31, ’08, for corn, grain sorghum and soybeans; and Jan. 30, ’09, for rice.

Meanwhile, Schafer said USDA's Commodity Credit Corp. (CCC) will issue $82 million in final ’07 CCPs to eligible producers with enrolled peanut base acres in the Direct and Counter-cyclical Program (DCP). The final CCP rate for producers with enrolled peanut base acres is $49 per short ton. Peanut farmers who accepted the first partial payment in Feb. ’08 of $7.60 per ton, are now due an additional $41.40 per ton. No partial or final ’07-crop counter-cyclical payments were made for wheat, barley and oats because prices averaged well above levels that would trigger CCPs.

The CCP rate is the amount by which the "target price" of each commodity, specified by the ’02 farm law, exceeds its effective price. The effective price equals the direct payment rate plus the higher of either: (1) the national average market price received by producers during the marketing year; or (2) the national average loan rate for the commodity. The counter-cyclical payment amount equals the CCP rate, times 85% of the farm's base acreage, times the farm's CCP yield.

For more information on the direct and counter-cyclical payment programs, visit your local FSA office or the FSA web site: http://www.fsa.usda.gov.



Comments Sought for Endosulfan

EPA is seeking public comment on environmental advocacy group petitions calling on the agency to revoke all tolerances for the organophosphate pesticide, endosulfan.

The agency said it would take comments on the Natural Resources Defense Council (NRDC) and Pesticide Action Network North America’s petitions for 60 days following publication of the notice in the Aug. 20 Federal Register (http://edocket.access.gpo.gov/2008/E8-19166.htm). Comments on the notice should be identified by Docket No. EPA-HQ-OPP-2008-0615 and submitted to http://www.regulations.gov/.

In their joint petition filed with EPA on May 19, the organizations said that endosulfan, which is used on tomatoes, cotton and other crops, "harms the hormone system, and low levels of exposure in the womb have been linked to male reproductive harm, other birth defects and possibly autism." Although endosulfan is not widely used, there is a critical need for the product in Arizona and California for control of aphids, whitefly and Lygus.

EPA also said in the notice that it is seeking information on endosulfan residues in or on commodities consumed by Native Americans in Alaska. That issue also was raised in the advocacy group petition, which noted that tribal governments and indigenous groups in the arctic have called for EPA action on the pesticide, which reaches the region on wind and sea currents.

In addition to this current petition, there is a lawsuit that a coalition of labor and environmental groups, including NRDC, filed on July 24 against EPA to force the agency to stop re-registration of endosulfan, pending further risk assessment.

In yet another action tied to endosulfan, EPA on Aug. 15 said that as part of its Endocrine Disruptor Screening Program, it was taking steps toward collecting from pesticide registrants the data needed to determine whether some pesticides, including endosulfan, contain hormone-disrupting ingredients.



ESA Regulation Changes Proposed

Secretary of the Interior Dirk Kempthorne has proposed modifications to the existing Endangered Species Act (ESA) regulations.

The proposed changes are in response to the listing of the polar bear as a "threatened species" under the ESA on May 15, ’08. Kempthorne said the ESA was not the right tool to set US climate policy or regulate greenhouse gas emissions.

The proposal is intended to update a portion of the ESA regulations dealing with section 7 of the Act which governs the ESA responsibilities of other federal agencies. Each federal agency, including EPA in regards to pesticide registrations, is responsible under the regulations to consult with the US Fish and Wildlife Service or the National Marine Fisheries Service (NMFS) before they undertake an action that may affect an endangered species. Such consultation may involve either a formal written request or it may be an informal conversation between the agencies.

These consultations can be very complex and lengthy. For example, in Jan. ’01, the Washington Toxics Coalition and other groups filed a citizen suit against EPA. The Coalition alleged that EPA had violated Section 7(a)(2) of the ESA by failing to consult with NMFS regarding the effects of pesticide registrations on 26 endangered species and threatened Pacific salmon. The judge in this case ruled in favor of the plaintiffs and imposed buffers for the 54 pesticides involved in the lawsuit until NMFS completed their evaluations. EPA submitted data for chlorpyrifos, diazinon and malathion in ’02-03 to NMFS. Six years later, NMFS has just released its draft biological opinion on these pesticides.

"The purpose of these changes is to reduce ambiguity, improve consistency, and narrow interpretive differences, even within the Services,” said Dale Hall, director of the Fish and Wildlife Service. “They are a positive step forward. In 1986, our existing rules made

sense. At that time, very few Federal action agencies had any in-depth expertise with section 7 and listed species, but that is not the case today.

“We are not being good stewards of our resources when we pursue consultation in situations where the potential effects to a species are either unlikely, incapable of being meaningfully evaluated, wholly beneficial, or pose only a remote risk of causing jeopardy to the species or its habitat."

These changes are designed to reduce the number of unnecessary consultations under the ESA so that more time and resources can be devoted to the protection of the most vulnerable species. However, agency actions that could cause an adverse impact to listed species are still subject to the consultation requirement. The proposal also adds timelines to help limit the duration of informal consultation and lend greater certainty to the process.

Environmentalists and Congressional Democrats blasted the proposal as a last-minute attempt by the Bush Administration to bring about dramatic changes in the law.

For more than a decade, Congressional Republicans have been trying unsuccessfully to rewrite the act, which property owners and developers say imposes unreasonable economic costs.

Sen. Boxer (D-CA) already has sent a letter to Sec. Kempthorne in opposition to the rule changes, requesting him to appear at a Congressional hearing on Sept. 24th, and asking that the comment period be extended from 30 days to six months.



Sales Weak, Shipments Steady

Net export sales for the week ending Aug. 28, ’08 were 25,300 bales (480-lb). This brings total ’08-09 sales to approximately 4.7 million bales. Total sales at the same point in the ’07-08 marketing year were slightly more than 4.9 million bales. Total new crop (’09-10) sales are 29,800 bales.

Shipments for the week were 235,300 bales, bringing total exports to date to 1.0 million bales, compared with the 1.5 million bales at the comparable point in the ’07-08 marketing year.



Revised Bale Packaging Specs Approved

The NCC received notification that the 2008 Specifications for Cotton Bale Packaging Materials were approved by USDA's Commodity Credit Corp. (CCC).The CCC letter notified the committee that "…the revised specifications for packaging ’08-crop cotton are approved for Commodity Credit Corporation loan program purposes."

Revisions to the ’07 Specifications are on the NCC’s web site at: http://www.cotton.org/tech/bale/specs/index.cfm. The revised Specifications are identical to the Specifications for the previous crop year except for the following modifications:

• Removed hot blade weld technology as an approved welding method for PET Plastic Strapping;

• Added a colored yarn clarification for spiral-sewn burlap bagging;

• Added identification, certification and test methods in requirements for cotton bagging;

• Approved a circular woven bag fabrication made from woven polypropylene; and

• Introduced a new section named Certificate of Analysis (COA) and Approved List.

The Joint Cotton Industry Bale Packaging Committee also agreed to consider a phaseout of burlap as an approved material in two to three years.

Earlier this week, the manufacturers, fabricators and vendors of approved materials were notified of the publication and the need to carefully review the new COA and approved list section carefully. Those groups were reminded that the information regarding the COA was approved for inclusion in the Specifications this year by the bale packaging committee and that the COA provisions also were approved by the CCC. Consequently, the COA provisions are now in full force.

Commercial firms also were encouraged to familiarize themselves with the approved list paragraph at the end of the COA and the approved list section of the Specifications. Paragraph 4.2., the approved list section, is not new but consolidates references to approved lists from other parts of the Specifications.



Prices Effective September 5-11, '08

Adjusted World Price, SLM 11/16

62.85 cents

*

Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

0.00 cents

Import Quotas Open

NA

Limited Global Import Quota (480-lb bales)

NA

ELS Payment Rate

0.00 cents

*No Adjustment Made Under Step I
 
Five-Day Average
 
Current 5 Lowest 3135 CFR Far East

77.90 cents

Forward 5 Lowest 3135 CFR Far East

NA

Coarse Count CFR Far East

NA

Current US CFR Far East

78.55 cents

Forward US CFR Far East

NA

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

57.11 cents

**

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

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