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June 18, 2010
 

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US, Brazil Reach Agreement in WTO Dispute

United States and Brazilian officials announced that the two countries have concluded a Framework Agreement with respect to the WTO dispute involving the export credit guarantee programs and certain provisions of the upland cotton program.

The Framework Agreement delays trade retaliation by Brazil through the development of the ’12 farm bill and further indicates that a mutually agreed outcome in the next farm bill would provide a long-term settlement of the dispute. The two countries had until June 21 to conclude an agreement or Brazil would have imposed trade sanctions on up to $800 million worth of US goods.

The NCC expressed appreciation for the Administration’s efforts to conclude a framework agreement with Brazil in the dispute.

"The framework agreement between the U.S. and Brazil reflects a significant effort by the Administration to forestall the imposition of damaging retaliatory trade action by Brazil while preserving the normal policy process in the United States,” NCC Chairman Eddie Smith stated. “It was a difficult agreement to negotiate, and we commend the Administration for its determination to find common ground with Brazil."

A Brazilian government press release indicated that the basis for the discussion on US cotton policy would be an annual limit on trade-distorting cotton subsidies that would be "significantly lower" than the average for the years ’99-05 (the years covered by the WTO dispute). The Framework also provides benchmarks for changes to the US export credit guarantee program that would affect all participating US commodities. According to Brazil, the export credit guarantee changes would focus on a reduction in the length of the guarantees (maximum length of 16 months) along with potential increases in risk-based premiums to be charged. The increase in premiums would be tied to the overall level of use of the export credit guarantee program.

The Framework also calls for quarterly meetings between the United States and Brazil to discuss progress in the ’12 farm bill debate. Both countries stated that the Framework was not a "permanent" solution to the dispute, but provided a process and actions that were to occur during a "transition" period that would end with enactment of the ’12 farm bill. As long as the Framework is in place, Brazil agreed not to impose trade sanctions. However, Brazil reserved its rights to terminate the Framework Agreement at any time.

"We will work with Congress and the Administration on the 2012 farm bill,” Smith stated, “in order to develop cotton policy that will continue to provide the safety net needed by U.S. farmers while helping assure our trading partners that U.S. cotton programs do not cause unfair trade distortions in the world cotton market."

 
House Panel Conducts ’12 Farm Bill Hearing

The House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management held a hearing to review farm programs ahead of the ’12 farm bill.

Testifying at the hearing was Undersecretary for Farm and Foreign Agriculture Services Jim Miller.He noted that USDA has published 14 of the 20 regulations associated with farm and disaster-related programs stemming from changes in the ’08 farm bill and has updated Congressional Members on various farm programs.

Much of the hearing centered on USDA’s recent announcement of a third and final draft of the Standard Reinsurance Agreement (SRA). The SRA is the contractual agreement between the federal government and crop insurance companies that regulates how the program operates. Many Members were concerned about cuts in the program and whether producers will continue to receive adequate services.

 
NCC Launches Conservation Information Portal

The NCC created “Conservation in Cotton Production,” a portal on its website to help its producer members determine which federal conservation programs would be beneficial to their operations and to better understand the programs’ requirements and enrollment process.

“With conservation programs expected to account for almost 30% of total spending on agricultural programs, the National Cotton Council is encouraging producers to learn more about the various programs available,” said NCC Chairman Eddie Smith. “The Council believes that quality conservation efforts not only improve the environment but can improve a producer’s bottom line.”

At www.cotton.org/econ/govprograms/conservation-programs.cfm, is the portal which offers a central information venue with program fact sheets and short educational videos outlining various conservation programs. The videos contain commentary from Bruce Knight, former chief of USDA’s Natural Resources Conservation Service, along with cotton producers who have utilized the programs.

The portal also will be continually updated with information ranging from additional educational videos to the latest conservation news regarding sign-up deadlines and new programs offered through USDA. The NCC also is exploring adding a “Fieldprint Calculator” tool that allows growers to see how their efficiency performance compares to national and state averages.

 
ASABE Endorses Natural Fiber in Remediating Oil Spill

The The Society of Agricultural and Biological Engineers (ASABE) recently announced its endorsement of the use of natural-fiber products such as cotton in remediating the oil spill in the Gulf of Mexico.

At www.asabe.org/PA/ASABE_ps_OilRemediation.pdf is a formal statement by the Society which provides supporting data for its endorsement. Several ASABE members from the cotton research and ginning communities assisted in developing the statement and providing the supporting data.

According to an ASABE news release, cotton and many cotton byproducts provide crucial benefits over synthetic materials, like polypropylene, in recovering oil from the ocean. Cotton fiber can absorb about 40 times its weight in oil (with proper dispersal, a 500-pound bale of cotton fiber could absorb 25,000 pounds of oil, or 76 barrels), whereas currently-used synthetics have a capacity of 10 to 20 times their weight. In addition, the oil absorbed by cotton, along with the cotton itself, will degrade naturally in the environment, which is not the case for synthetics. Also, cotton fiber and its fibrous byproducts can be reused to absorb additional oil.

“Agricultural and biological engineers have been aware of the superiority of natural fibers for oil clean-up applications for quite some time,” ASABE President Ron Yoder said. “In 1994, the effectiveness of cotton for absorbing oil was documented by a USDA research agricultural engineer. Other natural fibers, like kenaf and wood products, also have been demonstrated to be sound solutions to this problem. Moreover, because natural fibers can be microbially digested and are renewable they offer an environmentally sound solution for dealing with massive spills that synthetic alternatives are incapable of providing.”

ASABE is a scientific and educational organization dedicated to the advancement of engineering applicable to agricultural, food and biological systems.

 
FSA Customer Service Improvement Process Begins

Agriculture Secretary Vilsack announced that the Farm Service Agency (FSA) will hold a public meeting in

Washington later this month to kick off its effort to improve customer service through the use of updated technology.

The project, known as "Modernize and Innovate the Delivery of Agricultural Systems" (MIDAS), was discussed at a recent cotton warehouse meeting where MIDAS was described as an effort to update the farm program delivery system and provide better service to farmers and ranchers. Expectations are that MIDAS will provide business process information on five farm programs that represent 95% of the transactions and budget of FSA.

Modernizing USDA's business and information technology is part of the Secretary's goal to transform USDA into a premier organization of highly motivated, collaborative and mutually-supportive employees who are committed to creating an inclusive, diverse workplace environment that achieves high standards of performance and exceptional customer service.

A news release and more information on MIDAS can be found at  www.fsa.usda.gov/FSA/webapp?area=newsroom&subject=landing&topic=landing, FSA’s newsroom site. Click on news releases and then on the release, "USDA Plans to Modernize and Innovate the Delivery of Agricultural Systems."

 
COTTON USA Buyers Tour Successful

A record number of participating buyers and suppliers attended Cotton Council International’s (CCI) COTTON USA Buyers Tour to China, showing continued high levels of interest in CCI’s Supply Chain Marketing events.

More than 40 participants from 25 global buyers and retailers in the United States, Europe and Asia, joined CCI’s COTTON USA Supply Chain Marketing Buyers Tour to China. This was the largest tour of its kind that CCI has organized.

To provide sourcing options for the brands and retailers, 33 COTTON USA licensed suppliers from China and North and Southeast Asia traveled to CCI’s private trade fair in Shanghai where they promoted their US cotton-rich fabrics and garments.

The Buyers Tour incorporated a two-day trade fair in Shanghai, as well as factory tours of fabric and garment manufacturing facilities in Hangzhou and Guangzhou. Cotton Incorporated also supported the event by recruiting participants and presenting their recent product developments. The event provided opportunities for overseas buyers to meet leading suppliers of denim and woven bottom weight fabrics and garments from across Asia.

Suppliers at the trade fair indicated that the COTTON USA Buyers Tour provided a platform for them to meet new buyers from overseas markets and helped to enhance their business relationships with existing customers. Most participants expressed confidence that the contacts made during the trip would lead to developing business ties and consequently increase sales of US cotton.

 
Sales, Shipments Strong

Net export sales for the week ending June 10 were 304,300 bales (480-lb). This brings total ’09-10 sales to approximately 13.4 million bales. Total sales at the same point in the ’08-09 marketing year were approximately 13.7 million bales. Total new crop (’10-11) sales are 2.0 million bales.

Shipments for the week were 273,400 bales, bringing total exports to date to 9.9 million bales, compared with the 11.1 million bales at the comparable point in the ‘08-09 marketing year. With a little less than two months remaining in the marketing year, weekly shipments must average roughly 338,000 bales to reach the USDA projection of 12.3 million bales.

 

 
Effective June 18-24, ’10

Adjusted World Price, SLM 11/16

77.68 cents

*

Fine Count Adjustment ('09 Crop)

 0.38 cents


Fine Count Adjustment ('10 Crop)

  0.48 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 0.00 cents


Import Quotas Open

8


Special Import Quota (480-lb bales)

546,993


ELS Payment Rate

0.00 cents


*No Adjustment Made Under Step I

 

Five-Day Average



Current 5 Lowest 3135 CFR Far East

94.72 cents


Forward 5 Lowest 3135 CFR Far East

87.00 cents


Coarse Count CFR Far East

NA


Current US CFR Far East

93.30 cents


Forward US CFR Far East

88.80 cents


 

'09-10 Weighted Marketing-Year Average Farm Price  
 

Year-to-Date (August-April)

61.75 cents

**


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