Cotton's Week: August 21, 2009

USDA’s Farm Service Agency announced a schedule of nine public meetings to hear comments on the Supplemental Environmental Impact Statement which will help USDA with an analysis of the proposed changes to the Conservation Reserve Program (CRP).

Locations and dates for meetings in the Cotton Belt are:  Sept. 29, 5 pm at the Oklahoma City Marriott Hotel; Oct. 1, 5 pm at the La Quinta Inn and Suites, Clovis, NM; and Oct. 6, 5 pm at the Hilton Garden Inn, Albany, GA.

According to the USDA announcement, meeting topics to be discussed include “provisions dealing with cropping history requirements, crop rotation practices, contract incentives, program enrollment terms and the CRP enrollment authority of 32 million acres established for the remainder of the 2008 Farm Bill.” USDA will consider comments when preparing the Supplemental Environmental Impact Statement analyzing changes to the CRP as required by the 2008 farm law.

Written comments also can be submitted and are due by Oct. 19 to be considered in preparing the Draft Supplemental Environmental Impact Statement. Comments may be emailed to CRPcomments@tecinc.com or faxed to 757-594-1469.

On June 29, USDA published an interim rule implementing the changes to the CRP as required by the ’08 farm law. That rule was effective on the date of publication. Comments on the interim rule must be filed by Aug. 28 and may be emailed to Robert.Stephenson@wdc.usda.gov or submitted by fax to 202-720-4619.

The NCC’s Conservation Task Force, chaired by Georgia producer Jimmy Webb, recently met to review the proposed rules on CRP and other conservation programs and will prepare comments for submission by the NCC. A copy of the interim CRP rule is available in the Issues Members Only area of the NCC’s website, www.cotton.org.

EPA’s Office of Pesticide Programs (OPP) is considering efforts to examine the impacts of global climate change on pesticide use.

EPA recently met in response to a letter from environmental groups who called on EPA to: 1) strengthen pesticide regulation to address climate impacts and 2) incorporate these considerations into EPA’s current registration review. The letter was signed by representatives of the Sierra Club, Natural Resources Defense Fund, Center for Environmental Health, Defenders of Wildlife, Pesticide Action Network-North America, and the Center for Biological Diversity.

In the letter, the groups described some of the key challenges OPP could face as the climate changes, including an increase in the total loads and changes in the geographic distribution of pesticides; changes in pesticide decomposition; and increased sensitivity of ecosystems to chemicals loads. For example, the activists say that EPA should focus on dose-response changes as the temperature changes because animals suffering from heatstroke caused by higher temperatures could be more prone to adverse effects of pesticides.

Several groups also are raising concerns about the agricultural offsets provisions in the Waxman/Markey bill which, they claim, will increase the use of no-till farming, a practice that can result in increased pesticide use. To address this concern, some groups are calling for the Senate to create an environmental performance standard to ensure agricultural offsets do not result in increased chemical use. EPA’s OPP, though, already has established a special climate team to address pesticide issues and to make recommendations for next steps.

USDA has amended the availability of credit guarantees for sales of US agricultural commodities under the Commodity Credit Corp.'s (CCC) Export Credit Guarantee Program (GSM-102) for FY09. The newly announced funds, which are available to all eligible commodities, cover several key markets for US cotton fiber, yarn, fabric and cotton products.

For Turkey, the announcement adds $50 million, bringing the total FY09 allocation to $500 million. Mexico receives an additional $75 million in funds, bringing their total allocation to $300 million; the Caribbean region receives an additional $50 million, for a total allocation of $425 million; and the Central American region receives an additional $75 million, giving a total for the region of $725 million.

The USDA announcement cancels $25 million specifically designated for yarn and fabric. Cotton industry organizations anticipated the CCC’s cancellation and reissuance of the funds due to the continued reluctance of Central American banks to use the program despite the US industry’s ongoing educational efforts regarding program benefits.

The GSM-102 program helps ensure that credit is available to finance commercial exports of US agricultural products to developing countries, while providing competitive credit terms in these countries. Under this program, CCC reduces the financial risk to lenders by guaranteeing payments due from approved foreign banks to exporters or financial institutions in the United States. Additional country allocations can be found at http://www.fas.usda.gov.

The NCC will conduct its Mid-Year Board of Directors meeting on Aug. 24-26 at The Ritz-Carlton Hotel on Amelia Island, FL.

NCC Board committees will meet on Monday afternoon, Aug. 24, and Tuesday morning, Aug. 25. Cotton Council International’s (CCI) Board of Directors meets Tuesday morning, followed by the NCC Board’s open session that afternoon.  The NCC Board’s executive session is scheduled for Wednesday morning, Aug. 26.

During Tuesday afternoon’s open session, Jay Hardwick will begin with the NCC chairman’s report. Other reports will be provided by NCC vice presidents Gary Adams (economic outlook) and John Maguire (Washington Update). Robert Lehman, Squire Sanders Public Advocacy, will brief attendees on trade issues. CCI President Clyde Sharp will report on that association’s activities, and Bruce Heiden will provide a Committee for the Advancement of Cotton update.

Several farm groups and FMC Corp., the manufacturer of carbofuran (Furadan), have taken the unusual step of seeking an administrative law review hearing of an EPA decision to revoke the pesticide’s tolerances.

The Federal Food, Drug and Cosmetic Act of 1938 requires the agency to “hold a public evidentiary hearing” if the Administrator determines it is necessary “to receive factual evidence relevant to material issues of fact raised by the objections.” If EPA grants the industry request for a hearing, it will be the first under the Food Quality Protection Act of 1996 and the only one since the agency held a hearing on its ’87 decision to address diazinon.

EPA revoked all tolerances for carbofuran in May, after trying unsuccessfully for several years to ban the pesticide by canceling its registered uses.

FMC defended the pesticide from EPA’s efforts instead of taking the usual course of voluntarily withdrawing its products as most other manufacturers do. FMC voluntarily canceled some registered uses, including cotton, last September in an effort to “lower the risk cup” so company officials could argue that revoking all tolerances was not necessary.

Agricultural interests believe that EPA decided to revoke the product’s tolerances as an easier way of removing the chemical from the markets, in part, because the agency did not have to conduct a cost-benefit analysis. This process is unusual and establishes a dilemma for farmers who legally can use the product on registered crops but cannot sell them because there is no longer a tolerance for any remaining residue.

Grower associations, through the Pesticide Policy Coalition, sent a letter to USDA Secretary Tom Vilsack asking him to “consider approaching EPA and request that EPA withdraw and suspend the tolerance revocation and that EPA resume the FIFRA process in which the USDA benefits analysis and the concerns of selected growers would be considered.”  

Furadan is important for the control of late season aphids in cotton. Although not registered for foliar application, cotton producers have been using the product under Section 18 emergency exemptions. The revocation of tolerances will prohibit any future Section 18 requests.

NCC staff has worked with FMC for many years, providing data and engaging with EPA officials, to preserve this product’s use.

In a recent brief, FMC together with the National Corn Growers Assoc., the National Potato Council and the National Sunflower Assoc. called for the evidentiary hearing, saying the agency has not adequately demonstrated risks for residues on corn, sunflowers and pumpkins domestically, and import tolerances for bananas, coffee, rice and sugarcane. The NCC was not a part of this effort because FMC voluntarily has cancelled cotton uses.

There is no deadline for an agency response.

Net export sales for the week ending Aug. 13 were 39,200 bales (480-lb). This brings total ‘09-10 sales to approximately 2.7 million bales. Total sales at the same point in the ’08-09 marketing year were approximately 4.4 million bales.

At this early stage of the ’09-10 marketing year, Mexico is the largest buyer of US cotton, with purchases of 824,000 bales. Turkey currently ranks 2^nd with 351,000 bales, while China is the 3^rd largest import customer at 283,000 bales. Indonesia and Thailand complete the top five.Total new crop (’10-11) sales are 81,600 bales.

Shipments for the week were 152,600 bales, bringing total exports to date to 290,900 bales, compared with the 508,900 bales at the comparable point in the ’08-09 marketing year.