Cotton's Week: November 21, 2008

Cotton's Week: November 21, 2008

phytogen

December Doha Meeting Raises Concerns

NCC Chairman Larry McClendon, in a guest column appearing in Farm Press Publications, said there is serious discussion about convening another meeting of Ministers so that a World Trade Organization Doha agreement can be reached before the end of the year -- before the new President can have anything to say about it.

In the column, at http://www.cotton.org/issues/2008/dohafp.cfm, he wrote that it seems certain that “should such a meeting occur, the negotiation would start with the flawed text proposed by WTO Director General Pascal Lamy and, once again, the United States will be asked to make more cuts while receiving even less in market access gains.”

McClendon said that none of the major trade negotiating countries has changed their positions since July and if a December meeting is held, and the Lamy text used as a starting point, “the haste to conclude the negotiations would work against a balanced agreement and the new President will be saddled with a text that cannot pass Congress. I don't think that is a good Christmas present for President-elect Obama, U.S. agriculture, or world trade.”

McClendon wrote that US agriculture is being asked to voluntarily forgo a large portion of the commodity programs that operate as a safety net for US farmers -- a $34 billion cut proposed by Lamy in July.

“When I reviewed the Lamy proposal, I was amazed it would even be considered,” McClendon said. “It contains significant loopholes on market access, would have allowed countries to use safeguard remedies to increase tariffs beyond current levels, and would have created a further imbalance in market access between developed countries and developing countries. The Lamy text offered no tangible benefits to U.S. agriculture in terms of developing country market access. I know for sure that the Lamy text would not help increase cotton exports to China one bit -- the largest single producer and user of cotton in the world.

“But the whole of U.S. agriculture would not fare much better. The exemptions for developing countries ensure that U.S. agriculture will not have additional access to the fastest growing agricultural markets in the world. While the Lamy text was a serious problem as far as I was concerned, India and a few other developing countries insisted on significantly less access to their markets and even larger reductions in U.S. agricultural support. Our trade negotiators did the right thing when they refused.”



Special Products Weaken Market Access

NCC analysis indicates that exemptions for “Special Products” in the latest World Trade Organization Doha negotiating text could dramatically undermine potential market access gains.

The current texts would allow developing countries to designate 12-13% of their tariff lines as “Special Products.” Up to 5% of such tariff lines may be exempt from any tariff cuts and the average tariff cut across Special Products would be 10-11%. These cuts are far less than the reductions called for in the general formula.

In general, agricultural imports by developing countries are concentrated in a relatively few tariff lines. In fact, for many countries, the top 5% of tariff lines based on import values accounts for 80-85% of their total imports. If a country were selective in their designation of “Special Products,” it is possible to shield virtually all of their domestic market from additional access. In the case of India, selective designation could shield more than 99% of total imports from any changes in applied tariffs.

The full NCC analysis is accessible from the NCC’s home page at www.cotton.org.



Sales, Shipments Steady

Net export sales for the week ending Nov. 13 were 209,200 bales (480-lb). This brings total ’08-09 sales to about 7.4 million bales. Total sales at the same point in the ’07-08 marketing year were about 6.9 million bales. Total new crop (’09-10) sales are 82,100 bales.

Shipments for the week were 248,100 bales, bringing total exports to date to 3.7 million bales, compared with the 4.0 million bales at the comparable point in the ’07-08 marketing year.



10-Acre Deadline Approaching

Nov. 26 is the deadline for owners and operators of farms with 10 or fewer base acres to enroll their farms with USDA for the opportunity to receive payments under the 2008 Direct and Counter-cyclical Payment Program (DCP).

This extension of the original Sept. 30 deadline only applies to producers who were previously excluded because of the minimum acreage requirement. USDA began issuing payments to producers on farms with 10 base acres or less who already had enrolled in the DCP program soon after the President signed the new law in October. These amendments apply to farms with crop acreage bases of 10 acres or less. These changes and clarifications allow some producers more flexibility in farming practices and create new sign-up opportunities with new deadlines for some farms. The amendments also apply to the new Supplemental Revenue Assistance Program.

USDA's Farm Service Agency (FSA) now will resume allowing reconstitutions for farms with 10 acres of base or less according to normal reconstitution rules and policy. Eligible producers may sign up for DCP at any FSA office or enroll on the FSA website at: www.fsa.usda.gov/dcp by clicking on Access eDCP Services.



ACE Program Launched

The NCC and The Cotton Foundation have launched “Advancing Cotton Education,” (ACE), a program aimed at helping producers and others involved in the cotton production decision-making process achieve profitability and sustainability.

The ACE program has a number of components, including the Cotton Physiology Today newsletters, a pioneering instrument that helped educate producers, consultants, county Extension agents and others involved in cotton production.

Those newsletters and other information are accessible on the ACE website, http://www.cotton.org/tech/ace. Other areas of the site are still under development and will include links to other educational sites and employ audio and video clips to educate and/or demonstrate techniques or identify situations of interest.

 “The ACE program utilizes current technology to allow for more interactive information delivery,” said Bill Robertson, the NCC’s manager of Agronomy, Soils & Physiology. “Although the components of the ACE program will vary as needs dictate and technology allows, this program will continue to rely on the researchers and Extension cotton specialists from all disciplines to help develop and assist in the dissemination of information designed to meet decision-makers’ specific needs in today’s fast-paced world.”



ETF Reviews Key Issues

The NCC’s Environmental Task Force (ETF), convening in Memphis, received updates on regulations for pesticides and biotechnology, climate change, and sustainability, including a briefing by Cotton Incorporated’s Dr. Kater Hake.

The ETF also met in individual private sessions with representatives from Monsanto, Syngenta and Bayer to discuss management strategies for herbicide resistant weeds with an emphasis on glyphosate resistant weeds.

NCC staff briefed the ETF on pesticide re-registration reviews to be conducted by EPA.  The Food Quality Protection Act (FQPA) requires the agency to complete registration reviews for all registered pesticides every 15 years. Plans for this registration review were initiated in ’06 and a schedule of pesticide reviews through ’11 has been published. While this next review is not likely to be as exhaustive as the tolerance reassessment and re-registration process that concluded in ’07, EPA has said that additional considerations such as compliance with the Endangered Species Act and screening for endocrine disruptors may come into play.

In preparation for this latest registration review, the ETF unanimously approved a recommendation for the NCC to conduct a confidential pesticide use survey with producers from all regions of the Cotton Belt.

A similar confidential survey on organophosphate use was conducted by the NCC in the mid-’90 s in preparation for the initial FQPA tolerance reassessments. This information provided the NCC staff with crucial guidance in directing resources to the defense of critical products.

The purpose of the new survey is to provide similar guidance but will be more comprehensive, including all pesticide and herbicide uses by cotton production regions, to meet the needs of the upcoming registration review.



BWCC Registration Deadline Near

If you haven’t done so, mark your calendar and plan to attend the ’09 Beltwide Cotton Conferences, Jan. 5-8 at the Marriott Rivercenter/Riverwalk in San Antonio, TX. Dec. 8 is the deadline for early online registration for industry members, and others are encouraged to register online and make housing arrangements at the BWCC website, http://www.cotton.org/beltwide/.

Housing reservations appear to be on pace with previous years. Currently, the Marriott Rivercenter room block is sold out.  Reservations that are cancelled will result in those rooms returning to the room block. The deadline to cancel rooms and receive a full refund is Dec. 8. There is room availability at the other hotels holding Conferences’ room blocks, which include the Marriott Riverwalk, Grand Hyatt San Antonio and LaQuinta. Dec. 15 is the last date hotels are required to honor the special Conferences’ rates.

A downloadable PDF version of the final ’09 Beltwide Cotton Conferences’ program is scheduled to be available at the BWCC website on Dec. 1. A printed program will be available at the meetings, which promise to offer a wealth of information at a location enjoyable for the entire family.



Summit Defines Global Cotton Direction

The fifth Sourcing USA Summit gathered 410 cotton industry representatives for a three-day meeting that may serve to redefine global direction and foster enhanced collaboration along the cotton supply chain.

The Summit was presented jointly by Cotton Council International (CCI) and Cotton Incorporated on Nov. 13-15 near Austin, TX, under a theme of “Strengthening Enduring Partnerships.” For the past 11 years, the biennial event has brought together global leaders along the cotton supply chain for an open exchange of ideas; to provide textile mill executives with management/trend information and networking opportunities that can drive their cotton businesses forward.

This year, CCI and Cotton Incorporated focused on sharing the best available information – including strategic thinking, agricultural research, textile innovations and marketing data – in order to help companies throughout the supply chain survive and prosper during these difficult economic times.

Anchoring the event was an assessment by the Center for Strategic and International Studies, done in collaboration with CCI and Cotton Incorporated, that marked a unique application of that organization’s Seven Revolutions model to the entire cotton industry. Titled “Cotton’s Revolutions,” the study identified three key focal areas for global cotton: resources, technology and governance. Business forums explored each of these three topics in greater depth. Other business forums focused on the impact of the ’08 US election on world cotton and textile policy, global transportation and economic outlooks for the global cotton industry.



America's Heartland in Fourth Season

America's Heartland, in its fourth season and shooting its fifth, is on more than 300 digital channels. The show runs in 12 of the top 20 US markets and is on RFD-TV. Episodes also can be viewed at www.americasheartland.org or on YouTube.

The series has been expanded to include educational outreach by developing and promoting meaningful content to high school education classes including 50 study guides and 12 lesson plans meeting all state education guidelines.

The NCC is a promotional partner in conjunction with sponsors Monsanto and American Farm Bureau Federation.



Prices Effective Nov. 21-27, '08

Adjusted World Price, SLM 11/16

36.64 cents

*

Fine Count Adjustment ('07 Crop)

  0.55 cents


Fine Count Adjustment ('08 Crop)

  0.15 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 17.36 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

 53.23 cents


Forward 5 Lowest 3135 CFR Far East

NA


Coarse Count CFR Far East

50.27 cents


Current US CFR Far East

51.85 cents


Forward US CFR Far East

NA


 

'07-08 Weighted Marketing-Year Average Farm Price  
 

Final Marketing Year Average Price

59.30 cents

 


Sponsored by
Dow AgroSciences