CURRENT ISSUE ARTICLES

Acreage Survey Deadline Approaching

USDA Cotton Production Estimate Raised

Mill Cotton Use Estimate Raised

Sign-up Open For SURE ’09 Losses Payments

CSP Sign-Up Period Extended Until Jan. 21

House Republicans Develop Plan to Overturn EPA Rules

US Cotton TV Program Saturates Japan

Ag Shipper Workshop Set

Sales Weak, Shipments Strong

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Acreage Survey Deadline Approaching

With the Jan. 18 deadline approaching, cotton producers are urged to respond to the NCC’s annual survey of ’11 planting intentions, which was distributed to upland and extra-long staple (ELS) cotton producers across the Cotton Belt. The questionnaire was distributed through a combination of regular mail and email with the intent of reaching all cotton farms. Growers who did not receive a questionnaire may contact the NCC via email at econsurvey@cotton.org for 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. Survey results will be presented during the Joint Meeting of Program Committees on Saturday morning, Feb. 5.

USDA Cotton Production Estimate Raised

In its January crop report, USDA projected the ’10-11 US crop to be 18.32 million bales, up 50,000 bales from the December report. Upland production was estimated at 17.82 million bales and extra-long staple (ELS) production at 498,000 bales. Harvested area was estimated at 10.71 million acres, implying a non-harvested area of 266,000 acres based on USDA’s revised acreage numbers in the January crop report. The resulting abandonment rate is roughly 2.43%. The national average yield per harvested acre was estimated at about 821 pounds, five pounds less than the five-year average.

On a regional basis, the Southeast crop is estimated at 4.31 million bales based on harvested acres of 2.57 million and a regional average yield of 804 pounds, 12 pounds higher than the region’s five-year average. In terms of yield per harvested acre, South Carolinaleads all states in the region with an estimated yield of 872 pounds per harvested acre, 151 pounds higher than their five-year average. Alabama, Florida and North Carolinaare the region’s other states projected to see gains in terms of yield when compared to their respective five-year average. Yield increases are expected to be between 31 pounds (Alabama) and 40 pounds (North Carolina). Georgia and Virginia are expected to see yield declines ranging between 29 pounds and 194 pounds, respectively.

In the Mid-South, expected production is 3.85 million bales. Harvested area is estimated to be 1.90 million acres with an expected yield of 971 pounds per harvested acre. Louisianais the only state in the region with yields below its five-year average -- down eight pounds from their five-year average to 864 pounds per harvested acre. The largest gains are expected to be seen in Mississippiand Missouriwhere yields are estimated at 983 pounds and 1,068 pounds per harvested acre, up 124 pounds and 92 pounds, respectively.

The Southwest upland crop is estimated at 8.55 million bales. Expected harvested area is 5.67 million acres and the regional average yield is 724 pounds, nine pounds above the region’s five-year average of 715 pounds per harvested acre. Kansasis expected to see the greatest gains in yield with an expected yield of 784 pounds per harvested acre, 182 pounds higher than their five-year average. Texasis set to lead all states in terms of production with an estimated crop of 8.05 million bales. Expected harvested area in Texas is 5.35 million acres with a yield estimate of 722 pounds, six pounds higher than its five-year average.

Upland production in the West is an estimated 1.12 million bales with an estimated harvested area of 362,000 acres and a regional average yield of 1,478 pounds, 128 pounds higher than the region’s five-year average. Californialeads the region in yield gains with an estimated 1,639 pounds per harvested acre, 276 pounds higher than their five-year average.

The ELS crop is an estimated 498,000 bales. Harvested area is pegged at 202,000 acres with an average yield of 1,184 pounds per harvested acre.

Mill Cotton Use Estimate Raised

USDA’s January report left US cotton exports unchanged from its December report at 15.75 million bales, while US mill use was raised 50,000 bales to 3.60 million bales. This generates a total ’10-11 offtake of 19.35 million bales. Ending stocks for ’10-11 are projected to be 1.90 million bales for an ending stocks-to-use ratio of 9.8%. For the ’09-10 crop year, USDA gauged US cotton production at 12.19 million bales. Mill use and exports were unchanged from the December report at 3.46 million bales and 12.04 million bales, respectively. Total offtake for the ’09-10 crop year was estimated at 15.50 million bales. Ending stocks were 2.95 million bales and the stocks-to-use ratio was 19.0% for the ’09-10 marketing year.

USDA’s January report lowered its ’10-11 world production estimate by 70,000 bales from the December report to 115.46 million bales. World mill use was raised 330,000 bales to a projected 116.58 million bales. Consequently, world ending stocks for ’10-11 are projected to be 42.84 million bales for a stocks-to-use ratio of 36.7%. For the ’09-10 marketing year, USDA estimated world production at 101.54 million bales, unchanged from the previous month. World mill use was raised 140,000 bales from the previous month to 118.52 million bales. World ending stocks on July 31, ’10 are pegged at 43.85 million bales. This has a corresponding stocks-to-use ratio of 37.0%.

Sign-up Open For SURE ’09 Losses Payments

Agriculture Secretary Tom Vilsack reminds eligible producers that the sign-up period for the ’09 crop year Supplemental Revenue Assistance Payments (SURE) program is open. SURE is one of five disaster programs included in the’08 farm billthat provides assistance to producers who have suffered losses due to natural disasters.

To be eligible for SURE a farm or ranch must have: 1) at least a 10% production loss on a crop of economic significance; 2) a policy or plan of insurance under the Federal Crop Insurance Act or the Noninsured Crop Disaster Assistance Program (NAP) for all economically significant crops; and 3) been physically located in a county that was declared a primary disaster county or contiguous county by the Agriculture Secretary under a Secretarial Disaster Designation. Without a Secretarial Disaster Designation, individual producers may be eligible if the actual production on the farm is less than 50% of the normal production on the farm due to a natural disaster. Producers who are considered socially disadvantaged, a beginning farmer or rancher, or a limited resource farmer may be eligible for SURE without a policy or plan of insurance or NAP coverage.

Producers interested in signing up must do so before July 29, ’11. For more information on the ’09 SURE program, visit any FSA county office or http://www.fsa.usda.gov/sure .

CSP Sign-Up Period Extended Until Jan. 21

USDA’s Natural Resources Conservation Service (NRCS) announced that the ranking period cut-off date for the Conservation Stewardship Program (CSP) has been extended to Jan. 21, ’11. Producers interested in CSP should submit applications to their local NRCS office by the deadline so that their applications can be considered during the first ranking period of ’11.

“CSP benefits rural communities across the nation by protecting and preserving critical natural resources,” NRCS Chief Dave White said. “We encourage those producers who have already made conservation a priority to apply and work with us to expand the scale of conservation on their land.”

CSP is offered in all 50 states through continuous sign-ups. The program provides many conservation benefits including improvement of water and soil quality and wildlife habit enhancements. Producers are encouraged to apply for CSP throughout the year to be considered for current and future application ranking periods. Those producers who apply by Jan. 21, ’11, may be eligible for current available funding. The program, authorized in the ’08 farm bill, offers payments to producers who maintain a high level of conservation on their land and agree to adopt higher levels of stewardship. Eligible lands include cropland, pastureland, rangeland and nonindustrial forestland.

A CSP self-screening checklist is available to help producers determine if CSP is suitable for their operation. The checklist highlights basic information about CSP eligibility requirements, contract obligations and potential payments. It is at local NRCS offices or at www.nrcs.usda.gov/programs/new_CSP/CSP.html. In addition, interested producers should visit NCC’s Conservation in Cotton Production site, www.cotton.org/econ/govprograms/conservation-programs.cfm, which includes a short informational video on CSP and a one page program fact sheet.

House Republicans Develop Plan to Overturn EPA Rules

The new Republican House majority is developing a three-pronged strategy to challenge EPA regulations, which includes: 1) a series of Congressional Review Act (CRA) votes, 2) spending cuts to prevent the implementation of regulations and 3) aggressive oversight to highlight the costs of the rules.

The CRA, which was passed in ’96 and successfully used only once, allows Congress to override federal agency rules by a simple majority vote in both chambers. The CRA has some limitations, however, which only allow challenges to rules within 60 days of their publication in the Federal Register (FR). That timeline could preclude efforts to revisit final rules like EPA's tailoring rule, which was published in the FR on June 3 and set first-time greenhouse gas permit (GHG) limits. According to the law, any regulations passed within 60 legislative days of the end of a congressional session are subject to review in the next session, meaning any rules published in the FR after July 30 could be subject to CRA resolutions. Among the rules issued late last year were regulations that would allow EPA to take over GHG permitting in Texas, which has refused to implement the tailoring rule.

Rep. Rogers (R-KY), the new chairman of the House Appropriations Committee, plans to introduce a major rescission package that could include steep cuts in funding for EPA, which could make it difficult to fully implement targeted rules.

The strategy’s third part will be oversight for EPA regulations. Key House committee chairmen such as Agriculture’s Lucas (R-OK), Oversight & Government Reform's Issa (R-CA) and Energy & Commerce's Upton (R-MI) already are lining up potential witnesses for oversight hearings to begin as soon as this month.

US Cotton TV Program Saturates Japan

A 75-minute television program featuring US cotton entitled, “Attractive Texas: Fashion, Food and Cowboys’ Spirit,” was broadcast to 35 million households in Japan by the TV Osaka network. The program’s objective was to give consumers in Japan – the third largest consumer market in the world – a better understanding of US cotton’s advantages. The filming, coordinated by Cotton Council International, followed two famous Japanese actresses into cotton fields during harvest season and a denim mill in the Lubbock area.

The TV Osaka network has a broadcasting area that covers about 70% of total Japanese households. The program had 1.3 million viewers. The advertising equivalent value for the program’s broadcast is $7.1 million.

Ag Shipper Workshop Set

Registration is open for the Feb. 1 Memphis Ag Shipper Workshop, which is designed by the Agriculture Transportation Coalition (AgTC) for ag exporters, importers and freight forwarders. As with past workshops, no carriers or press are invited in order to facilitate frank and constructive discussions of current challenges in ocean, trucking, rail and port movement of agriculture products. Online registration is available at http://www.agtrans.org.

According to AgTC, the workshop will be conducted in a roundtable format, which will provide an excellent opportunity to learn what transportation challenges other attendees from the Mid-South are facing and how these are being managed. Issues to be addressed include: ocean shipping competition; surcharges; gaining rate stability and protection from surcharges; container availability where you need it; AgTC's container match back program; truck weight limits; "green trucks" and union efforts to organize port dray trucking; Animal & Plant Health Inspection Service’s and other government roles in export approvals; rail policies and practices for handling ag products; the Federal Maritime Commission role in assisting ag shippers in dealing with cancelled or rolled bookings; rail; trucking and ocean competition legislation; and dealing with Mexican tariffs due to cross-border trucking disputes.

AgTC monitors government and commercial activity on ocean shipping and other transportation issues and keeps its members up-to-date on how these activities affect their businesses.

Sales Weak, Shipments Strong

Net export sales for the week ending Jan. 6 were 134,000 bales (480-lb). This brings total ’10-11 sales to approximately 14.5 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 7.0 million bales. Total new crop (’11-12) sales are 2.2 million bales.

Shipments for the week were 291,600 bales, bringing total exports to date to 4.7 million bales, compared with the 3.8 million bales at the comparable point in the ’09-10 marketing year.

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