Cotton's Week: December 11, 2009

Cotton's Week: December 11, 2009

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’09 Crop Estimate Raised

In its December report, USDA sees a ’09-10 US crop of 12.59 million bales, up 90,000 bales from the November report. Upland production was estimated at 12.23 million bales and extra long staple (ELS) production at 367,000 bales.

Harvested area was estimated at 7.73 million acres, implying a non-harvested area of 1.41 million acres. The resulting abandonment rate is 15.4%. The national average yield per harvested acre is estimated to be 782 pounds, 57 pounds below the five-year average.

Relative to the November report, increases in parts of the Southeast, Southwest and California more than offset the reduction in the Mid-South crop. State-level estimates are provided in the accompanying table.

US Cotton Crop, ’09-10

 

PLANTED

ACRES

Thou. 1/

HARV.

ACRES

Thou.

YIELD PER

HARV.

ACRE

Lb.

5-YEAR

AVG.

YIELD

Lb.

480-

POUND

BALES

Thou.

UPLAND

 

 

 

 

 

SOUTHEAST

1,892  

1,869 

881  

772 

3,432  

   Alabama

255  

250 

710  

668 

370  

   Florida

82   

81 

664  

745 

112  

   Georgia

1,000  

990 

907  

792 

1,870  

   North Carolina

375  

370 

986  

813 

760  

   South Carolina

115  

114 

842  

736 

200  

   Virginia

65  

64 

900  

867 

120  

MID-SOUTH

1,620  

1,553 

828   

945 

2,680  

   Arkansas

520  

500 

826  

1,052 

860  

   Louisiana

230  

225 

704  

884 

330  

   Mississippi

295  

285 

758  

910 

450  

   Missouri

275  

263 

949  

997 

520  

   Tennessee

300  

280 

891  

836 

520  

SOUTHWEST

5,236  

3,927 

659  

721 

5,388  

   Kansas

36  

32 

720  

543 

48  

   Oklahoma

200  

195 

837  

718 

340  

   Texas

5,000  

3,700 

649  

724 

5,000  

WEST

241  

237 

1,468  

1,375 

725  

   Arizona

140  

139 

1,450  

1,412 

420  

   California

71  

70 

1,714  

1,414 

250  

   New Mexico

30  

28 

943  

960 

55  

TOTAL UPLAND

8,989  

7,586 

774  

829 

12,225  

TOTAL ELS

150  

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

9,139  

7,732 

782  

839 

12,592  

Source: USDA-NASS December Crop Production Report.
1/ Updated from June Acreage Report.



US Mill Use Unchanged, Exports Up

In its December report, USDA puts ’09 US mill use unchanged from November at 3.40 million bales with exports rising to 11.00 million bales, up from 10.50 million bales. This generates a total ’09-10 offtake of 14.40 million bales. Ending stocks for ’09-10 are projected to be 4.50 million bales for an ending stocks-to-use ratio of 31.3%.

For the ’08-09 crop year, USDA gauged US cotton production at 12.82 million bales. Estimated mill use and exports were unchanged from the November report at 3.59 million and 13.28 million bales, respectively. Total offtake for the ’08-09 crop year is estimated at 16.86 million bales. Ending stocks were 6.34 million bales and the stocks-to-use ratio was 37.6% for the ’08-09 marketing year.

In USDA’s December report, expected ’09-10 world production estimates were lowered 20,000 bales from the November report to 102.72 million bales. World mill use was raised 990,000 bales from the November report to a projected 114.51 million bales. Consequently, world ending stocks for ’09-10 are projected to be 51.81 million bales for a stocks-to-use ratio of 45.2%.

For the ’08-09 marketing year, USDA estimated world production at 107.48 million bales, down 100,000 bales from the previous month. Estimated world mill use rose 30,000 bales to 111.13 million bales. World ending stocks on July 31, ’09, are now estimated at 61.12 million bales. This has a corresponding stocks-to-use ratio of 55.0%.



EPA Cites Greenhouse Gases’ Threat

EPA announced its “endangerment finding” that greenhouse gases (GHGs) threaten the public health and welfare of the American people and that GHG emissions from on-road vehicles contribute to that threat.

These findings respond to the ’07 Supreme Court decision that GHGs fit within the Clean Air Act (CAA) definition of air pollutants. EPA’s endangerment finding covers emissions of six key greenhouse gases – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. The endangerment finding is a necessary precondition under the CAA to regulatory action.

Earlier this year, the Obama Administration proposed new rules limiting greenhouse gas emissions from cars and light trucks. Those rules, which have been broadly accepted by industry and will be accompanied by increases in fuel economy standards, now will be finalized.

The finding also allows the EPA to regulate emissions from stationary sources, including power plants, refineries and factories.

To date, EPA Administrator Lisa Jackson has offered no specific proposals except a “tailoring rule” that raises the statutory threshold for regulation from 100 to 25,000 tons or more a year of carbon emissions.

Both President Obama and Jackson have stated publicly that they support legislative action on climate change. The threat of regulating GHGs under CAA has been used by some as the impetus for cap and trade legislation. On the other hand, EPA has neither the resources nor the means to regulate what would amount to 70% of the American economy under the CAA.

EPA’s announcement came on the opening day of the Copenhagen Conference, which is being attended by 15,000 delegates from 192 nations to forge a new international agreement on GHG reductions in the wake of the Kyoto Protocol that expires in ’12. President Obama's decision to attend the end of the conference has been viewed as a signal that an agreement was getting closer.

Meanwhile, Sens. Kerry (D-MA), Lieberman (I-CN) and Graham (R-SC) announced they were sending a framework for their climate change legislation to President Obama that proposes a 17% emissions reduction from ’05 levels by ’20 and an 80% reduction in the long term.

Sen. Kerry indicated that full legislation will hit the Senate floor sometime in the spring. Sen. Graham said nuclear power will be "embraced" in the framework and added a short-term goal of six to eight new plants in the short term would show a strong commitment.



Spray Drift Comment Period Extended

The EPA is soliciting public comment on proposed guidance for new pesticide labeling to reduce off-target spray and dust drift.

According to the agency, the new instructions, when implemented, will improve the clarity and consistency of pesticide labels to help prevent spray drift harm. The new instructions will prohibit drift that could cause adverse health or environmental effects.

EPA says the new guidance documents released on Nov. 4, which are at http://www.epa.gov/opp00001/factsheets/spraydrift.html, contain a "general statement" about drift for pesticide labels based on product type; examples of product-specific use restrictions, such as "no-spray” buffer zones, or requirements related to droplet or particle size, nozzle height, or weather conditions at the time of application;" and guidance for applicants and makers on how to implement the new statements on product labels. On a pesticide-by-pesticide basis, the agency will evaluate scientific information on risk/exposure based on individual product use patterns.

Agricultural interests have, in the past, warned of the infeasibility of a zero drift policy. There also is concern that the vagueness of some terminology, such as “could cause harm,” will lead to unnecessary enforcement actions and frivolous lawsuits.

EPA had set a public comment deadline of Jan. 4, ’10. The NCC and several agriculture and pesticide groups, though, requested a 90-day extension to more closely understand the impact on farming operations. In response, EPA granted a 60-day extension with comments now due on March 5.



Enhanced Exposure Assessments Proposed

EPA announced it plans to enhance its assessment of pesticide exposure risks to workers, including farm workers and farm children.

Under the policy, EPA risk assessments for children, farm workers and others would consider aggregate pesticide exposures from all sources including food, drinking water and residential uses. EPA also would apply an additional safety factor to protect infants and children from the risks of pesticides via occupational exposures.

The Food Quality Protection Act of ’96 required EPA's pesticides office to begin applying an additional 10X uncertainty or safety factor where the available data are incomplete when setting exposure standards for pesticides thought to particularly affect children in the general public. Thus far, the agency only has considered dietary exposures to children when applying the factor. Now, EPA says it intends to apply these new risk assessment methods to any pesticide risk assessment.

The agency also is proposing to require reporting of potential risks for children aged 12-17 who work on farms or are taken into agricultural fields when their parents work.

The proposed policy will be available for a 60-day public comment period after it is published in the Federal Register. More information on the proposed policy is at http://www.epa.gov/pesticides/health/worker-rsk-assmnt.html.



America’s Heartland Reaches Milestone

America’s Heartland has reached an important milestone -- broadcasting its 100th episode to audiences on Public Television and RFD TV.

Now in its fifth successful season, America’s Heartland gives urban viewers up-close and personal insights into the lives of the farm and ranch families providing food, feed, fuel and fiber to our nation and the world. All of these efforts help bridge the gap of understanding about agriculture’s importance.

Produced by KVIE Television in Sacramento, the program’s 100th episode explores how animal welfare is a key element of a century old Kansas ranching operation; what steps a Georgia farmer takes to ensure food safety issues on produce that goes from his farm to supermarkets; how a Michigan farming operation, run by women, educates city youngsters about agriculture; and how a California ranch has taken the lead in protecting America’s wild mustang population. In addition, two special educational segments look at the nutritional value of kiwis and how vinegar is created for customers who like different flavors on their salads.

In addition to its weekly broadcasts, the America’s Heartland website at www.americasheartland.org provides videos, educational materials and links to consumers who want to know more about the program and about US agriculture.



Cotton’s Week Email Exclusive

Beginning on Jan. 8, ’10, the Cotton’s Week newsletter will be distributed to NCC members by email only and no longer by regular mail. NCC members who have not yet provided the NCC with their email addresses should send them to memberservice@cotton.org as soon as possible.

The newsletter will continue to be posted on the NCC’s website, www.cotton.org, under the News and Events section, but will require a password. Passwords will be provided upon completion of the short form located at http://www.cotton.org/register/request-password.cfm.

Questions or requests for assistance should be directed to memberservice@cotton.org, area membership representatives or Marjory Walker in the Memphis office at 901-274-9030.



Sales Strong, Shipments Steady

Net export sales for the week ending Dec. 3 were 297,800 bales (480-lb). This brings total ’09-10 sales to about 5.4 million bales. Total sales at the same point in the ’08-09 marketing year were about 7.7 million bales. Total new crop (’10-11) sales are 160,100 bales.

Shipments for the week were 126,100 bales, bringing total exports to date to 3.0 million bales, compared with the 4.4 million bales at the comparable point in the ’08-09 marketing year.



Prices Effective December 11-17, '09

Adjusted World Price, SLM 11/16

58.70 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

 0.00 cents


Import Quotas Open

13


Special Import Quota (480-lb bales)

818,258


ELS Payment Rate

  10.57 cents


*No Adjustment Made Under Step I

 

Five-Day Average



Current 5 Lowest 3135 CFR Far East

75.07 cents


Forward 5 Lowest 3135 CFR Far East

NA


Coarse Count CFR Far East

77.37 cents


Current US CFR Far East

80.90 cents


Forward US CFR Far East

NA


 

'09-10 Weighted Marketing-Year Average Farm Price  
 

Year-to-date (Aug.-Oct.)

55.46 cents

**

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

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