Agriculture Secretary Vilsack announced that during October, USDA will distribute approximately $1.6 billion in annual Conservation Reserve Program (CRP) rental payments and $3.8 billion in final ’10 direct payments. Producers holding 744,000 CRP contracts on 416,000 farms will receive an average of $52.56 per acre in CRP rental payments. Producers earn an average of $3,955 per farm enrolled in CRP.
Beginning on Oct. 12, final direct payments for the DCP and ACRE programs will be made to more than 1.1 million producers on 1.7 million farms enrolled in these programs. Participants in DCP or ACRE had the option of either receiving a 22% advance direct payment when the farm was enrolled or delaying the direct payment until the fiscal year’s end. ACRE revenue payments are scheduled to be made at a later time.
Because the effective price for wheat, barley, oats, corn, soybeans, grain sorghum, dry peas and lentils exceeds the target price, the Commodity Credit Corp. will not issue any ’09 counter-cyclical payments for these crops. The Secretary said that a final peanut counter-cyclical payment will be made in October which, when summed with the advance payment, totals $25 per ton. Pending an official announcement by USDA, the ’09 upland cotton crop also will receive a counter-cyclical payment of 1.68 cents (see next story on MYA Price).
USDA Issues Final MYA Price
USDA’s National Agricultural Statistics Service says the final US marketing year average (MYA) price for ’09 upland cotton is 62.9 cents per pound, up 15.1 cents from ’08. The higher price is in response to a decline in US stocks as the ’09 cotton crop fell short of demand.
The final MYA price is used in the determination of the ’09 counter-cyclical payment (CCP). Pending an official announcement by USDA, the price of 62.9 cents puts the estimated total CCP for the ’09 crop at 1.68 cents. Producers who took the advance CCP of 1.03 cents in March will receive an additional 0.65 cents.
US Crop Estimated at 18.87 Million Bales
In its October crop report, USDA sees a ’10-11 US cotton crop of 18.87 million bales, up 30,000 bales from the September report. Upland production was estimated at 18.38 million bales and extra long staple (ELS) production at 498,000 bales. Harvested area was estimated at 10.77 million acres, implying a non-harvested area of 265,000 acres. The resulting abandonment rate is roughly 2.40%. The national average yield per harvested acre was put at about 841 pounds, 15 pounds more than the five-year average.
On a regional basis, the Southeast crop is estimated at 4.00 million bales based on harvested acres of 2.58 million and a regional average yield of 742 pounds, 50 pounds lower than the five-year average for the region. In the Mid-South, expected production is 3.88 million bales. Harvested area is estimated to be 1.91 million acres with an expected yield of 975 pounds per harvested acre, 60 pounds more than the region’s five-year average. The Southwest upland crop is estimated at 9.43 million bales. Expected harvested area is 5.71 million acres and the regional average yield is 792 pounds, 77 pounds above the five-year average of 715 pounds per harvested acre. Upland production in the West is an estimated 1.08 million bales on harvested area of 359,000 acres and a regional average yield of 1,437 pounds, 87 pounds more than the region’s five-year average.
The ELS crop is an estimated 498,000 bales. Harvested area is pegged at 207,000 acres with an average yield of 1,154 pounds per harvested acre.
State-by-state results are presented in the accompanying table.
US Cotton Crop, ’10-11
PLANTED
ACRES
Thou. 1/
HARV.
ACRES
Thou.
YIELD PER
HARV.
ACRE
Lb.
5-YEAR
AVG.
YIELD
Lb.
480-
POUND
BALES
Thou.
UPLAND
SOUTHEAST
2,602
2,584
742
792
3,995
Alabama
345
343
616
653
440
Florida
92
89
647
771
120
Georgia
1,330
1,325
761
840
2,100
North Carolina
550
545
766
814
870
South Carolina
202
200
840
721
350
Virginia
83
82
673
879
115
MID-SOUTH
1,930
1,910
975
915
3,880
Arkansas
545
540
1,067
1,011
1,200
Louisiana
255
250
845
872
440
Mississippi
425
420
949
859
830
Missouri
315
313
1,043
976
680
Tennessee
390
387
905
822
730
SOUTHWEST
5,931
5,713
792
715
9,425
Kansas
51
48
700
602
70
Oklahoma
280
265
824
731
455
Texas
5,600
5,400
791
716
8,900
WEST
366
359
1,437
1,350
1,075
Arizona
195
193
1,492
1,410
600
California
124
123
1,483
1,363
380
New Mexico
47
43
1,060
1,026
95
TOTAL UPLAND
10,829
10,566
835
816
18,375
TOTAL ELS
209
207
1,154
1,245
498
Arizona
3
3
960
891
5
California
185
184
1,174
1,310
450
New Mexico
3
3
928
825
6
Texas
18
18
1,015
821
37
ALL COTTON
11,038
10,773
841
826
18,873
Source: USDA-NASS October Crop Production Report. 1/ Updated from June Acreage Report.
’10-11 Mill Use, Exports Unchanged
In its October report, USDA left US mill use and exports unchanged from the previous month at 3.60 million bales and 15.50 million bales, respectively. This generates a total ’10-11 offtake of 19.10 million bales. Ending stocks for ’10-11 are projected at 2.70 million bales for an ending stocks-to-use ratio of 14.1%.
For the ’09-10 crop year, USDA gauged US cotton production at 12.19 million bales. Estimated mill use increased 10,000 bales from the September report to 3.46 million bales and exports were unchanged at 12.04 million bales. Total offtake for the ’09-10 crop year is estimated at 15.50 million bales. Ending stocks were lowered 50,000 bales to 2.95 million bales. The estimated stocks-to-use ratio for the ’09-10 marketing year is 19.0%.
The October report reduced the ’10-11 world production estimate by 270,000 bales from the September report to 116.68 million bales. World mill use was raised 240,000 bales to a projected 120.77 million bales. Consequently, world ending stocks for ’10-11 are projected to be 44.66 million bales for a stocks-to-use ratio of 37.0%.
For the ’09-10 marketing year, USDA estimated world production at 101.36 million bales, up 210,000 bales from the September report. Estimated world mill use was raised 540,000 bales to 117.74 million bales. Estimated world ending stocks on July 31, ’10 now are estimated at 46.69 million bales. This has a corresponding stocks-to-use ratio of 39.7%.
Progress Slow in Resolving Doha Differences
Chief US agriculture negotiator Isi Siddiqui said members of the World Trade Organization (WTO) are making slow progress in resolving differences in the Doha Round. He also accused China of trying to backtrack on its tariff commitments.
In a speech to European farm groups that were meeting in Brussels, Siddiqui said recent talks organized by WTO Agriculture Negotiating Chairman Walker produced few results. Siddiqui said the issue of the special safeguard mechanism for developing countries was proving especially difficult. Developing countries led by India and supported by China have pushed for a provision that would allow them to temporarily increase tariffs on imported agricultural products if there are import surges that threaten vulnerable domestic producers.
Siddiqui said other outstanding issues addressed by WTO members during the chairman's consultations included the “blue box” category of farm subsidies, support for cotton, special products designation for developing countries, designation of additional tariff lines as sensitive products and other matters.
The most recent draft Doha text on agriculture, which was drawn up in Dec. ’08, would require the United States to cap spending on overall trade-distorting domestic support (OTDS) at $14.46 billion, a 70% cut from the current cap of $48.2 billion. In its most recent notification on farm spending submitted to the WTO in Jan. ’09, the United States reported $11.34 billion in OTDS spending in ’06 and $8.52 billion in OTDS spending in ’07. The ’08 draft text also would require the United States to apply a tiered formula for tariff cuts reducing the highest tariffs by 70% and the lowest tariffs by 50%, with a minimum average cut of 54%.
Malaysia Joins Trans-Pacific Partnership
The Office of the US Trade Representative officially notified Congress that Malaysia will join the negotiations to establish a Trans-Pacific Partnership (TPP) agreement. Malaysia is the first new country to be included in TPP negotiations since the negotiations began and brings the number of countries participating in the multilateral talks to nine, with the original eight being the United States, Australia, New Zealand, Chile, Peru, Brunei, Singapore, and Vietnam. In addition, Japan is considering whether to join the talks and other countries also are expressing initial interest.
The Office of the US Trade Representative said on Oct. 7 that nine countries continued to meet in Brunei Darussalam for a third round of negotiations on the TPP. There are 24 negotiating groups discussing issues to be covered by a TPP agreement. Negotiating groups made progress on industrial goods, agriculture, textiles, sanitary and phytosanitary standards, services, investment, financial services, intellectual property, and the environment, according to a USTR written statement.
Canada also has expressed interest and is observing the TPP negotiations this week in Brunei. One primary reason why Canada has not joined is because the United States and New Zealand are concerned about Canada’s reluctance to open up its agricultural market, sources said.
Thailand and the Philippines also have informally indicated interest in joining the TPP talks, although these countries appear far from being in a position to actually do so, sources said. Another source said that Thailand is watching the TPP negotiations carefully, but wants to see how they develop before making any further decisions on whether it would like to join the talks.
Treasury Working on Estate Tax Guidance
A Treasury Dept. spokesman has indicated it is working on estate tax guidance as Congress continues to decide what to do about a one-year repeal set to expire at the end of ’10.
The estate tax has been the subject of intense congressional debate in recent weeks.
Finance Committee Chairman Baucus (D-MT) has promised to pursue an extension of the estate tax with provisions similar to the ’09 levels of a 45% tax rate and a $3.5 million exemption level as part of the broader extension of the so-called Bush tax cuts of ’01 and ’03.
In the absence of Congressional action, rates will snap back to 55% with an exemption of $1.0 million.
Partners Chosen For Climate Change Research
Agriculture Secretary Vilsack announced that USDA has selected 10 researchers from seven developing countries to work side-by-side with US scientists on climate change mitigation research. These fellows were selected under the Global Research Alliance Norman E. Borlaug International Agricultural Science and Technology Fellowship (Borlaug Fellows) Program.
The 10 researchers -- two each from Chile, India, and Malaysia and one each from Ghana, Mexico, the Philippines, and Vietnam -- have chosen the following research areas: developing tools for greenhouse gas and carbon sequestration assessments; mitigating greenhouse gas emissions in crop, grazing, or confined animal production systems; and developing databases and strategies for synthesis, integration, and decision support to manage greenhouse gas emissions and carbon sequestration in agricultural systems. Each researcher will work closely with a US scientist located at one of 10 US universities or USDA Agricultural Research Service facilities for up to three months in their targeted area of research. One fellowship begins this fall and the rest will begin in spring ’11.
Alliance member countries are Argentina, Australia, Canada, Chile, Colombia, Denmark, Finland, France, Germany, Ghana, India, Indonesia, Ireland, Japan, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Peru, Philippines, Russia, Spain, Sweden, Switzerland, United Kingdom, United States, Uruguay and Vietnam.
EPA has issued its FY11-15 strategic plan, which provides a blueprint for advancing EPA’s mission and Administrator Lisa Jackson’s priorities.
The five-year plan includes new benchmarks that track progress against Administrator Jackson’s seven priorities such as taking action to reduce emissions of greenhouse gases and adapt to climate change; protecting America’s waters; increasing the use of smart growth and sustainable development strategies in communities; building and maintaining strong state and tribal partnerships; working for environmental justice; and ensuring that chemical health and safety information is available to the public. The five strategic goals for advancing the agency’s environmental and human-health mission are:
Taking action on climate change and improving air quality
Protecting America’s waters
Cleaning up communities and advancing sustainable development
Ensuring the safety of chemicals and preventing pollution
Net export sales for the week ending Sept. 30 were 584,000 bales (480-lb). This brings total ’10-11 sales to approximately 9.8 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 3.8 million bales. Total new crop (’11-12) sales are 691,300 bales.
Shipments for the week were 183,600 bales, bringing total exports to date to 1.7 million bales, compared with the 1.7 million bales at the comparable point in the ’09-10 marketing year.
