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August 27, 2010
 

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PAST ISSUES/ARCHIVES
 
Cotton's Week: April 19, 2024
Cotton's Week: April 12,2024
Cotton's Week: April 5, 2024
 
 


 
NCC Board Updated on Key Issues

NCC officers and directors along with other industry leaders attending the NCC’s Mid-Year Board meeting in Memphis were updated on key issues affecting the industry and the outlook, including economic opportunities and regulatory challenges.

NCC Chairman Eddie Smith’s report provided some details of his trips to Washington this year, which had a primary focus on key environmental issues, the WTO Brazil dispute and the ’12 farm bill debate. Smith said the gravity of these challenges underscored the need for the support and active leadership of the entire cotton industry. Increased financial support for the NCC and more involvement by industry members are top priorities for leaders in Texas and other areas of the Cotton Belt. Recent efforts in Texas, which included three regional producer-ginner conferences, have resulted in 14 new gin members with a total estimated annual average volume of more than 450,000 bales.

In highlighting Cotton Council International’s (CCI) many export promotion activities, Smith also noted that CCI had partnered with the NCC and Cotton Foundation again this year for another leadership exchange trip to China in early September. NCC Vice Chairman Charles Parker will be the delegation’s leader and his leadership team will include Richard Kelley, Shawn Holladay, David Dunlow, Kirk Gilkey andMike Quinn. NCC Vice President Harrison Ashley will accompany the group.

Regarding China, NCC Vice President Gary Adams, in his economic outlook, told attendees that the world's top consumer of cotton may import a large amount of the fiber in a campaign to replenish state reserves driven down by a series of official cotton auctions. He reported that USDA’s current projection for China’s imports of 12.5 million bales in '10/11 may prove to be conservative. He said total Chinese cotton state stocks were depleted as state cotton auctions sold almost 15 million bales in 16 months to curb rising domestic prices.

"At some point, they will want to go back and rebuild those reserves," Adams said. "It all points to more imports by China through 2010."

Adams said Pakistan, where the cotton crop was hit hard by sweeping floods, also may need to import more cotton. The USDA already has reduced its estimate of cotton production in Pakistan to 9.5 million bales from 10.2 million, but kept the forecast for imports steady at 2.3 million bales. He said the situations in China and Pakistan and continuing restrictions on India’s cotton exports could push US cotton exports above 15 million bales.

Regarding this season’s US crop, Adams was optimistic as USDA’s latest numbers show that 62% of that crop was rated good to excellent. He said that although the percentage of poor to very poor has been increasing in the Southeast in the last few weeks, overall “this is shaping up to be a very good crop.”

As a result of relatively good growing conditions, Adams said US production could reach 18.5 million bales in ’10 -- nearly 6 million bales higher than ’09’s crop.

 
EPA Seeks More Water Law Authority

In a recent draft report, Strategy for Achieving Clean Water, EPA is proposing a number of steps to increase its existing Clean Water Act (CWA) authority through new regulatory, permitting and enforcement efforts. The agency also said that Congress needs to pass legislation to clarify the scope of the CWA to ensure that EPA can implement some of the steps.

The draft strategy is intended to further EPA Administrator Lisa Jackson's "key priority of protecting America's waters" and incorporates ideas from a stakeholder meeting that the agency held earlier this year.

The strategy largely relies on existing CWA authority and suggests that the agency use this authority to launch new regulatory efforts. The strategy also emphasizes a holistic approach to protect watersheds by taking "administrative action" to expand the Act's jurisdiction and stepping up monitoring requirements in permits.

The strategy covers many of EPA's most prominent ongoing water projects, including its Chesapeake Bay cleanup program, stricter regulation of mining activities and efforts to limit nutrient pollution from agriculture. EPA identifies several areas where it can achieve the goals with existing authorities and those where new legislation would be needed.

Some priorities, such as ensuring CWA jurisdiction over wetlands and headwater streams, may require Congress to pass new legislation to clarify the scope of the water law, which EPA says it would support. Legislation has been introduced in both the House and the Senate that would replace the term “navigable waters” to “waters of the U.S.” which would accomplish EPA’s desire to expand its CWA jurisdiction.

Regardless of whether Congress passes legislation to clarify the CWA scope, the draft strategy also says EPA will "consider the use of administrative action" for the same purpose. Among the actions affecting agriculture that EPA says it will take:

  • Development and implementation of reasonable guidelines regarding non-point source reductions identified in total maximum daily load pollution prevention plans and work with USDA to reduce nutrient and sediment pollution from farms;
  • Use of market-based approaches, such as trading offsets, for watershed cleanup plans;
  • A national rule to ease designation of an animal feeding operation as a concentrated animal feeding operation, which would require a NPDES permit; and
  • Development of NPDES requirements to reduce pesticide discharges to water bodies.

EPA will take public comment on the draft strategy until Sept. 17.

 
Pesticide Permits May Cause Legal Woes

Pesticide users and stakeholders are warning of possible legal issues as EPA moves forward with its draft general permit for pesticide applications over, to, or near US waters, stating that the agency's proposal leaves pesticide users excessively vulnerable to citizen suits and overzealous enforcement actions by state and federal environmental officials.

EPA released its draft pesticide general permit in June in response to a ’09 ruling by the 6th Circuit Court of Appeals, which struck down EPA's ’06 rule that had eliminated the majority of aquatic pesticide applications from Clean Water Act (CWA) permitting requirements. EPA and the 44 authorized states have until April 9, ’11 to develop a permitting system for these particular pesticide uses. Industry groups repeatedly have called on EPA to ask for an extension of the effective date, complaining that the new permitting system unlikely is to be fully implemented before next April and warning that applicators will face legal jeopardy when they lose the protections of the ’06 rule.

If either EPA or any of the 44 authorized states are unable to meet the deadline, aquatic pesticide users will face the decision of either suffering economically and ignoring public health or continuing operations as they have previously with vulnerability to citizen suits and EPA enforcement actions.

Applicators also could face multiple CWA enforcement measures and/or third-party legal action for what may be simple paperwork errors resulting from unfamiliarity or confusion with the new deadlines and compliance requirements.

Even if all permits are in place by the effective date, the potential remains for significant citizen suits by environmental groups and others. Questions remain about liability and the complexity of requirements that could be subject to litigation and enforcement actions as well as the scope of water bodies subject to the new permit.

For example, EPA's proposal calls on operators to submit a Notice of Intent (NOI) in order to obtain a permit and to identify duties for compliance. But, the agency also says that any and all operators covered under a permit are jointly and severally liable for any violation that may occur. The use of joint and several liability means an operator can be held liable for someone else's noncompliance; whether it be violations related to reporting, recordkeeping, monitoring, or implementation of the permit's technology and integrated pest management requirements.

Industry groups also are contending that EPA's plan would unlawfully expand the scope of waters subject to the permitting program by regulating discharges to conveyances such as man-made irrigation ditches that connect to US waters.

 
EPA Visit Focuses on Tarnished Plant Bug

Nine EPA officials visited with Mid-South Extension/research entomologists, producers, consultants and state agriculture department representatives to gain a better understanding of the severity of Tarnished Plant Bug (TPB) damage to cotton and difficulties in controlling these insect pests.

During a meeting at the Delta Research and Extension Center in Stoneville, MS, entomologists from the U. of Arkansas, Mississippi State U., Louisiana State U. and the U. of Tennessee presented regional data showing the increase in TPB pressure throughout the cotton growing season. The data also showed the increased number of required chemical control applications and control difficulties associated with adjacent crops as well as TPB resistance to some insecticides. Producers and consultants explained how TPB has increased the risk associated with cotton production in the region and stated that TPB has influenced producer cropping decisions to reduce their risks.

The EPA group also toured cotton research plots where they were provided with information regarding cotton fruiting behavior and damage caused by TPB. The research plots demonstrated the yield loss associated with various numbers of chemical control applications.

The EPA participants expressed their appreciation for the educational opportunity. Steve Knizner, associate director of EPA’s Health Effects Division, stated, “If a picture is worth a thousand words, seeing things first hand is worth a million words. This visit greatly enhanced our understanding of the challenges facing Delta (Mid-South) cotton growers.”

 
Schoenholz Named to Cotton Pest Programs Position

Jim Schoenholz has been named director of Cotton Pest Programs in USDA’s Animal & Plant Health Inspection Service’s (APHIS) Plant Protection and Quarantine’s (PPQ) Emergency and Domestic Programs (EDP). When he assumes the position on Sept. 12, he will be responsible for programs associated with cotton pests such as boll weevil and pink bollworm.

Schoenholz began his career with APHIS as a plant quarantine inspector in California and Pennsylvania. He served as the officer in charge for the Boll Weevil Eradication Program in southern Virginia, all of North Carolina and the northern part of South Carolina. After serving as the deputy director for rearing and sterile release during the ’87 Florida Medfly Eradication Program, he was tasked with organizing the Boll Weevil Eradication Program in all affected states, with the exception of northeast Georgia. In the early ’90s, he organized the Boll Weevil Eradication Program when it expanded to include parts of Alabama, Georgia and Tennessee.

In ’94, Schoenholz became the Arizona state plant health director with responsibilities of maintaining the boll weevil eradicated areas in Arizona, southern California and northern Mexico; overseeing the pink bollworm rearing facility in Phoenix; and managing the Karnal Bunt Program. In the late ’90s, he assisted in establishing the Boll Weevil Eradication Program in New Mexico, serving on the Boll Weevil Advisory Council. In ’00, he transferred to PPQ’s eastern regional office as the senior program manager over the agriculture quarantine inspection and domestic program operations. In ’03, after the creation of the Dept. of Homeland Security, Schoenholz transferred to Customs and Border Protection (CBP). In ’05, he returned to APHIS as the quality assurance coordinator, working with PPQ and CBP.

 
America’s Heartland Adds New Features

America’s Heartland, the only nationally-distributed program on agriculture in America, kicks off season six with new stories and features demonstrating the importance of American agriculture to the nation and the world. The new season premieres nationally on public television and RFD-TV starting on Sept. 6.

New features include "Farm to Fork," where celebrity chef Dave Lieberman travels the heartland seeking out fresh farm products, and creates tasty dishes viewers can try at home. Fast Facts about Food delivers surprising and informative nutritional information, helping consumers learn more about antioxidants, fiber and vitamins.

Launched in ’05, the Emmy-award winning America’s Heartland travels throughout the nation, introducing non-farm viewers to the men and women who provide the food, fuel and fiber consumed daily. Frequently-appearing segments are targeted specifically to consumers. For example, "Off the Shelf" looks at food choices made at the supermarket; "Working the Land" introduces viewers to diverse careers in agriculture; and "Harvesting Knowledge" explores the rich history of foods enjoyed every day.

America’s Heartland also examines how technology is changing production, and how sustainability and environmental issues are becoming increasingly important to producers and consumers.

Currently, the series is seen on more than 230 PBS stations covering 66% of the United States. The program also reaches viewers in rural communities with primetime broadcasts on RFD-TV. The program has a new and expanded website at www.americasheartland.org, and viewers connect with the show on Facebook, Twitter and YouTube.

America’s Heartland is produced by KVIE Public Television in Sacramento, with support from the Monsanto Company and the American Farm Bureau Federation. For more information, contact Mindy Yuen at (916) 641-3546 ormyuen@kvie.org.

 
Mill Cotton Use Steady

According to the Commerce Dept., July (four-week month) total cotton consumption in domestic mills was 134.1 million pounds for a seasonally adjusted annualized rate of 3.61 million bales (480-lbs). Last year’s July annualized rate was 3.65 million bales.

The June (five-week month) estimate of domestic mill use of cotton was raised by 3.2 million pounds to 168.1 million pounds. The revised seasonally adjusted annualized rate of consumption for June is 3.55 million bales, higher than last year’s June annualized rate of 3.16 million bales.

Commerce’s estimate of both upland and ELS consumption of cotton by US mills, when adjusted to represent the complete ’09-10 crop year, is approximately 3.46 million bales. USDA’s August estimate of ’09-10 crop year mill use was 3.40 million bales.

Commerce’s estimate of exports for the ’09-10 crop year is approximately 12.04 million bales, compared to USDA’s latest export estimate of 12.00 million bales.

Commerce’s survey based estimate of stocks on hand as of July 31, ’10 was 2.94 million bales. USDA’s August estimate of ending stocks for the ’09-10 crop year was 3.10 million bales.

Preliminary August domestic mill use of cotton and revised July figures, as well as revised supply and distribution data for the ’09-10 crop year, will be released by Commerce on Sept. 23. USDA’s next supply and demand estimates are scheduled to be released on Sept. 10.

 
Sales Surge, Shipments Strong

Net export sales for the week ending Aug. 19 were 500,800 bales (480-lb). This brings total ’10-11 sales to approximately 6.9 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 2.9 million bales. Total new crop (’11-12) sales are 172,600 bales.

Shipments for the week were 249,700 bales, bringing total exports to date to 681,900 bales, compared with the 512,300 bales at the comparable point in the ’09-10 marketing year.

 

 
Effective Aug. 27-Sept. 2, ’10

Adjusted World Price, SLM 11/16

74.74 cents

*

Fine Count Adjustment ('09 Crop)

 0.26 cents


Fine Count Adjustment ('10 Crop)

  0.36 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 0.00 cents


Import Quotas Open

5


Special Import Quota (480-lb bales)

337,992


ELS Payment Rate

0.00 cents


*No Adjustment Made Under Step I

 

Five-Day Average



Current 5 Lowest 3135 CFR Far East

91.58 cents


Forward 5 Lowest 3135 CFR Far East

NA


Coarse Count CFR Far East

NA


Current US CFR Far East

92.95 cents


Forward US CFR Far East

NA


 

'09-10 Weighted Marketing-Year Average Farm Price  
 

Year-to-Date (August-June)

62.10 cents

**


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