Cotton's Week: August 14, 2009

Cotton's Week: August 14, 2009

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Wide Range of Policy Issues Discussed

Producer leaders and Cotton Foundation members discussed a wide range of policy issues at the joint meeting of the American Cotton Producers (ACP) and the Foundation’s annual meeting in Nashville, TN.

Candace A. Thompson, director of the Price Support Division with USDA’s Farm Service Agency (FSA), provided an update on the ’08 farm bill implementation. She indicated that FSA likely would announce the final regulations on the ’10 farm program eligibility provisions in September or October. NCC Conservation Task Force Chairman Jimmy Webb, a Leary, GA, producer, reported on that panel’s meeting and emphasized the importance to producers of participation in the various farm bill conservation programs. He also reported that the NCC would be developing and submitting comments on the Conservation Stewardship Program (see related story). Plains Cotton Grower’s President Barry Evans reported on the availability of a cottonseed crop insurance election pilot program for ’10 in all Cotton Belt regions.

Keith Menchey, NCC manager of Science and Environmental Issues, reported on the status of several important cotton pesticide product registration issues. He also provided a detailed report on climate change legislation that is pending consideration by the Senate this fall.  He updated the attendees on the status of the 6th Circuit Court case regarding NPDES permitting on pesticide applications near water and the status of the Clean Water Restoration Act which would change the definition of “navigable waters” in the Clean Water Act. He also summarized proposed legislative changes regarding food security and its impact on crop production and processing.

John Maguire, NCC senior vice president, Washington Operations, updated attendees on the WTO Brazil case status and reported that the arbitration announcement once again had been delayed until the end of August. He reviewed the NCC’s proposed strategy in responding to the announcement, and reported on several other key trade issues including the Doha Round and several pending bi-lateral trade agreements.

Cotton Incorporated President Berrye Worsham reported on that organization’s proposed ’10 budget and adjustments that were being made to address funding reductions.

NCC President/CEO Mark Lange reported on recent Cotton Council International activities and the impact of budget reductions on that program. He also reviewed the status of the NCC’s Vision 21 project, noting that all three project phases -- which cover detailed demographic consumer studies in China and India, cotton life cycle analysis, and cotton flow research -- were in various stages of implementation, with anticipated completion in late ’10.



Foundation Projects Approved

The Cotton Foundation Board of Trustees approved funding for 25 general research projects totaling $322,000. Approved projects include studies related to pest management, ginning, fiber quality, agronomic practices, plant breeding, education, and textiles. The approval came at the Foundation’s annual membership meeting in conjunction with the ACP.

Mark Nichols, an Altus, OK, producer, was elected Foundation chairman for '09-10. Chuck Coley, a Vienna, GA, producer, was elected president. Re-elected Foundation officers were: Mark Lange, executive vice president; Bill Norman, executive director/secretary; Trent Haggard, allied industry trustee with Case IH, treasurer; and Buzz Shellabarger, assistant treasurer.

In addition, Foundation trustees elected for ’09-10 include producers: Barry Evans, Kress, TX; Cannon Michael, Dos Palos, CA; and Sledge Taylor, Como, MS; and allied industry members: Tim Deutsch, John Deere; Mark Lindsey, DuPont Crop Protection; Rex Martin, Syngenta; Ted McKinney, Dow AgroSciences; Doug Rushing, Monsanto; and Allen Scarborough, Bayer CropScience.



Conservation Programs Reviewed

The NCC’s Conservation Task Force reviewed federal conservation programs and discussed the ways that US cotton producers can improve their odds of acceptance into those programs.

Convening prior to the joint meeting of the ACP/Cotton Foundation, the task force received comprehensive reports on the Environmental Quality Incentives Program, the Conservation Reserve Program and the new Conservation Stewardship Program (CSP).

The task force, chaired by Georgia producer Jimmy Webb, also looked at the CSP’s overall structure and discussed the program’s proposed regulations. Webb indicated that the Task Force would reconvene by conference call in mid-September to further discuss NCC’s comments to USDA on the CSP rule. Comments must be submitted by Sept. 28.

In addition, the task force is considering possible educational efforts to better inform producers of available options within USDA’s myriad of conservation programs.



NCC Urges Support for Fomesafen

The NCC will submit comments to EPA regarding the agency’s draft Ecological Risk Assessment of Fomesafen, the active ingredient of Syngenta’s herbicide Reflex.

At the ACP/Cotton Foundation meeting, NCC’s Keith Menchey called on producers and interest organizations to submit similar comments that urge EPA to utilize current agronomic practices and best scientific information to evaluate pesticides.

The EPA’s draft assessment of Fomesafen stated the product is likely to adversely affect certain endangered plants and animals, and could adversely impact habitats suitable for these endangered plants and animals. EPA proposed possible measures to avoid risk of affecting endangered species, including an 850-foot buffer for ground applications and a 1,000-foot buffer for aerial applications. The assessment used a spray drift model, “AgDRIFT,” and set the spray droplets category as fine to medium. The model’s overly conservative nature was used to set buffer needs.

Reflex has become an important tool in the battle to manage resistant pigweed in the Southeast and Mid-South. The buffer areas proposed by EPA would drastically impact use of the product. A 40-acre field that requires an 850-foot buffer from the field’s edge would result in only five acres being treatable.

Fomesafen is one of the first products evaluated under the EPA’s second cycle of re-registration. The NCC is concerned over the potential precedent being set with the use of an extremely conservative spray drift model. Comments should be submitted by Aug. 21 at http://www.regulations.gov and searching for Docket ID = EPA-HQ-OPP-2006-0239.



13.21 Million Bales Seen For ’09-10

In its August crop report, USDA estimated a ’09-10 US crop of 13.21 million bales, down 40,000 bales from the July report. Upland production was estimated at 12.84 million bales and extra long staple (ELS) production at 367,000 bales.

Harvested area was estimated at 7.77 million acres, implying a non-harvested area of 1.29 million acres based on USDA’s June acreage report. The resulting abandonment rate is roughly 14.24%. The national average yield per harvested acre was estimated to be roughly 816 pounds, 23 pounds below the five-year average.

On a regional basis, the Southeast crop is estimated at 3.15 million bales; Mid-South production is 3.27 million bales; the Southwest upland crop is an estimated 5.74 million bales; and upland production in the West is an estimated 688,000 bales.

The estimated ELS crop of 367,000 bales will be on 146,000 acres with an average yield of 1,205 pounds per harvested acre. State-level details are shown in the accompanying table.

The August USDA reports also project exports and mill use unchanged from last month at 10.20 million bales and 3.50 million bales, respectively. The estimated total offtake stands at 13.70 million bales, resulting in ending stocks of 5.60 million bales. The projected ending stocks-to-use ratio is 40.9%.

The report’s projections lowered ’09-10 world production 80,000 bales from the July report to 105.87 million. Beginning stocks were lowered 100,000 bales from the previous month to 61.85 million. Projected world mill use was raised 140,000 bales to 112.76 million. The projected world ending stocks on July 31, ’10 is now pegged at 57.46 million bales. This has a corresponding stocks-to-use ratio of 51.0%.

U.S. Cotton Crop, ’09-10

 

PLANTED

ACRES

Thou.

HARV.

ACRES

Thou.

YIELD PER

HARV.

ACRE

Lb.

5-YEAR

AVG.

YIELD

Lb.

480-

POUND

BALES

Thou.

UPLAND

 

 

 

 

 

SOUTHEAST

1,880  

1,855 

814  

772 

3,146  

   Alabama

250  

248 

794  

668 

410  

   Florida

65  

63 

724  

745 

95  

   Georgia

980  

970 

841  

792 

1,700  

   North Carolina

380  

375 

800  

813 

625  

   South Carolina

140  

135 

715  

736 

201  

   Virginia

65  

64 

863  

867 

115  

MID-SOUTH

1,675  

1,631 

961  

945 

3,265  

   Arkansas

520  

515 

1,025  

1,052 

1,100  

   Louisiana

240  

235 

858  

884 

420  

   Mississippi

270  

266 

875  

910 

485  

   Missouri

305   

285 

1,061  

997 

630  

   Tennessee

340  

330 

916  

836 

630  

SOUTHWEST

5,115  

3,902 

706  

721 

5,741  

   Kansas

35  

32 

675  

543 

45  

   Oklahoma

180  

170 

836  

718 

296  

   Texas

4,900  

3,700 

701  

724 

5,400  

WEST

235  

231 

1,430  

1,375 

688  

   Arizona

140  

139 

1,450  

1,412 

420  

   California

65  

64 

1,560  

1,414 

208  

   New Mexico

30  

28 

1,029  

960 

60  

TOTAL UPLAND

8,905  

7,619 

809  

829 

12,840  

TOTAL ELS

149  

146 

1,205  

1,267 

367  

   Arizona

1  

1 

997  

866 

3  

   California

130  

127 

1,247  

1,333 

330  

   New Mexico

1  

1 

789  

845 

2  

   Texas

17  

17 

931  

831 

32  

ALL COTTON

9,054  

7,765 

816  

839 

13,207  

Source: USDA-NASS August Crop Production Report.



Southeast Hosts Final ’09 PIE Tour

Arizona, California and New Mexico cotton producers will travel to Georgia on Aug. 17-20 in the fourth Producer Information Exchange (PIE) tour for ’09.

On Aug. 17, the group will visit Swift Spinning Mills in Columbus; Coley’s Gin and Fertilizer and local cotton farms in Vienna; and RCL Farms in Bronwood. On the 18th, they will see a peanut operation at McClesky Mills in Smithfield; visit First United Ethanol and local cotton farms in Camilla; and tour McLendon and Webb Farms in Leary. On the 19th, visits are set for the Bayer CropScience Breeding Facility in Albany, Wavell Robinson Farms and Tim Crosby Farms in Pavo, and the BCT Gin and local cotton farms in Quitman. The trip will conclude on the 20th with a tour of the Archer Daniels Midland oil mill in Valdosta.

Participants include: ArizonaJaime and Joel Belloc, Eloy; Paul and Richard Heiden, Buckeye; and Randi Johns, Goodyear; California – Brent Gilkey, Hanford; Dustin Mancebo, Dos Palos; Bud Mendes, Riverdale; and Jack Seiler, Palo Verde; New Mexico – James Sloan, LaMesa.

Sponsored by Bayer CropScience through a grant to The Cotton Foundation, the PIE helps US cotton producer participants improve yield and fiber quality.



’09-10 Sales, Shipments Start Slow

Outstanding sales of approximately 1.0 million bales (480-lb) on July 31 were carried forward in the ’09-10 marketing year. Combined with net export sales for the week ending Aug. 6, ’09 of 258,600 bales and ’09-10 sales of 1.4 million made in the previous marketing year brings total ’09-10 sales to slightly more than 2.6 million. Total sales at the same point in the ’08-09 marketing year were approximately 4.2 million bales.

Shipments for the week ending Aug. 6 were 138,300 bales, bringing exports to date to 138,300 bales, compared with the 230,800 bales at the comparable point in the ’08-09 marketing year.

Crop year ’08 exports reached slightly more than 13.0 million bales.



Prices Effective Aug. 14-20, '09
Adjusted World Price, SLM 11/16

49.18 cents

*

Fine Count Adjustment ('08 Crop)

 0.00 cents


Fine Count Adjustment ('09 Crop)

  0.00 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 2.82 cents


Import Quotas Open

8


Special Import Quota (480-lb bales)

489,106


ELS Payment Rate

  2.23 cents


*No Adjustment Made Under Step I

 

Five-Day Average



Current 5 Lowest 3135 CFR Far East

65.55 cents


Forward 5 Lowest 3135 CFR Far East

NA


Coarse Count CFR Far East

68.60 cents


Current US CFR Far East

71.55 cents


Forward US CFR Far East

NA


 

'08-09 Weighted Marketing-Year Average Farm Price  
 

Year-to-date (Aug.-June)

48.83 cents

**

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

Sponsored by
Dow AgroSciences