Cotton Producers Testify at Senate Committee Hearing
Johnny Cochran, a fourth generation cotton and peanut producer from Worth County, GA, and Dow Brantley, a rice, cotton, corn and soybean producer from England, AR, told the Senate Agriculture, Nutrition & Forestry Committee during its hearing on implementation of the ’08 farm law that the legislation provides a sound and stable farm policy foundation that is essential for farming operations.
Brantley appeared at the invitation of Committee Chairman Lincoln (D-AR) at this first in a series of hearings she had announced for reviewing the implementation of the ’08 farm law and beginning discussions on future farm policy. Cochran appeared at the invitation of Committee Ranking Member Chambliss (R-GA).
The producers expressed support for the traditional combination of safety net features consisting of the non-recourse marketing loan program and the direct and counter-cyclical payment programs. In response to a question, both cited the marketing loan as a key component of farm policy and both supported continuation of direct payments.
While both complimented the Committee for developing an effective farm bill while balancing diverse interests, they expressed concern about the overzealous implementation of new payment limitation and program eligibility provisions that made far-reaching reforms to provisions in effect since ’89.
Both testified that the ACRE and SURE programs have not been attractive for Sunbelt growers. They also acknowledged the budget challenges associated with writing future farm law and that as a result of the Brazil WTO case, cotton's programs will be under particular scrutiny.
Agriculture Secretary Vilsack led off the hearing and discussed the challenges associated with implementing the ’08 farm law. He called for an effort to recruit 100,000 new farmers to re-populate rural America and likened the project to efforts to recruit teachers and policemen -- explaining that repopulation is essential to revitalizing the rural economy.
In her opening statement, Chairman Lincoln pledged that the Committee would be a strong advocate for production agriculture and would listen carefully to farmers before recommending changes in farm policy. Ranking Member Chambliss (R-GA) echoed these sentiments in his statement. He also complimented Secretary Vilsack for the efforts by USDA and US Trade Representative negotiators in developing a framework agreement with Brazil. More information on Sens. Lincoln’s and Chambliss’ statements is available in the Senate Agriculture Committee website’s newsroom area, http://ag.senate.gov/site/news.html.
During the question and answer period with Secretary Vilsack, Sen. Lugar (R-IN) took strong exception to the use of Commodity Credit Corp. (CCC) funds as part of the short-term settlement with Brazil. He asked the Secretary to provide written documentation of his authority to use CCC funds and suggested that the US cotton industry should be required to repay the CCC.
Allen McLaurin, a Laurinburg, NC, producer and president of Southern Cotton Growers, presented testimony at a House Agriculture Committee field hearing in Fayetteville, NC. The hearing was chaired by Rep. McIntyre (D-NC) and attended by Reps. Kissell (D-NC), Ethridge (D-NC) and Thompson (R-PA).
McLaurin echoed the general consensus of the cotton industry in support of the ’08 farm law’s cotton provisions. He stated that the support given to bio-fuel crops must be taken into consideration when comparing relative levels of support across commodities, when evaluating payment limitations and before trying to mandate a one-size-fits-all farm program.
Vilsack Urges Nutrition Program Funding Increase
Appearing before the House Education and Labor Committee, Agriculture Secretary Vilsack supported prompt reauthorization of child nutrition programs with a significant increase in funding. He said he would recommend cuts in other USDA programs to pay for the increase if necessary.
The Committee is considering a bill, introduced by Chairman Miller (D-CA), to make it easier for low income children to qualify for free meals and improve the quality of those meals. The bill provides an additional $8 billion for school meal programs over 10 years. But Rep. Miller has not identified offsets to pay for the increased cost.
The Senate Agriculture Committee approved a similar bill and authorized additional funding in the amount of $4.5 billion over 10 years. The Senate bill offset the increased cost by reducing a food stamp education program and cutting EQIP by $2.8 billion over 10 years.
Asked whether he supports the offsets in the Senate bill, Vilsack said that cutting any USDA program is like asking him which of his children he likes more. But he cited an audit of USDA's Natural Resources Conservation Service (NRCS) showing that spending has "outpaced the personnel at NRCS," which may indicate that a cut in conservation might be appropriate.
NCC Conveys Request on SRA Savings
In a letter to William Murphy, Administrator of USDA’s Risk Management Agency, the NCC requested that a portion of budget savings incurred in the renegotiated Standard Reinsurance Agreement (SRA) be used to implement specific adjustments to cotton crop insurance provisions.
The NCC letter specifically asked that a portion of the $2 billion saved in the SRA renegotiation be used to fully implement changes previously recommended by the NCC to improve cotton quality loss adjustments and, if necessary, funds should be used for the implementation of the Cottonseed Pilot Endorsement no later than with the ’11 crop.
The letter noted that the ’12 farm bill will be developed amidst an even tighter budget situation than the current farm law and that retaining as much of the baseline as possible is vitally important. USDA has committed to reinvesting $2 billion of the savings from the SRA into other insurance and conservation programs.
USDA Report Boosts ’10 Cotton Acreage
In its June acreage report, USDA estimated ’10-11 US cotton plantings at 10.91 million acres, up 19.2% from ’09. Upland planted area is estimated to have increased 18.8% to 10.70 million acres. ELS cotton producers planted 209,000 acres, up 47.8% from ’09.
On a regional basis, upland area in the Southeast is up 33.5% to 2.53 million acres. Planted acres are expected to climb to 1.88 million acres in the Mid-South in ’10, up 15.6% from the previous year. In the Southwest, estimated upland area is up 13.5% to 5.95 million acres. Estimated upland area in the West is up 39.6% to 345,000 acres.
USDA estimates ELS plantings of 209,000 acres, up 47.8% from ’09.
State level results are presented in the accompanying table.
’10 US COTTON PLANTINGS
’09 Actual
(Thou.) 1/
’10 Est.
(Thou.) 1/
Percent Change
SOUTHEAST
1,891
2,525
33.5%
Alabama
255
370
45.1%
Florida
82
90
9.8%
Georgia
1,000
1,250
25.0%
N. Carolina
375
570
52.0%
S. Carolina
115
175
52.2%
Virginia
64
70
9.4%
MID-SOUTH
1,627
1,880
15.6%
Arkansas
520
530
1.9%
Louisiana
230
230
0.0%
Mississippi
305
420
37.7%
Missouri
272
300
10.3%
Tennessee
300
400
33.3%
SOUTHWEST
5,243
5,950
13.5%
Kansas
38
40
5.3%
Oklahoma
205
210
2.4%
Texas
5,000
5,700
14.0%
WEST
247
345
39.6%
Arizona
145
185
27.6%
California
71
125
76.1%
New Mexico
31
35
12.5%
TOTAL UPLAND
9,008
10,700
18.8%
TOTAL ELS
141
209
47.8%
Arizona
2
3
87.5%
California
119
185
55.5%
New Mexico
3
3
7.1%
Texas
18
18
0.0%
ALL COTTON
9,150
10,909
19.2%
1/ USDA-NASS
House Approves Financial Services Regulation Overhaul
The House approved mostly along party lines, 237-192, the conference report for the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173), which was not subject to amendment.
The Senate is expected to take up the legislation during the week of July 12 following the Independence Day recess. Senate Majority Leader Reid (D-NV) said that there was not enough time to consider H.R. 4173 before the holiday recess in part because the Senate started the recess early due to the death of Sen. Byrd (D-WV). Also complicating matters are recent signs of dissent from Sens. Brown (R-MA) and Feingold (D-WI) who publicly criticized the final conference report. Sens. Snowe (R-ME), Collins (R-ME), Grassley (R-IA) and Cantwell (D-WA) also remain undecided.
In May, the Senate proceeded to consideration of an earlier version of the bill with just 60 votes, the minimum needed. In a bid to secure support for the conference report, Chairmen Dodd (D-CT) and Frank (D-MA) unexpectedly reconvened the conference committee to eliminate a “bank tax” that Sen. Brown opposed. To pay for the 10-year costs of H.R. 4173, the conferees had included new assessments on large financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets. They replaced that “pay for” plan with new provisions that would end the Troubled Assets Relief Program early and raise the level of reserves in the Deposit Insurance Fund.
NRCS Bird Habitat Initiative Launched
The Natural Resources Conservation Service (NRCS) recently announced a new Migratory Bird Habitat Initiative – where it will work with farmers and landowners to develop and enhance habitat for birds making their annual migration south towards the Gulf of Mexico.
The program, which seeks to improve habitat conditions and food sources for migratory birds likely to be affected by conditions in the Gulf of Mexico, will be delivered through two components: 1) on private agricultural lands using the Environmental Quality Incentives Program and the Wildlife Habitat Incentives Program, and 2) on Wetlands Reserve Program easement lands. Emphasis will be on creating or enhancing habitat for shorebirds and waterfowl, including shallow water, mudflat, and sand flat habitats. Of special interest are agricultural lands that contain wetlands farmed under natural conditions and prior converted croplands. Flooded crop fields are particularly well-suited for this initiative, as are catfish farms.
The initiative encompasses portions of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri and Texas. NRCS has identified priority areas that offer the greatest habitat potential for migrating bird populations and anticipates improving habitat on up to 100,000 to 150,000 acres throughout the eight states, based on expected producer participation.
The program signup will run until Aug. 1, ’10, and high priority projects can be immediately obligated. Program details and maps identifying the program’s priority counties are at http://www.nrcs.usda.gov/news/nrcs_migratory_birds.html.
USDA Approval Received For Bale Packaging Specifications
The bale packaging specifications for the ’10 crop year adopted by the NCC Joint Cotton Industry Bale Packaging Committee were approved by USDA for Commodity Credit Corp. loan program purposes.
New for ’10 is an ultraviolet (UV) ray inhibitor and associated weathering resistance requirements for PE film bags. There also were technical corrections to the ’09 specifications by replacing references to dated Federal Test Method Standards with references to active ASTM standards. Except for these changes, the revised specifications are identical to the ’09 specifications.
The use of only UV inhibitor stabilized PE film bags are required for ’10 and continued use of non-UV inhibitor stabilized PE film bags is disallowed once existing stocks are depleted. This was confirmed in the following policy: “bale packaging materials carried over from the previous year, which were eligible for packaging 2009 crop cotton, may be used to package the current crop of cotton.”
The ’09 specifications on the NCC’s website have been replaced with the ’10 specifications following notification by USDA that the revised bale packaging specifications have been approved. County Farm Service Agency offices, other federal agencies and anyone else needing bale packaging specifications for current or previous years may view and download them from the NCC’s website at http://www.cotton.org/tech/bale/specs/index.cfm.
NCGA Encouraging Gin Safety
The National Cotton Ginners Assoc. (NCGA) is reminding ginners to be diligent in adhering to all Occupational Safety and Health Administration (OSHA) and workplace safety standards. OSHA is placing increased emphasis on workplace safety and is hiring new inspectors to help with enforcing the various rules and regulations.
Ginners have done an outstanding job in improving workplace safety, but all industries are being scrutinized. Ginners are encouraged to seek the advice of their state and regional association safety specialists to ensure that they are following all rules and regulations. Safety training DVDs and printed materials can be ordered from the NCGA website, www.ncga.cotton.org.
In addition, the Dept. of Homeland Security issued new workplace guidelines in '09 for Immigration and Customs Enforcement which shifts the focus from the worker to the employer. Ginners should pay careful attention and follow all instructions when completing I-9 forms.
Two documents are available on the NCGA website that can answer many questions: 1) “Preparing for Immigration and Customs Enforcement Inspections” and 2) “A Ginner’s Practical Guide to Compliance with the FLSA and the MSPA.”
Sales Slump, Shipments Strong
Net export sales for the week ending June 24 were 122,800 bales (480-lb). This brings total ’09-10 sales to approximately 13.6 million bales. Total sales at the same point in the ’08-09 marketing year were approximately 14.1 million bales. Total new crop (’10-11) sales are 2.5 million bales.
Shipments for the week were 299,900 bales, bringing total exports to date to 10.5 million bales, compared with the 11.8 million bales at the comparable point in the ’08-09 marketing year.
With just over one month remaining in the marketing year, weekly shipments must average roughly 348,400 bales to reach the USDA projection of 12.3 million bales.
Effective July 2 - 8, ’10
Adjusted World Price, SLM 11/16
68.81 cents
*
Fine Count Adjustment ('09 Crop)
0.43 cents
Fine Count Adjustment ('10 Crop)
0.53 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
6
Special Import Quota (480-lb bales)
407,874
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
NA
Forward 5 Lowest 3135 CFR Far East
85.85 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
NA
Forward US CFR Far East
87.95 cents
'09-10 Weighted Marketing-Year Average Farm Price
Year-to-Date (August-May)
61.92 cents
**
**August-July average price used in determination of counter-cyclical payment
