Cotton's Week: July 2, 2009

Cotton's Week: July 2, 2009

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NCC Issues Action Alert on Food Safety Bill

NCC is encouraging its members to contact their Congressman and convey concerns regarding H.R.2749. Industry members should stress that the bill should not be voted on until it is referred to the House Agriculture Committee for consideration.

On June 17, the House Energy and Commerce Committee approved a comprehensive piece of food safety legislation, H.R. 2749, the Food Safety Enhancement Act of 2009. This bill would expand significantly the authorities of the Food and Drug Administration (FDA) to regulate and oversee on-farm production activities. Agricultural organizations have expressed a number of concerns to Congressional members, including:  

·        The requirement for FDA to promulgate regulations for on-farm activities such as the safe growing, harvesting, and holding of raw agricultural commodities, manure use, and water quality.

·        The requirement that each farmer maintains production and sales records showing every buyer to which the farm’s products are sold (with the exception of products sold directly to final consumers or restaurants). 

·        The authority of a federal official to have access to and copy all records, including production and sales records, that may be related in any way to food or feed safety.

·        FDA’s requirement to issue fines for criminal and civil penalties, which may be as much as $20,000 per day for an individual farmer.

Many of these authorities would be redundant with regulatory oversight already used by USDA, affecting agricultural production practices that FDA does not have the personnel, funding, knowledge, expertise or time to regulate. Further, several of the bill’s provisions violate US trade commitments and would invite retaliation by our trading partners against US agricultural exports.

H.R.2749 will be voted on by the House later this summer.



USDA Now Sees 9.05 Million ’09 Acres

In its June acreage report, USDA estimated ’09 US cotton plantings at 9.05 million acres, down 4% from ’08, but up 242,900 acres from their initial ’09 estimate released in March.

Upland planted area is estimated to have decreased 4% percent to 8.91 million acres from ’08. ELS cotton producers planted 149,400 acres, down 14% from ’08. State-level details are in the table below.

’09 U.S. COTTON PLANTINGS

 

 

2008 Actual

(Thou.) 1/

2009 Estimated

(Thou.) 1/

Percent Change

 

SOUTHEAST

1,923 

1,880 

-2.2% 

   Alabama

290 

250 

-13.8% 

   Florida

67 

65 

-3.0% 

   Georgia

940 

980 

4.3% 

   N. Carolina

430 

380 

-11.6%  

   S. Carolina

135 

140 

3.7% 

   Virginia

61 

65 

6.6% 

MID-SOUTH

1,876 

1,675 

-10.7% 

   Arkansas

620 

520 

-16.1% 

   Louisiana

300 

240 

-20.0% 

   Mississippi

365 

270 

-26.0% 

   Missouri

306 

305 

-0.3% 

   Tennessee

285 

340 

19.3% 

SOUTHWEST

5,205 

5,115 

-1.7% 

   Kansas

35 

35 

0.0% 

   Oklahoma

170 

180 

5.9% 

   Texas

5,000 

4,900 

-2.0% 

WEST

292 

235 

-19.5% 

   Arizona

135 

140 

3.7% 

   California

120 

65 

-45.8% 

   New Mexico

37 

30 

-18.9% 

TOTAL UPLAND

9,296 

8,905 

-4.2% 

TOTAL ELS

174 

149 

-14.1% 

   Arizona

1 

1 

25.0% 

   California

155 

130 

-16.1% 

   New Mexico

3 

1 

-48.1% 

   Texas

16 

17 

9.7% 

ALL COTTON

9,470 

9,054 

-4.4% 

1/ USDA-NASS



Acreage Reporting Dates Extended

USDA’s Farm Service Agency extended acreage reporting dates to Aug. 14.

According to Notice CP-647 “because of extreme weather conditions, many producers have not filed a 2009 acreage report, requested prevented planting or reported failed acreage as applicable” and this will result in a large number reporting acreage in a short time frame, creating a heavy work load for county offices. Therefore, ’09 crop year final reporting deadlines are extended to Aug. 14 for crops whose reporting deadlines have not passed before issuance of the notice (June 30). Late fees will not apply if acreage reports are filed by Aug. 14, but will apply for late-filed reports after Aug. 14.

The reporting deadline for prevented planting or failed acreage also is extended to Aug. 14.



SURE Eligibility Provisions Published

A final rule in the Federal Register implements the general eligibility provisions for all supplemental agricultural disaster assistance programs authorized by the ’08 farm law, including the Supplemental Revenue Assistance Payments Program (SURE), which covers general crop production losses. The general eligibility provisions include, but are not limited to, payment limits, adjusted income means tests, and risk management purchase requirements.

The July 2-published rule, at http://www.gpoaccess.gov/fr/, also implements the specific rules of the Livestock Indemnity Program, but indicates that specific provisions of SURE and other disaster programs will be addressed through separate rulemaking.

After review, NCC staff will provide a detailed summary of the current rule and continue to monitor developments regarding the forthcoming SURE regulation.



Decision in Brazil Case Delayed

The World Trade Organization arbitration panel informed Brazilian and US government officials that the award decision in the ongoing arbitration phase has been delayed beyond the previously announced June 30 date.

The final decision, now reported to be released on Aug. 14, will establish a monetary award for damages caused by certain provisions of the cotton program and the export credit guarantee program. Brazil is claiming damages of $2.5 billion and requesting that the panel authorize cross-retaliation rather than limit retaliation solely to countervailing duties to US agricultural products. The United States has countered that any damages should be less than $30 million.

The NCC continues to stress that today’s cotton market is much different than the time of the original dispute – ’02-05. Given changes in US production and farm programs, no credible evidence can be found that would support a finding that the US cotton program is causing economic injury to Brazil.



House Passes Climate Change Bill

The House, late on June 26, narrowly passed (219-212) the American Clean Energy and Security Act, H.R. 2454 (the Waxman/Markey bill), which would establish a cap-and-trade program to reduce US greenhouse gas emissions. Voting against the bill were 44 Democrats – many of them Sunbelt members of the Blue Dog coalition. Only eight Republicans voted in favor of the bill.

Support for the bill increased after intense negotiations with rural electric cooperatives, biofuel interests and House Agriculture Chairman Collin Peterson (D-MN) resulted in amendments to the original bill. The amendment specifically will exempt agriculture and forestry from emission reduction requirements and will allow for agricultural offsets to be sold within CFTC-regulated markets. A major victory for Chairman Peterson was the agreement that USDA will be exclusively in charge of implementing and operating the agriculture and forestry offset program. House Energy and Commerce Chairman Waxman and environmentalists were insisting that EPA oversee the program. The complete agriculture amendment is at http://agriculture.house.gov/climchange002_alt_xml.pdf. NCC, upon analysis of the bill’s impact on the US cotton industry, expressed support for the amendment negotiated by Chairman Peterson but opposed the bill. NCC’s position is accessible at www.cotton.org.

Senate Environment and Public Works Chairwoman Boxer (D-CA) is expected to begin hearings on climate change legislation on July 7 with testimony from Energy Secretary Steven Chu, EPA Administrator Lisa Jackson and Agriculture Secretary Tom Vilsack.

Boxer has said she intends to mark up legislation modeled on the House bill in the committee before the August recess. Majority Leader Reid (D-NV) has given other committees with jurisdiction, including agriculture, a Sept. 18 deadline to complete their own markups.

In preparation for Senate action, Chairman Boxer has been holding regular Tuesday meetings with a core group of 25 Democrats for whom climate legislation is a top priority. That group is building a legislative strategy focused on reaching out to the key moderates whose votes are essential to building the 60-vote filibuster-proof majority needed to pass the bill through the Senate.

Meanwhile, the White House is stepping up its campaign to promote the global warming initiative in farm country, as part of a “rural tour” that kicked off July 1. The President announced that Agriculture Secretary Vilsack will lead the Obama Administration's Rural Tour. Included in the tour are events in Virginia, North Carolina, Louisiana and New Mexico. More details are at USDA’s website, www.usda.gov, by clicking on Newsroom and then Latest Releases.



USDA Issues CRP Rule

USDA issued an interim final rule for the Conservation Reserve Program (CRP) with request for comments to be received by Aug. 28, ’09.

The rule makes several changes to the program included in the ’08 farm law. The rule outlines the changes to the new payment limit and adjusted gross income (AGI) requirements and the Farmable Wetlands Program in addition to other changes to CRP.

Under the new regulations, payments from CRP will be limited to $50,000 per person or legal entity, and an individual’s three-year average AGI must not exceed $1 million unless two-thirds of the income is considered farm income. The rule also notes changes to the Farmable Wetlands Program to include land that is devoted to commercial pond-raised aquaculture and wetlands that are developed to provide nitrogen removal for row crops.

NCC staff will continue reviewing the rule and prepare comments in consult with the NCC Conservation Task Force.



Court Rules on H2-A Changes

A US District Court ruled for the plaintiffs and granted a motion for a preliminary injunction, thus preventing suspension of the H2-A Final Rule implemented late in the Bush Administration.

The court’s decision means the rule that went into effect on Jan. 17, ’09 remains in place for now and supersedes the final rule announced on May 29, ’09 {see May 29 Cotton’s Week} that would have suspended the January rule for a nine month period.

The Jan. 17 rule is viewed as a step forward for H2-A reform as it streamlined the program in many areas and attempted to make the program work better for employers. The rule was crafted after Congress was unable to pass comprehensive immigration reform legislation that would have further streamlined the H2-A program.

It is not clear what the Labor Department’s next step will be in relation to this ruling. NCC will continue to monitor.



Sales Steady, Shipments Strong

Net export sales for the week ending June 25 were 168,800 bales (480-lb). This brings total ’08-09 sales to 14.1 million bales. Total sales at the same point in the ’07-08 marketing year were 15.4 million bales. Total new crop (’09-10) sales are 1.0 million bales.

Shipments were 356,500 bales, bringing total exports to date to 11.8 million bales, compared with the 12.1 million bales at the comparable point in the ’07-08 marketing year.

With approximately one month remaining in the marketing year, weekly shipments must average 184,000 bales to reach the USDA projection of 12.7 million bales. Based on shipments of the previous five weeks of this season or the last five weeks of ’07-08, US exports are on track to exceed 13.0 million bales.



Prices Effective July 3-9, '09

Adjusted World Price, SLM 11/16

44.57 cents

*

Fine Count Adjustment ('08 Crop)

 0.54 cents


Fine Count Adjustment ('09 Crop)

  0.34 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 7.43 cents


Import Quotas Open

8


Special Import Quota (480-lb bales)

491,900


ELS Payment Rate

  6.23 cents


*No Adjustment Made Under Step I

 

Five-Day Average



Current 5 Lowest 3135 CFR Far East

61.34 cents


Forward 5 Lowest 3135 CFR Far East

64.17 cents


Coarse Count CFR Far East

60.98 cents


Current US CFR Far East

60.75 cents


Forward US CFR Far East

65.85 cents


 

'08-09 Weighted Marketing-Year Average Farm Price  
 

Year-to-date (Aug.-May)

48.94 cents

**

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

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