Cotton's Week: September 26, 2008

Cotton's Week: September 26, 2008

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House Approves 10-Acre Rule Bill

The House approved legislation which, if enacted, would suspend the so-called 10-acre rule.

HR 6849 would suspend a provision in the new farm bill which allows USDA to deny payments to farms with fewer than 10 total base acres. The legislation would extend signup from Sept. 30 to Nov. 14 or 45 days from enactment date, and would suspend the provision for the ’08 and ’09 crop years. The cost of suspending the provision is fully offset.

In related action, 19 Senators including Sens. Chambliss (R-GA) and Dole (R-NC), introduced S 3538 which would suspend the provision for two years and extend signup for ’08 for producers on an affected farm until Dec. 31, ’08.



Hardwick Testifies on Disaster Help

In his testimony concerning disaster assistance in the wake of hurricanes Gustav and Ike, NCC Vice Chairman Jay Hardwick reminded Senators that even though Louisiana bore the brunt of those storms, Texas, Arkansas and Mississippi were affected, too.

The Newellton, LA, producer, testifying before a joint hearing of the Senate Agriculture, Nutrition and Forestry Committee and the Ad Hoc Subcommittee of the Homeland Security and Government Affairs Committee, encouraged Senators to develop a plan that will deliver financial assistance to producers in a timely manner.

He stated enhanced crop insurance coverage, timely ad hoc disaster relief, supplemental payments delivered in the same manner as direct payments, and enhancements to the provisions of the permanent disaster programs should all be considered in order to expedite assistance that is commensurate with the losses that have been incurred. He noted that additional funding for existing cost-share conservation programs would help speed restoration of damaged fields.

Hardwick also asked Senators to consider providing some form of financial assistance to gins, warehouses and other key US cotton infrastructure components that will experience significant financial losses due to sharply reduced cotton volumes.



FCIC Board Members Appointed

Agriculture Secretary Ed Schafer announced the appointments of insurance agent Susan C. Rogers and family farmer James C. Nickel to fill vacancies on the Federal Crop Insurance Corp. (FCIC) Board of Directors.

Each will serve a four-year appointment ending on Sept. 5, ’12.

Rogers, of Kingman, KS, has owned her own crop insurance agency for 15 years, and will be filling the insurance industry vacancy on the board. She also shares ownership of a small agricultural business selling farm supplies and providing custom hay and feed cutting.

Nickel, a farming industry appointee from Bakersfield, CA, is a sixth generation California farmer with a background in agribusiness, project management, and agricultural industry policy.

Also reappointed were FCIC Board members Luis Monterde, of Purvis, MS, a specialty crops producer, and Mike Pickens, of Little Rock, AR, an insurance-regulatory appointee.  The terms of Montrede and Pickens will end on Oct. 19, ’12.

USDA's Risk Management Agency (RMA) carries out the programs authorized by the FCIC Board by promoting, supporting and regulating sound risk management solutions to preserve and strengthen the economic stability of America's agricultural producers.

More information about the FCIC Board and its actions is at http://www.rma.usda.gov/fcic/.



APTA Extension Urged

In a letter to House and Senate leadership, the NCC and the National Council of Textile Organizations joined other industry groups in urging Congress to approve an extension of the Andean Trade Preference Act (ATPA) beyond its scheduled expiration date of Dec. 31, ’08. The letter stressed that even a short lapse in the program could undo many of the successes that have been realized.

The groups reiterated that ATPA is not a substitute for free trade agreements with Peru and Colombia, but rather a bridge until the US–Colombia agreement is passed and implemented. The free trade agreement with Peru was passed earlier this year but has not been fully implemented.

In ’07, the United States exported $167 million in cotton fiber and $190 million in textile and apparel products to the Andean countries.



Carbofuran Comment Extension Denied

EPA has denied a request by the NCC and other grower groups to extend the comment period of the July 31 Federal Register Notice of its proposed rule to revoke all tolerances for carbofuran (Furadan) -- a critical product in cotton for late season aphid control under Section 18.

A tolerance is a maximum pesticide residue allowed on food and feed products which will meet dietary safety standards. A pesticide must have a tolerance before it can be labeled for use.

The NCC had asked for the request in order to further work with the registrant to re-evaluate these dietary risks. EPA stated in its denial that it “believes the time allowed for comment in this matter has been sufficient.” In a subsequent meeting with the NCC and other interested grower groups, EPA dismissed any further analyses of subsets of uses that might fit into the risk cup despite earlier indications that the Agency was willing to make such considerations.

The NCC has several concerns regarding the process that EPA is taking in canceling uses of this product.

The law prescribes that EPA should cancel registrations prior to revoking tolerances. However, EPA, under the Federal Food, Drug, and Cosmetic Act (FFDCA), is proceeding to revoke all tolerances for carbofuran. Under FFDCA, the Agency is required to consider only dietary risks and is not required to consider a product’s agriculture benefits. Carbofuran’s benefits are well documented and have been supported by USDA, the National Assoc. of State Departments of Agriculture, grower groups and numerous state extension specialists.

The NCC also is concerned that following the revocation of carbofuran tolerances, the registrations still will be in place. A farmer legally can use Furadan but will adulterate his crop because he will be applying a pesticide that does not have a tolerance. EPA says it has all “intentions” of moving quickly to cancel registrations. However, it can take up to 12-18 months to fulfill the cancellation requirements.

The NCC will include these concerns in its comments to the docket.



’09 BWCC Coming Together

Programming is taking shape for the ’09 Beltwide Cotton Conferences on Jan. 5-8 (Monday-Thursday) at the Marriott Rivercenter/Riverwalk in San Antonio, TX.

The forum, to be held under a theme of “Improving Our Farm, Future and World,” will feature a two-day Cotton Production Conference with an innovative grower panel sharing what they are doing to improve their bottom lines along with other panel discussions addressing such challenges as pest management and crop rotation.

“Pest management is evolving in response to the changing landscape,” said the NCC’s Bill Robertson, who is coordinating the Production Conference. “For example, today’s different crop mixes have led to different insect pests, such as stinkbugs and spider mites, becoming more problematic than when cotton was more prevalent in the crop mix. While cotton yield benefit from rotation is well established, rotation’s influences on key agronomic practices such as soil fertility, residue management, pest management, and plant growth regulation also will be discussed.

From spider mites to subsurface irrigation, the Production Conference’s multiple workshops and special sessions promise an in-depth focus on other matters important to cotton producers. The BWCC’S technical conferences and Cotton Foundation Exhibits also will offer a wealth of information.

The Cotton Consultants Conference, begun at the ’08 BWCC, is being offered again. Open to all attendees, including producers, county agents, agricultural product co-op dealers and others, it will be held on the afternoon of Jan. 5. That session will focus on in-depth discussions of insect and weed resistance management and other agronomic practices.

Meanwhile, those NCC and Cotton Foundation members planning to attend the ’09 BWCC are encouraged to make early housing reservations online (see Sept. 19 Cotton’s Week).



Gin History Month Proclaimed

USDA has proclaimed October ’08 as “National Cotton Gin History Month,” according to a news release from the National Cottonseed Products Assoc. (NCPA).

Ben Morgan, NCPA executive vice president, said the US cottonseed oil industry will also be recognizing the contributions to food production by the cotton gin’s inventor Eli Whitney.

“The cotton gin not only changed what our nation wears, it changed what it eats,” he says. “We want to educate Americans about cottonseed oil’s historic and modern-day role in our food supply. Cottonseed oil was borne out of a proliferating cotton industry, and the need to find a use for all the cottonseed left over after gins remove the fiber.”



Mill Cotton Use Slips

According to the Commerce Dept., Aug. (four-week month) total cotton consumption in domestic mills was 173.8 million pounds for a seasonally adjusted annualized rate of 4.63 million bales (480-lb). Last year’s August annualized rate was 4.80 million bales.

The July (four-week month) estimate of domestic mill cotton use was lowered by 3.0 million pounds to 163.6 million pounds. The revised seasonally adjusted annualized rate of consumption for July is 4.60 million bales. This is lower than last year’s July annualized rate of 4.88 million bales.

Commerce’s estimate of both upland and ELS consumption of cotton by US mills, when adjusted to represent the complete ’07-08 crop year, is approximately 4.61 million bales.

USDA’s September estimate of ’07-08 crop year mill use was 4.60 million bales.

Commerce’s estimate of exports for the ’07-08 crop year is approximately 13.63 million bales, compared to USDA’s latest export estimate of 13.65 million bales. For the ’07-08 crop, Commerce estimates there are 507,507 bales in excess of reported supply less distribution. This number, when combined with Commerce’s estimate of 25,750 bales that are lost or destroyed, results in 533,257 bales of ‘unaccounted’ cotton, compared to USDA’s estimate of 550,000 bales of ‘unaccounted’ cotton. USDA generally estimates some cotton as ‘unaccounted’ but historically this estimate averages less than 200,000 bales.

Commerce’s survey-based estimate of stocks on hand as of July 31, ’08 was 9.91 million bales. USDA’s September estimate of ending stocks for the ’07-08 crop year was 9.90 million bales. Preliminary September domestic mill cotton use and revised August figures will be released by Commerce on Oct. 23.



Sales, Shipments Steady

Net export sales for the week ending Sept. 18 were 267,700 bales (480-lb). This brings total ’08-09 sales to approximately 5.6 million bales. Total sales at the same point in the ’07-08 marketing year were approximately 5.4 million bales. Total new crop (’09-10) sales are 72,200 bales.

With purchases of 1.6 million bales, China accounts for 29% of total sales. Mills in Mexico have been steady buyers of US cotton with total purchases of 1.0 million bales. Indonesia is the third largest customer with just 500,000 bales followed by Turkey and Vietnam at 476,000 bales and 307,000 bales, respectively.

Shipments for the week were 229,200 bales, bringing total exports to date to 1.8 million bales, compared with the 2.3 million bales at the comparable point in the ’07-08 marketing year.



Prices Effective Sept. 26-Oct. 2, '08

Adjusted World Price, SLM 11/16

55.12 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

71.99 cents

Forward 5 Lowest 3135 CFR Far East

NA

Coarse Count CFR Far East

69.80 cents

Current US CFR Far East

71.50 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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