Producers Encouraged to Respond to Planting Survey
All cotton producers are encouraged to respond to the NCC’s annual survey of ’11 planting intentions, which was recently distributed to upland and extra-long staple (ELS) cotton producers across the Cotton Belt. The current survey was distributed through a combination of regular mail and email with the intent of reaching all cotton farms across the Belt. Growers who did not receive a survey may contact the NCC via email ateconsurvey@cotton.orgfor survey instructions.
The survey, conducted each year to aid with industry planning and policy deliberations, provides the basis for the economic outlook presented to delegates during the NCC Annual Meeting in early February. Survey results will be presented during the Joint Meeting of Program Committees on Saturday morning, Feb. 5. To enhance the survey’s accuracy, producers are encouraged to respond by the Jan. 18 deadline.
Federal Funding CR Approved
A Continuing Resolution (CR) that will continue funding for most programs at current levels until March 4, ’11 was approved on Dec. 20 by the Senate (79-16) and on Dec. 21 by the House (193-165). The President promptly signed the bill (H.R. 3082) into law.
Although both the House and Senate appropriations committees wrote and marked up the 12 appropriations bills months ago, none were enacted into law as stand-alone measures. Passage of the CR does not mean that work on the FY11 bills ends.
House Appropriations Committee Republicans, who will be in the majority beginning on Jan. 5, want to reduce spending to FY08 levels -- a reduction of approximately $100 billion.
While funding for most programs continues at current rates, the CR does include more money for veterans and education programs.
The CR was considered a few days after appropriators' plans to push for consideration of a $1.1 trillion omnibus spending bill ran into heavy criticism. Although Senate Appropriations Committee Chairman Inouye (D-HI) and ranking member Cochran (R-MS) significantly reduced funding for the programs covered by the 12 bills, the bill came under attack for its overall size and for $8 billion in earmarks.
Sen. Cochran issued a statement saying this year's appropriations process was “extremely disappointing.” He said a CR will constrain the Pentagon and other agencies from carrying out their missions and deny Congress “the kind of thoughtful oversight and detailed guidance that regular appropriations bills provide. I hope that those who opposed how the omnibus bill was crafted and presented will work with me and Chairman Inouye in the next Congress to find a way to consider the appropriations bills individually and in a timely manner.”
The CR funds most of the government at FY10 levels through March 4, ’11. It would provide extra money for some programs and make a number of policy changes.
Federal Spending Proposals Unveiled
On Dec. 22, House Republicans unveiled numerous proposals to change House rules to emphasize controlling federal spending. The new rules, which are expected to be voted on Jan. 5 (the first working day of the new 112th Congress), also would require a roll call vote on the congressionally set debt ceiling.
Currently, the debt limit automatically is raised when a new budget resolution is approved. A higher debt ceiling is expected to be necessary in the first six months of ’11.
According to a summary of the rules, new mandatory spending would have to be offset by a cut of an equal or greater amount in another program and would prohibit tax increases from being used as offsets.
Republicans also are expected to propose rules that require any legislation introduced to include a citation of the constitutional authority for the legislation. The package also would make slight changes to the names of three House committees.
The House Republican conference is set to meet on Jan. 4, where modifications to the package could be proposed prior to its being considered by the House on Jan. 5. Democrats also can propose an alternative rules package on Jan. 5.
House Approves Modified Omnibus Trade Act
As one of the last actions prior to adjourning, the House approved a pared down version of the Omnibus Trade Act of 2010 (HR 6517), which had been modified by the Senate to include a six week extension of the Andean Trade Preferences Act and Trade Adjustment Assistance.
The House previously had passed a more comprehensive version of HR 6517 on Dec. 15, but the Senate approved its version of the legislation after stripping out a number of provisions in the legislation previously passed by the House. The narrower bill passed by the Senate does not extend the Generalized System of Preferences (GSP), which provides duty-free access to the US market for certain products from 132 developing countries.
The legislation, signed by President Obama, would extend tariff preference programs for Colombia and Ecuador under the Andean Trade Preferences Act (PL 102-82) through Feb. 12, ’11. Peru was not included because its free trade agreement with the United States is expected to be implemented very soon. If Congress had not acted, the trade preference programs for Ecuador and Colombia, which include significant trade in apparel containing US-manufactured cotton yarn and fabric, would have expired on Dec. 31.
The legislation also extends for six weeks the Trade Adjustment Assistance (TAA) program, which assists workers who are laid off or whose work hours and wages are reduced as a result of increased imports. There is speculation that some pro-trade members of Congress wanted to limit the TAA extension and use it to press President Obama to move forward on free trade agreements with South Korea, Colombia and Panama.
House Clears Landmark Food Safety Measure
The House cleared landmark food safety legislation on Dec. 21 after overcoming procedural and constitutional obstacles that had threatened to sink the bill in the session’s waning days. By 215-144, the House concurred in a Senate amendment to the bill (HR 2751), which would authorize the largest overhaul of food safety laws in more than seven decades. President Obama is expected to sign the bill. A summary of the law is in the Issues Members Only area of the NCC’s website,www.cotton.org.
The measure would strengthen the Food and Drug Administration’s (FDA) regulatory power and allow the agency to order mandatory recalls. It is backed by a coalition that includes food producers, grocery manufacturers and consumer organizations.
Support for an overhaul increased after several high-profile recalls in recent years of contaminated food products, including peanut butter, spinach, eggs and peppers. The Senate first passed a food safety bill (S 510), 73-25, on Nov. 30. Soon after, House leaders objected because they deemed new fees in the measure to be revenue-raising provisions, which, according to the Constitution, must originate in the House.
Senate Democrats then sought to add the food safety provisions to an omnibus spending package or a short-term continuing resolution, both of which carried House bill numbers. However, the omnibus collapsed and Sen. Coburn (R-OK) objected to adding the food safety language to a continuing resolution, leading many supporters of the bill to conclude that it was dead. In a surprising turn of events, though, the Senate passed the food safety legislation by voice vote on Dec. 19, using a House measure originally related to consumer recycling as a vehicle for the food safety language. The House had passed the companion bill in July ’09 by a vote of 283-142.
One major difference between the two versions is an exemption for small farms and processors from much of the new FDA regulation, which the Senate added at the behest of Sen. Tester (D-MT). That provision cost the support of United Fresh and struck some Republican lawmakers as a reason to vote against the legislation in its entirety, in favor of reintroducing the measure next year. Democrats argued, in turn, that while they wished such an exemption had not made it into the final version, passing the bill regardless was imperative.
Shorter Pesticide Review Schedule Weighed
EPA officials say the consequences of climate change, such as rising temperatures and shifting precipitation patterns, may require the agency to conduct periodic reviews of pesticides more frequently than the 15-year timeframes currently required under FIFRA.
The question of whether to modify its review schedule was one of several questions that EPA's Office of Pesticide Programs (OPP) put to its pesticides Science Advisory Panel (SAP), which met on Dec. 7 to consider the effects of climate change on an array of research and regulatory activities.
The panel also considered how climate change would affect the parameters that OPP uses to construct risk-assessment models, the extent to which a changing climate will shift regional crop patterns, the use of historical data in risk assessments and how far back EPA should go in compiling historical data sets to predict future weather patterns.
Joel Scheraga, a senior adviser for climate adaptation in EPA's policy office, told SAP that OPP's outreach was part of the agency's broader efforts to incorporate climate change adaptation in policymaking. He noted that EPA rulemaking up until now has relied largely on scientific models that assume stability in the climate, for example observing how pesticide and sediment runoff from fields proceeded historically to predict how runoff would function in the future.
Panel members offered mixed views on whether EPA should shorten the review time frame, noting in part the uncertainty in climate models.
Climate Change Debate Continues
After the mid-term elections, Democrats and Republicans can agree that cap-and-trade legislation for greenhouse gas emissions is dead for the foreseeable future. However, the climate change debate will continue in the next Congress, pushed by the Obama Administration’s plan to regulate carbon dioxide under the Clean Air Act (CAA) and the arrival of newly-elected conservative Republicans, who are skeptical of the science underlying proposals to address climate change.
EPA regulation of greenhouse gases will remain front and center as opponents mount a new effort to scuttle or delay rules for major emitters scheduled to take effect on Jan. 2 (see June 11, ’10, Cotton’s Week). Many opponents see those limits as part of a “backdoor cap-and-trade agenda,” as Sen. Inhofe (OK), the top Republican on the Environment and Public Works Committee, phrased it.
Environmentalists and state officials say the recently released EPA guidance on greenhouse gas permitting provides sufficient certainty for regulated entities. Industry and congressional critics say the guidelines are insufficient and too late and that EPA’s rule for stationary sources will be a moratorium on new construction in the power and manufacturing sectors.
EPA’s regulatory authority under the CAA could be a bargaining chip for winning GOP support of the piecemeal energy bills that President Obama has described as “chunks.” It is unlikely the Administration would trade its regulatory authority for anything less than mandatory emission cuts.
While opposition to cap-and-trade is officially included in the House GOP policy agenda, talks on at least a limited cap on power plant emissions likely are to continue in the Senate. Sen. Kerry (D-MA) claims there is an interest among a handful of Republican moderates in a utility cap. Sen. Carper (D-DE) suggested that pending EPA regulations for conventional air pollutants, which are opposed by industry, could provide an incentive for utilities to strike a deal on multi-pollutant legislation that also caps carbon dioxide emissions.
It is highly unlikely those talks will produce legislation capable of winning House Republicans’ support. Half of the incoming GOP House members have expressed doubts that man-made global warming exists. To the consternation of environmentalists, several Republican House members who are poised to chair committees in the next Congress have signaled their intent to investigate the science behind warming.
USDA Announces Cotton Board Appointments
Agriculture Secretary Tom Vilsack announced the appointment of 19 members and 19 alternates to the Cotton Board. All appointees will serve three-year terms beginning on Jan 1, ’11, and ending on Dec. 31, ’13.
The re-appointed producer members are: V. Larkin Martin, Courtland, AL; Edward E. Dement, Sikeston, MO; Dwight W. Menefee, Lake Arthur, NM; Arthur W. James Jr., Sumter, SC; Willie L. German, Jr., Somerville, TN; Madison Farmer, Lamesa, TX; and Craig D. Shook, Corpus Christi, TX.
The re-appointed brand/retailer members are:Gary E. Ross, Yardley, PA; Werner Bieri, Jefferson, GA; John D. Clark, Los Angeles, CA; Arlene M. Eastwood, Neptune, NJ; A. Mark Neuman, Champaign, IL; and Peter M. McGrath, Plano, TX.
The newly appointed producer members are:David J. DeFelix, Campellton, FL; James L. Webb, Leary, GA; Suzanne R. Drouhard, Harper, KS; Clint D. Abernathy, Altus, OK; and Lance V. Everett, Stony Creek, VA.
The newly appointed brand/retailer member is:Michael D. Wallace, Bentonville, AR.
The re-appointed producer alternate members are:Walter L. Corcoran, AL; Jack L. Joy, Artesia, NM; Robert D. Robbins, Altus, OK; Larry W. Rice, Covington, TN; Kenneth W. Dierschke, San Angelo, TX; and Debra R. Barrett, Edroy, TX.
The re-appointed brand/retailer alternate members are:Sarah F. Kay, Charlotte, NC; and Helga L. Ying, San Francisco, CA.
The newly appointed producer alternate members are: Alan J. Edwards, Jay, FL; Michael S. Moore, Elko, GA; Thomas L. Lahey, Moscow, KS; George L. Rone, Portageville, MO; Francis G. Darby Jr., Chester, SC; and Marvin L. Everett III, Capron, VA.
The newly appointed brand/retailer alternate members are:Rajiv Malik, Corte Madera, CA; Barbara A. Rozsas, Garnet Valley, PA; Patricia M. Reber, Plymouth, MM; Laura M. Anderson, New York, NY; and Marilyn C. Kloner, New York, NY.
Mill Cotton Use Steady
According to the Commerce Dept., November (four-week month) total cotton consumption in domestic mills was 136.4 million pounds for a seasonally adjusted annualized rate of 3.73 million bales (480-lb). Last year’s November annualized rate was estimated at 3.67 million bales.
The October (four-week month) estimate of domestic mill use of cotton was unchanged at 150.6 million pounds. The revised seasonally adjusted annualized rate of consumption for October is 3.78 million bales. This is higher than last year’s October annualized rate of 3.40 million bales.
Preliminary December domestic mill use of cotton and revised November figures will be released by Commerce on Jan. 27.
Sales Weak, Shipments Strong
Net export sales for the week ending Dec. 23 were 109,200 bales (480-lb). This brings total ’10-11 sales to approximately 14.4 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 6.3 million bales. Total new crop (’11-12) sales are 1.8 million bales.
Shipments for the week were 316,400 bales, bringing total exports to date to 4.1 million bales, compared with the 3.5 million bales at the comparable point in the ’09-10 marketing year.
Effective Dec. 31, '10-Jan. 6, ’11
Adjusted World Price, SLM 11/16
152.78 cents
*
Fine Count Adjustment ('09 Crop)
0.45 cents
Fine Count Adjustment ('10 Crop)
0.55 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
5
Special Import Quota (480-lb bales)
346,916
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
169.62 cents
Forward 5 Lowest 3135 CFR Far East
113.85 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
170.33 cents
Forward US CFR Far East
116.83 cents
'10-11 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-Nov.)
79.48 cents
**
**August-July average price used in determination of counter-cyclical payment
