Cotton's Week: May 1, 2009

Cotton's Week: May 1, 2009

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FY10 Budget Resolution Passed

The House (233-193) and Senate (53-43) approved a $3.555 trillion budget resolution for FY10.

While non-binding, the resolution sets the framework for Congress to write legislation on appropriations, taxes and entitlement programs. The resolution does not include any reference to reductions in spending for agriculture. It does include so-called reconciliation instructions which could be used to move legislation overhauling healthcare and sharply curtailing the role of private lenders in federal student aid programs through Congress without a Senate filibuster.

The resolution, which passed without Republican support, is projected to increase the public debt from $7.7 trillion in ’09 to $11.5 trillion in ’14. Measured as a percentage of the economy, the debt rises from 55.0% to 66.7% of gross domestic product.

The annual deficit is projected to decline from $1.693 trillion for FY09 to $1.2 trillion in ’10 to $523 billion in ’14. The budget caps discretionary spending at $1.086 trillion, of which $556.1 billion is for defense.



NCC Discusses WTO-Related Concerns

NCC Vice Chairman Eddie Smith, producer from Floydada, TX, was joined by NCC President/CEO Mark Lange and NCC Senior Vice President of Washington Operations John Maguire in a meeting with the new US Trade Ambassador Ron Kirk.

The NCC representatives discussed the cotton industry’s concerns with the continuing World Trade Organization (WTO) Doha negotiations, the ongoing WTO Brazil cotton case and issues with market access in China, particularly the new AQSIQ registration process. The NCC has maintained that the ambitious disciplines on domestic support in the Doha text are not being matched with gains in market access.

Ambassador Kirk and his staff were attentive and indicated they would continue to seek industry input in trade negotiations. The NCC representatives expressed appreciation for the excellent response by USTR officials on the AQSIQ China cotton registration process and the WTO Brazil cotton case.



Some CRP Contracts Extended

Agriculture Secretary Tom Vilsack announced that USDA's Farm Service Agency (FSA) will offer certain producers the opportunity to modify and extend their Conservation Reserve Program (CRP) contracts that are scheduled to expire on Sept. 30, ’09. (see full release in the Newsroom area of www.usda.gov.)

USDA can only extend about 1.5 million acres out of a total of 3.9 million acres expiring this year. This extension will ensure that FSA meets the statutory CRP acreage limitation of 32 million acres established in the Food, Conservation, and Energy Act of 2008.

A general CRP signup is not scheduled during FY09. However, producers may continue to enroll relatively small, highly-desirable acreages, including land that is not extended, into Continuous CRP. Continuous CRP includes such practices as filter strips and riparian buffers.

FSA will notify participants by letter beginning May 6, ’09. The sign-up for this voluntary extension will begin on May 18 and run through June 30, ’09. Farmers and ranchers may apply for this extension at their FSA county office.

For more information, visit your county FSA office or http://www.fsa.usda.gov.



Weed Resistance Video Now Online

In conjunction with the NCC’s Weed Resistance Learning Module, a video on weed resistance is now available along with the module on the NCC’s website at http://www.cotton.org/tech/pest/index.cfm.

In the video, four cotton producers with first-hand knowledge of weed resistance discuss why it must not be ignored and provide valuable information on how to deal with this menace. The video supplements the free online Learning Module aimed at helping cotton producers stay ahead of the game in fighting weed resistance, thus maintaining long-term stewardship of their acreage.

The course is supported by The Cotton Foundation via grants from Monsanto, Syngenta and Dow AgroSciences.



Nomination for USDA Post Announced

President Obama has announced his intent to nominate Edward M. Avalos as under secretary for USDA’s Marketing and Regulatory Programs.

"Edward Avalos has spent a lifetime in agriculture, including 34 years in agricultural marketing," Agriculture Secretary Tom Vilsack said. "He has spearheaded innovative marketing techniques which have improved the economic viability of rural areas and established export marketing programs which have placed American crops on tables around the world. He brings extensive knowledge and a successful track record in both domestic and international marketing.

Avalos has served with the New Mexico Dept. of Agriculture for 29 years where he established the New Mexico Specialty Crops Program. This program provides matching funds to entities which can improve rural economies and need assistance with marketing projects for specialty crops and value-added products. He also spent five years with the Texas Dept. of Agriculture. He has implemented many trade promotions and trade missions during his career. He has worked in Mexico, Japan, China, Canada and Latin America, promoting New Mexican crops and livestock.

Avalos was raised on a family farm in New Mexico's Mesilla Valley which produced cotton, wheat and a variety of specialty crops. He is a member of several agricultural promotion organizations in the state and received his Bachelors and Masters degrees from New Mexico State U.



NCC Testifies in Formaldehyde Hearing

The NCC was represented at a “Formaldehyde in Textile and Consumer Products” hearing held by the Consumer Protection, Product Safety, and Insurance Subcommittee of the Senate Committee on Commerce, Science, and Transportation.

Formaldehyde-containing chemicals are used mainly on cotton and cotton blends and other cellulosic textiles for easy-care/wrinkle resistance for sheeting, shirting, dress goods, knits, and slacks; for some textile pigment dyeing and pigment printing; and for some flame retardance. Easy care/wrinkle resistance cotton apparel accounts for 2% of the total apparel offerings at retail in the United States and for 13% of total cotton apparel purchased in ’08, according to Cotton Incorporated. There almost is no easy care children’s apparel and very little children’s wear is treated with formaldehyde-containing chemicals of any kind.

Sen. Casey (D-PA) said in his opening testimony that formaldehyde in textiles presents a big health risk to the public. He pointed to the regulations of other countries which limit the amount of formaldehyde in textiles and said his impression is that the Consumer Products Safety Commission (CPSC) has not done enough to understand the risks posed by the chemical, especially to children. Dr. David Brookstein, a Philadelphia U. School of Engineering and Textiles professor, said that because the United States imports the vast majority of clothes people buy, this apparel could be made in countries that allow formaldehyde use at levels that US standards might prohibit – a potentially big health problem to US consumers.

Dr. Phillip Wakelyn, a former NCC employee, was invited to testify at the hearing by Sen. Wicker (R-MS), the subcommittee’s ranking member.

Dr. Wakelyn’s testimony reflected the views and concerns of a broad coalition of textile and apparel interests, including the NCC, the National Council of Textile Organizations, the National Textile Assoc., the American Manufacturing Trade Action Coalition and the American Apparel & Footwear Assoc.

Wakelyn testified that there have been no valid safety-related problems raised in the United States concerning the low levels of formaldehyde on clothing and textiles. He stated there are many reasons other than textile processing chemical additives that can cause non-specific irritation/allergic contact dermatitis – which often incorrectly is blamed on formaldehyde.

He explained that strong evidence from CPSC studies, the textile industry and others over the last 30 years indicates that formaldehyde in textiles does not pose an unreasonable risk of injury to consumers. He also said that because of the federal, state and volunteer regulations/guidelines already in place concerning formaldehyde and textiles, there is no need for legislative or regulatory action concerning formaldehyde and textiles unless the results of the General Accounting Office (GAO) study, required by the Consumer Product Safety Improvement Act, indicate that action is necessary.

At the end of the hearing, Sen. Casey - in acknowledging the extent of research done by CPSC and others - said the GAO study to update research on the use of formaldehyde in textiles should be completed before taking any further action. He also recommended that CPSC consider issuing guidance concerning textiles and formaldehyde.



USDA Approves ’09 Bale Specs

The NCC was notified that the 2009 Specifications for Cotton Bale Packaging Materials were approved by USDA's Commodity Credit Corp. (CCC). CCC’s letter notified the Joint Cotton Industry Bale Packaging Committee (JCIBPC) that "…the revised specifications for packaging ’09-crop cotton are approved for Commodity Credit Corporation loan program purposes."

The ’09 Specifications booklet is published electronically by the NCC and only available on the NCC’s web site at: http://www.cotton.org/tech/bale/specs/index.cfm. Archived versions of previous years’ specifications also are available on the NCC’s website.

The ‘09 Specifications are identical to the previous crop year’s specifications. Manufacturers, fabricators and vendors of approved materials are being alerted of the USDA’s early approval and reminded of the obligation to continue using the specifications as guidelines when manufacturing bagging and ties for use on the ’09 crop. Commercial firms also are reminded that the ’08 Specifications as well as the ‘09 Specifications contain a section dealing specifically with their obligation to provide a “certificate of analysis” when requested by their materials’ users.



Guide Promotes Safe Trucking in Ag

The Agricultural and Food Transporters Conference (AFTC) of the American Trucking Associations (ATA) announced an effort to educate the agricultural industry about the importance of safe operation on rural roads and highways during planting and harvest seasons.

The purpose of the “Manager’s Guide to Safe Trucking During Agricultural Planting and Harvest Season” is to educate truck drivers and their managers in the agricultural industry about the importance of safe operation during agriculture’s busy seasons and give them active strategies they can apply.

While government regulations limit the working hours of most truck drivers, certain agricultural haulers are allowed specific exemptions from the Hours of Service regulations. The AFTC reminds the agricultural industry that it is critically important that drivers and managers employ active strategies to ensure safety to make sure agriculture can maintain this exemption for the harvest season.

The free guide can be accessed, including downloading/printing, from the NCC’s home page, www.cotton.org, as well as at http://www.truckline.com/Federation/Conferences/AFTC.



Sales Slip, Shipments Rebound

Net export sales for the week ending April 23 were 221,900 bales (480-lb). This brings total ’08-09 sales to more than 12.8 million bales. Total sales at the same point in the ’07-08 marketing year were about 13.1 million bales. Total new crop (’09-10) sales are 618,300 bales.

China, with 3.8 million bales of US purchases, accounts for 30% of ’08-09 sales. Turkey’s purchases of 1.6 million bales ranks second with 12% of the total. Mexico remains a solid customer of US cotton with purchases of 1.4 million bales. Indonesia and Pakistan complete the top five with purchases of 1.1 million bales and 743,000 bales, respectively.

Shipments were 300,000 bales, bringing total exports to date to 8.7 million bales, compared with the 9.3 million bales at the comparable point in the ’07-08 marketing year. To reach USDA’s projected ’08-09 exports of 12.5 million bales, weekly shipments must average approximately 273,000 bales for the remainder of the marketing year.



Prices Effective May 1-7, '09

Adjusted World Price, SLM 11/16

41.95 cents

*

Fine Count Adjustment ('07 Crop)

 1.40 cents


Fine Count Adjustment ('08 Crop)

  1.00 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 10.05 cents


Import Quotas Open

3


Limited Global Import Quota (480-lb bales)

214,299


ELS Payment Rate

  8.83 cents


*No Adjustment Made Under Step I

 

Five-Day Average

 

Current 5 Lowest 3135 CFR Far East

 58.72 cents


Forward 5 Lowest 3135 CFR Far East

NA


Coarse Count CFR Far East

58.22 cents


Current US CFR Far East

59.80 cents


Forward US CFR Far East

NA


 

'08-09 Weighted Marketing-Year Average Farm Price  
 

Year-to-date (Aug.-March)

49.74 cents

**

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

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