Cotton's Week: April 17, 2009

The American Cotton Producers (ACP), chaired by Georgia producer Chuck Coley, convened their ’09 spring meeting in New Orleans, where the primary focus centered on implementation of the ’08 farm bill.

NCC Chairman Jay Hardwick, a Louisiana producer, welcomed the group and reviewed a number of recent NCC activities. He stressed that the NCC continues to actively monitor implementation of the farm bill, while also defending an effective safety net during the ongoing budget debate. Hardwick also commended the producer leadership for their recent outreach efforts to their Congressional members and urged continued diligence in this challenging political environment.

Clark Ogilvie, staff member of the House Agriculture Committee, reported on that panel’s ongoing and planned activities. He stressed that the Committee continues to closely monitor implementation issues related to the farm bill and likely will hold formal reviews in the near future. Ogilvie recapped the efforts on legislation regulating futures markets and indicated that a thorough review of crop insurance was planned, with a hearing beginning the week of April 20. In addition, the House Ag Committee will continue to monitor possible Congressional efforts on climate change legislation.

Darryl Earnest, with the USDA Agricultural Marketing Service’s Cotton Division, provided a detailed report on the classing office activities, including the agency's proposal to increase classing fees to $2.20 per bale, giving an effective rate of $2.15 for those using consolidated billing.

NCC Senior Vice President of Washington Operations John Maguire updated the group on changes in leadership and committee membership in the 111th Congress, as well as the latest status of appointments in the Obama Administration. After a brief review of the cotton program provisions in the new law, Maguire stressed the NCC’s priorities in the FY10 appropriations and reviewed developments on environmental policy.

NCC CEO/President Mark Lange summarized the latest trade policy issues with a focus on the ongoing dispute with Brazil. A decision in the case’s arbitration phase is expected in late April or early May. Currently, a WTO arbitration panel is deliberating potential damages that Brazil may be allowed to seek in retaliation for US non-compliance in the original panel finding.

Gary Adams, the NCC’s vice president of Economics and Policy Analysis, provided a detailed cotton economic update as well as an overview of efforts to regulate carbon dioxide emissions.

The NCC has responded to a questionnaire sent out on March 11 (see 3/20/09 Cotton’s Week) by House Agriculture Committee Chairman Peterson (D-MN) in preparation for imminent legislation on global warming.

The questionnaire was mailed to numerous organizations and included more than 20 highly specific questions regarding agriculture’s possible role in climate change legislation. The NCC response is in the Issues Members Only area of the NCC’s website, www.cotton.org. The questions focused on agriculture’s potential role in offsetting emissions in a cap-and-trade program.

House Committee on Energy and Commerce Chairman Rep. Waxman (D-CA) and Rep. Markey (D-MA), who chairs the Subcommittee on Energy and the Environment, have issued draft legislation and have hearings scheduled for the week of April 20.

House Speaker Pelosi (D-CA) and Sen. Boxer (D-CA) have stated publically that legislation will be forthcoming before year’s end. It is generally believed that President Obama wants something in hand for the United Nations-sponsored global warming negotiations scheduled for December ’09 in Copenhagen, Denmark.

EPA issued a proposed endangerment finding that greenhouse gases contribute to air pollution that may endanger public health or welfare by contributing to global warming. This finding is in response to the ’07 US Supreme Court ruling which authorized EPA to regulate greenhouse gases under the Clean Air Act (CAA).

The proposed finding identified six greenhouse gases that pose a potential threat – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.  The science suggests that concentrations of these gases are at high levels as a result of human emissions, and these levels may be the cause of the increase in average temperatures seen in the ’90s.

Agriculture is both a source and a sink for carbon dioxide but is a net emitter of methane (from rice and animal production) and nitrous oxide (from fertilizers).

The proposed endangerment finding now enters the public comment period, which is the next step in the deliberative process that EPA must undertake before issuing final findings. The proposed finding does not include any proposed regulations. Before taking any steps to reduce greenhouse gases under the CAA, EPA would conduct an appropriate process and consider stakeholder input.

Both President Obama and EPA Administrator Jackson repeatedly have indicated their preference for comprehensive legislation to address this issue. Regulating greenhouse gases under CAA will be very stringent, reaching as far down as permits for large homes and most new buildings.

For more information, go to http://epa.gov/climatechange/endangerment.html.

USDA’s Farm Service Agency (FSA) released the premium and discount schedules for the ’09 upland and ELS cotton crop. The schedules are used by the Commodity Credit Corp. (CCC) in making nonrecourse marketing assistance loans to cotton producers and include factors such as grade, staple length, color and leaf qualities.

The ‘09 crop schedule of differentials is applicable to CCC base-quality loan rates of 52.00 cents per pound for the base grade of upland cotton and 79.77 cents per pound for ELS cotton.

With producers and merchandisers currently making planting and marketing decisions for the ’09 crop, the NCC appreciates FSA’s prompt publication of the schedule -- which can be found in the Price Support section FSA’s website, www.fsa.usda.gov. A full schedule will be posted under the Economics section of the NCC’s website, www.cotton.org. In addition, the NCC will be distributing a loan schedule poster to its members.

Agriculture Secretary Vilsack announced the appointments of Michael T. Scuse and Bud Philbrook to serve as deputy under secretaries for Farm and Foreign Agricultural Services (FFAS). Philbrook and Scuse will work directly with Jim Miller, under secretary for FFAS.

Philbrook will have primary responsibility for the international programs in the FFAS mission area and he will supervise the operations of the Foreign Agricultural Service. Scuse will have responsibility for oversight of the domestic programs, including the cotton program. He will supervise the Farm Service Agency.

Philbrook of Minnesota has been an advisor to the presidential campaigns of then Sens. McCarthy and McGovern. Scuse most recently served as chief of staff to the Governor of Delaware and was Delaware Secretary of Agriculture.

Secretary Vilsack also announced the appointment of Robert Bonnie as senior advisor to the Secretary for Environment and Climate. Bonnie most recently served as vice president for Land Conservation and Wildlife at the Environmental Defense Fund.

The US Dept. of Labor (DOL) Employment and Training Administration (ETA) published an Interim Final Rule regarding the H-2A temporary agricultural worker program in the Federal Register. The rule announced an amendment to the H-2A regulations extending the transition period of the application filing procedures currently in effect for all H-2A employers with a date of need on or before July 1, ’09, as established in the H-2A Final Rule published on Dec. 18, ’08 and in effect as of Jan. 17, ’09.

The transition filing procedures are extended to include all employers with a date of need on or before Jan. 1, ’10. The application filing process that the State Workforce Agencies and the Chicago National Processing Center (CNPC) have continued to use since Jan. 17, ’09 will remain in effect. Therefore, employers are not permitted to conduct pre-filing recruitment activities, as specified under the full regulations, but must submit the ETA Form 9142 and ETA Form 790 directly to the CNPC.

Although long term uncertainty remains, this is a welcome announcement as it will allow the stability of not facing additional changes this summer. The National Cotton Ginner’s Assoc. recently sent a letter to DOL requesting this action.

On April 21, NCC grower members are urged to view the NCC-produced AgDay Cotton’s Week television segment that focuses on the growing problem of weed resistance.

The segment features an interview with U. of Georgia Extension Weed Specialist Dr. Stanley Culpepper, who emphasizes the importance of growers accepting the seriousness of this situation and eradicating resistant weeds. He says weed resistance is fast becoming a Cotton Belt concern and, regardless of where they are located, producers “need to be aware of what’s going on in their fields.”

Check your local listings for specific time and station. The segment also can be viewed by going to the Audio & Video area on the NCC’s home page, www.cotton.org.

Via a Cotton Foundation project, the NCC also has produced a weed resistance video which soon will be available.

The Western Ginners School in Las Cruces, NM, is set for May 12-14. Registration and course offering information is at http://ncga.cotton.org. If you have questions, please call Betty Thorne or Harrison Ashley at 901-274-9030.

Along with instruction in Levels II and III, the school will feature a Continuing Education (CE) course of particular importance to gin managers.

The CE’s first day will feature a session on the importance of matching gin equipment capacities and a discussion on “Improving Efficiencies and Ginning for Quality” and include both theoretical and practical applications to improve gin capacities and efficiencies.

Day two will focus on quality and include discussions on domestic and world fiber demands, the influence of varieties on quality, harvesting and storage, and the impact of ginning on fiber quality. The CE session also will include a review and instruction at a nearby gin. 

School cooperators include the NCC; National Cotton Ginners Assoc. and its member associations; USDA-ARS; USDA Extension Service; Cotton Incorporated; gin machinery/equipment manufacturers/suppliers; Cooperative State Research, Education and Extension Service; and select land grant universities.

Net export sales for the week ending April 9 were 307,700 bales (480-lb). This brings total ’08-09 sales to approximately 12.4 million bales.

Total sales at the same point in the ’07-08 marketing year were approximately 12.3 million bales. Total new crop (’09-10) sales are 508,000 bales.

Shipments for the week were 240,300 bales, bringing total exports to date to 8.1 million bales, compared with the 8.8 million bales at the comparable point in the ’07-08 marketing year.