|House Panel Rejects Budget Proposal|
The House Agriculture Committee approved a letter to the Budget Committee which explained that the recently enacted farm law was “done in a fiscally responsible manner” and that “efficient implementation requires a period of stability.”
The annual Budget Views and Estimates letter reflects the Agriculture Committee’s priorities to the Budget Committee as they prepare the annual Budget Resolution. The Committee indicated its priorities include modernization of the Farm Services Agency computer system, enactment of derivatives market legislation and conducting oversight hearings. The letter essentially asks the Budget Committee to maintain the provisions of the recently enacted farm law.
The Administration proposed cutting roughly $15 billion by opening the farm bill to impose a $500,000 gross revenue test to deny direct payments, terminating cotton storage credits, imposing a $250,000 hard cap on total program benefits (direct and countercyclical payments, marketing loan gains and loan deficiency payments) and cutting Market Access Program funding by 20%.
The proposal has drawn wide criticism from Congress, including Agriculture Committee Chairman Peterson (D-MN) and Senate Budget Chairman Conrad (D-ND). Sens. Lincoln (D-AR) and Roberts (D-KS) and Reps. Berry (D-AR) and Conaway (R-TX) are circulating letters asking their colleagues to join in calling on the respective Budget Committee to reject the cuts and to oppose any efforts to re-open the farm law. Sen. Chambliss (R-GA) also is circulating a strongly worded letter addressed to Secretary Vilsack which takes issue with the proposed new revenue test and termination of storage credits. The House Agriculture Committee letter is available at www.agriculture.house.gov/inside/publications.
|Panel Approves Kirk for USTR|
Acting just days after his confirmation hearing, the Senate Finance Committee approved former Dallas Mayor Ron Kirk to be US Trade Representative. The Senate is expected to approve the nomination prior to the visit of European Union Trade Commissioner Catherine Ashton the week of March 15.
During his confirmation hearing, Kirk stressed that the Administration’s emphasis will be in trade enforcement. In related activities, the President announced his intention to nominate Demetrios Marantis, chief trade counsel of the Senate Finance Committee, as deputy USTR.
|Sales, Shipments Continue Strong|
Net export sales for the week ending March 5 were 307,600 bales (480-lb). This brings total ’08-09 sales to slightly more than 10.8 million. Total sales at the same point in the ’07-08 marketing year were about 10.7 million bales. Total new crop (’09-10) sales are 189,100 bales.
Shipments for the week were 249,800 bales, bringing total exports to date to 6.9 million bales, compared with the 7.5 million bales at the comparable point in the ’07-08 marketing year.
|Climate Change Input Sought|
House Agriculture Committee Chairman Peterson (D-MN) announced that panel is seeking comments on proposals to address global climate change. The Committee is soliciting the opinions of more than 400 agricultural, environmental, scientific and educational groups, and other members of the public, through a print- and web-based questionnaire.
Peterson said, “There are many different ideas out there and this questionnaire is meant to ensure that we hear from as many viewpoints as possible on how to incorporate the good work America's farmers, ranchers, and conservationists are already doing into climate change initiatives, and identify potential benefits for the future."
The questionnaire allows stakeholders throughout the nation to provide the Committee with their views on the different options being considered in Congress to reduce greenhouse gas emissions - especially as they relate to the agriculture and forestry sectors.
The questionnaire is at http://agriculture.house.gov.
|EPA Proposes Emissions Reporting|
EPA has proposed the first comprehensive national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States. About 13,000 facilities, accounting for about 85-90% of greenhouse gases emitted in the United States, would be covered under the proposal.
The new reporting requirements would apply to suppliers of fossil fuel and industrial chemicals, manufacturers of motor vehicles and engines, as well as large direct emitters of greenhouse gases such as cement production, iron and steel production, and electricity generation with emissions equal to or greater than a threshold of 25,000 metric tons per year. The vast majority of small businesses would not be required to report their emissions because their emissions fall well below the threshold.
According to John Larmett, EPA senior public liaison specialist, only very large animal operations would be required to report. The 25,000 metric tons per year threshold would include beef operations with at least 89,000 cattle, swine farms with at least 73,000 hogs, dairy operations of more than 5,000 head and poultry operations with more than 895,000 chickens. EPA estimates that fewer than 50 of the largest beef, dairy, and hog operations would have to begin reporting emissions.
The first annual report would be submitted to EPA in ’11 for the calendar year ’10, except for vehicle and engine manufacturers, which would begin reporting for model year ’11.
EPA is developing this rule under the authority of the Clean Air Act. The proposed rule will be open for public comment for 60 days after publication in the Federal Register.
More information on the proposed rule:http://www.epa.gov/climatechange/emissions/ghgrulemaking.html.
|USDA Signs MOU with China|
USDA signed a Memorandum of Understanding (MOU) with the China Fiber Inspection Bureau (CFIB) to establish a framework for collaboration on cotton classification methods and standards.
“This MOU is important to U.S. cotton farmers because it formalizes a working relationship between the United States and China,” said David Shipman, acting administrator of USDA’s Agricultural Marketing Service (AMS). “It will create uniformity between the two countries’ cotton classification systems that will assist in the importation of U.S. cotton into China.”
CFIB is the Chinese government agency that is responsible for overseeing domestic cotton classification in China. In ’05, a decision was made in China to reform the Chinese cotton classification system from a system of traditional manual classification to a system based primarily on instrument-based measurements, much like the system already in place at USDA. Mr. Lu Yang and Mr. Xiaoxin Yu, CFIB officials, were in Washington to participate in the signing ceremony. Shipman and Darryl Earnest, deputy administrator for AMS Cotton and Tobacco Programs, signed on behalf of USDA.
Following the MOU ceremony, the CFIB officials made visits to Cotton Incorporated’s offices in Cary, NC; USDA Agricultural Research Service’s Southern Regional Research Center in New Orleans, LA; the USDA-AMS Cotton Program office in Bartlett, TN; and the NCC’s headquarters in Cordova, TN.
During their session at the NCC, President/CEO Mark Lange thanked the CFIB officials for their cooperative efforts with USDA-AMS and their agreement to continue that work, as provided in the MOU. Lange was joined by American Cotton Shippers Assoc. Vice President William May and several members of the NCC’s senior staff.
|Delegation Sees Latin American Textiles|
A Cotton Council International (CCI) COTTON USA Executive Delegation traveled throughout the Western Hemisphere on March 1-10 to meet with leading customers of US cotton fiber, yarn and fabrics in Mexico, El Salvador, Colombia and Peru. The Western Hemisphere represents a market of about 6 million bales of US cotton – fiber markets of 2.2 million bales combined with 3.8 million bale equivalents of US- manufactured products that are exported in the form of yarn and fabrics. All together, this has represented about 30% of US cotton production.
CCI President Clyde Sharp, an Arizona producer, led the delegation. Other members included: John Dunavant, American Cotton Shippers Assoc. (ACSA) First Vice President; Jordan Lea, ACSA Second Vice President; Hank Reichle, representing AMCOT; Richard Kelley, a TN producer representing the American Cotton Producers; Shawn Holladay, a TX producer representing Cotton Incorporated; Marc Lewkowitz, Supima; and William May, ACSA.
During each stop, textile mill representatives in each country, representing the majority of US cotton fiber consumption in the market, engaged the delegation in an open dialogue on all cotton and cotton product topics.
In the Andean Region and Central America, textile mills — while generally pleased with the US cotton they are receiving — reviewed the quality concerns with cottons from the US and other countries. However, US cotton was commended for its lack of contamination. Further input was provided on bale packaging preferences. In each country, mills and manufacturers called for more emphasis on collaboration and integration of the cotton/textile/apparel industry within the hemisphere in order to be competitive with other origins, particularly countries in Asia.
|Rail Issues Survey Results Available|
Some 170 companies participated in the largest rail shipper survey ever performed to measure the impact of railroads’ large rate increases on their customers’ business. The survey was part of a recent webinar focusing on the railroad situation, including market power over the US cotton industry, in which NCC members and others in US agriculture participated. The webinar, which allowed the participants to relate their experience with rail carriers, was designed to facilitate a discussion regarding railroad rates, costs, volumes and recovery of fuel costs through surcharge programs.
The survey was conducted by Escalation Consultants in February/March and sponsored by a number of trade associations.
Individual survey responses were confidential and responses aggregated by organization. The results show that the economy is not the only reason for the large drop in rail traffic. The results also demonstrated that the large increase in rail rates in ’08 had far reaching implications on companies shipping by rail.
NCC member responses in the survey are available on the Flow-Shipment page of the NCC’s website at http://www.cotton.org/tech/flow/index.cfm.
|USDA Sees 13 Million US Bales in ’09-10|
In its March report, USDA gauged US ’08-09 cotton production at 13.04 million bales. Mill use was lowered 150,000 to 3.75 million bales and exports increased 500,000 bales to 12.00 million bales, based on recent export sales indicating a stronger US share of world trade than previously projected. The estimated total offtake now stands at 15.75 million bales which generates ending stocks of 7.30 million bales.
USDA released ’09-10 projections during last month’s Agricultural Outlook Forum. US production is estimated to be 13.00 million bales for ’09-10. Mill use is set at 4.00 million bales while exports are reported to fall to 11.00 million bales. The estimated total offtake stands at 15.00 million bales. After adjusting beginning stocks to 7.30 million bales based on the March report, the result is US ending stocks of 5.30 million bales on July 31, ’10, and a stocks-to-use ratio of 35.3%.
In USDA’s March report, world production for the ’08-09 marketing year was estimated to be 108.65 million bales, down 860,000 bales from the February report. World mill use was lowered 1.52 million bales due to reductions in China, India, the United States, Bangladesh, Brazil, Taiwan and others. Consequently, world ending stocks are estimated to be 62.55 million bales with a stocks-to-use ratio of 56.3%.
USDA’s estimate projects ’09-10 world production of 107.00 million bales with mill use of 115.00 million bales. Accounting for beginning stocks of 62.55 million bales from the March report, world ending stocks would fall to 57.05 million bales on July 31, ’10, with a stocks-to-use ratio of 49.6%.
|Prices Effective March 13-19, '09|