US Trade Representative Kirk told the House Agriculture Committee that free trade agreements (FTA) with South Korea, Panama and Colombia could “certainly” be passed by August and perhaps sooner if an expanded trade adjustment assistance program is approved by Congress.
Agriculture Secretary Vilsack told the panel that almost two-thirds of US agricultural exports to Korea will be duty-free immediately on implementation of the pact, including corn, cotton, cherries, orange juice, grape juice and whey. He said the Colombia FTA is estimated to generate an increase of 44% in US agricultural exports to that country, noting that US exporters will get immediate duty-free treatment on products accounting for almost 70% of total trade on implementation of the Colombia pact.
The three agreements were negotiated by the Bush Administration and have been stalled for years.
“We believe passage of trade adjustment assistance and extension of the preference programs should be a part of this broader trade agenda that we are asking Congress to approve,” Kirk told reporters under questioning after the hearing.
Two major preference programs—the Generalized System of Preferences and the Andean Trade Preference Act—have expired and the administration has called for their extensions. The US-Colombia FTA is considered the most controversial of the three because of opposition by unions.
Work on the three FTAs was jump-started on May 5 when the administration announced that Colombia had met key benchmarks in a labor action plan designed to resolve long-standing concerns on labor issues.
In addition to Ambassador Kirk and Secretary Vilsack, witnesses reporting from the National Assoc. of Wheat Growers, American Farm Bureau Federation, National Corn Growers Assoc., National Cattlemen’s Beef Assoc. and National Pork Producers Assoc. testified in favor of the FTAs and urged prompt Congressional approval of implementing legislation.
Discussions among World Trade Organization (WTO) members about the stalled Doha Round revealed widely differing views on the best way to salvage the negotiations.
On April 21, WTO Director General Lamy called on the organization's members to rethink the way forward for the negotiations, arguing that continuing with “business as usual” was no longer an option. He then scheduled a round of talks with key delegations, including the United States, to hear views on what is a reasonable expectation for an outcome.
The Doha negotiations experienced a major crisis in late March after the United States told key WTO members that bilateral talks with major developing countries revealed unbridgeable gaps on market access issues. Trade diplomats said that three general views emerged from the most recent talks: 1) members who still believe a Doha deal still can be finalized by year’s end; 2) those who believe there should be a push for a “Doha lite” package with less ambitious outcomes on the market access talks in agriculture, industrial tariffs and services; and 3) those favoring talks focused on achieving an interim deal on rules-based issues at the WTO's December ministerial conference.
Reports indicate that while there are deep differences on the best option for moving forward, nobody is prepared to declare the Round dead. Most believe that completing the negotiations by the end of ’11—the goal set by the membership late last year—is virtually an impossible goal. Many members also believe that regardless of the strategy pursued, WTO members should be able to agree on some “deliverables” by the December ministerial conference as a confidence-building measure.
Lamy is expected to continue talks on May 16-17 before attending a meeting of trade ministers from the Asia-Pacific Economic Cooperation forum in Big Sky, MT. He also has scheduled consultations in Geneva on May 23-24 before attending the Organization for Economic Cooperation and Development ministerial in Paris. He is scheduled to report the consultations’ results and outline the degree of support for each option on advancing the Doha talks to the WTO membership on May 31.
Bulletin Clarifies Corps’ Levee Breach Action
To address questions that have arisen regarding the crop insurance coverage for flooding that resulted from the Army Corps of Engineers' actions to relieve pressure on the Mississippi River Levee system, Risk Management Agency (RMA) Administrator William Murphy issued a bulletin.
The bulletin, available at the NCC’s home page,www.cotton.org, clarifies crop insurance indemnity eligibility for cropland flooded as a result of the Corps' levee breach at Birds Point/New Madrid.
A separate determination will be made by RMA if the Morganza Spillway is opened.The NCC is working with RMA on this issue and will post updates as they become available.
The NCC also is very concerned about the production impact of severe drought conditions in large portions of the Cotton Belt, especially in the Southwest. Producers are urged to contact local Farm Service Agency offices to determine what assistance may be available from disaster declarations now or in the future.
The effects of the extreme weather conditions are evident in USDA’s latest estimates of planting progress for the ’11 cotton crop. The most significant delays are evident in several Mid-South states. As of May 8, just 2% of Missouri’s cotton acres were planted, as compared to a five-year average of 44%. Likewise, Tennessee’s cotton plantings stand at 2% complete, down from the average pace of 17%. Arkansas and Mississippi also report significant delays. Complete state-by-state results can be found atwww.cotton.org/econ/cropinfo/progress.cfm.
USDA Projects 18 Million Bale US Crop
In its May report, USDA projected ’11-12 marketing year US cotton production to be 18.00 million bales. Mill use is projected at 3.80 million bales while exports are projected to fall to 13.50 million bales. The estimated total offtake stands at 17.30 million bales. With beginning stocks of 1.75 million bales, this would result in US ending stocks of 2.50 million bales on July 31, ’12, and a stocks-to-use ratio of 14.5%.
USDA’s final US ’10-11 cotton production number was 18.10 million bales, unchanged from the previous month and down from the January estimate of 18.32 million bales (see table below). The upland crop was lowered 217,000 bales from the January estimate to 17.60 million bales while the extra long staple (ELS) crop increased 6,000 bales to 504,000. Final planted area is pegged at 10.97 million acres and final harvested area comes in at 10.70 million acres. The ’10-11 national upland yield is set at 805 pounds per harvested acre, 11 pounds below the five-year average of 816 pounds. The national average ELS yield of 1,200 pounds per harvested acre represents a 45-pound decrease in yield when compared to the five-year average.
Mill use for ’10-11 was raised 100,000 bales to 3.80 million bales and exports were lowered 250,000 bales to 15.50 million bales. The estimated total offtake now stands at 19.30 million bales, generating ending stocks of 1.75 million bales and a stocks-to-use ratio of 9.1%.
For the ’11-12 marketing year, USDA’s May report projects record world production of 124.72 million bales with India, China and Pakistan accounting for 70% of the sharp increase. Mill use is set at 119.50 million bales. With beginning stocks at 42.52 million bales, this would result in world ending stocks of 47.93 million bales on July 31, ’12, and a stocks-to-use ratio of 40.1%.
USDA gauged world production for the ’10-11 marketing year at 114.60 million bales, up 70,000 bales from the April report. World mill use was lowered 610,000 bales. Consequently, world ending stocks are estimated to be 42.52 million bales with a stocks-to-use ratio of 36.5%.
US Cotton Crop, ’10-11
PLANTED
ACRES
Thou.
HARV.
ACRES
Thou.
YIELD PER
HARV.
ACRE
Lb.
5-YEAR
AVG.
YIELD
Lb.
480-
POUND
BALES
Thou.
UPLAND
SOUTHEAST
2,597
2,570
808
792
4,324
Alabama
340
338
682
653
480
Florida
92
89
766
771
142
Georgia
1,330
1,315
821
840
2,250
North Carolina
550
545
838
814
951
South Carolina
202
201
898
721
376
Virginia
83
82
732
879
125
MID-SOUTH
1,920
1,894
970
915
3,827
Arkansas
545
540
1,045
1,011
1,176
Louisiana
255
249
842
872
437
Mississippi
420
410
993
859
848
Missouri
310
308
1,068
976
685
Tennessee
390
387
845
822
681
SOUTHWEST
5,886
5,670
706
715
8,344
Kansas
51
50
787
602
82
Oklahoma
285
270
750
731
422
Texas
5,550
5,350
703
716
7,840
WEST
367
363
1,461
1,350
1,105
Arizona
195
193
1,517
1,410
610
California
124
123
1,483
1,363
380
New Mexico
48
47
1,174
1,026
115
TOTAL UPLAND
10,770
10,497
805
816
17,600
TOTAL ELS
204
202
1,200
1,245
504
Arizona
3
3
845
891
4
California
182
180
1,237
1,310
464
New Mexico
3
3
836
825
5
Texas
17
17
902
821
31
ALL COTTON
10,974
10,699
812
826
18,104
Supreme Court Poised to Consider EPA Pesticide Case
The Supreme Court will decide later this month whether to hear a precedent-setting case about whether EPA has the discretion to reject requests from pesticide registrants seeking administrative hearings over the cancellation of food tolerances for their chemicals. Under law, a registrant may request an administrative hearing to challenge EPA’s scientific findings.
The court recently indicated that the justices are scheduled to discuss whether to hear the case, National Corn Growers Assoc. et al v. EPA, at a May 26 conference, which means a decision on whether the court will hear the case could be announced as soon as May 31.
Agricultural groups and pesticide maker FMC Corp. are suing EPA for rejecting their request for an administrative hearing when it revoked food safety tolerances for carbofuran (Furadan) which they say effectively banned its use. The pesticide is widely used to control pests that attack corn, potatoes, sunflowers and cotton. FMC has previously cancelled uses for cotton and citrus in an attempt to maintain other uses.
The petitioners are asking the high court to overturn a lower court ruling that found EPA had discretion to reject the industry request for an administrative hearing. The case is being watched closely because a favorable decision for the industry could make it easier for other registrants to hold hearings under the Federal Food, Drug & Cosmetic Act, where they can challenge the science EPA relies on when regulating the pesticides.
RFID Technology Permeating Logistics
For several years, the NCC has followed the emergence of radio frequency identification (RFID) technology and contemplated its deployment as an alternative to current barcoded permanent bale identification tags.
As RFID becomes more commonplace, online journals like SupplyChainBrain describe how RFID is being utilized not only as a logistics management tool but as a tracking tool being employed in the aftermath of a recent series of tornadoes and floods that devastated portions of the Southeast.
Specifically, a government contractor, Partnership for Response and Recovery Inspections, is employing RFID to help it distribute Federal Emergency Management Agency inspection kits to its field workers efficiently, and to ensure that all items within those kits are accounted for after inspections are completed.
Sales Weak, Shipments Strong
Net export sales for the week ending May 5 were -1,600 bales (480-lb). This brings total ’10-11 sales to approximately 15.7 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 11.7 million bales. Total new crop (’11-12) sales are roughly 5.7 million bales.
Shipments for the week were 366,700 bales, bringing total exports to date to 11.9 million bales, compared with the 8.4 million bales at the comparable point in the ’09-10 marketing year.
Effective May 13-19, ’11
Adjusted World Price, SLM 11/16
145.75 cents
*
Fine Count Adjustment ('10 Crop)
0.57 cents
Fine Count Adjustment ('11 Crop)
0.62 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
1
Limited Global Import Quota (480-lb bales)
217,208
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
162.59 cents
Forward 5 Lowest 3135 CFR Far East
139.90 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
170.70 cents
Forward US CFR Far East
142.25 cents
'10-11 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-March)
81.39 cents
**
**August-July average price used in determination of counter-cyclical payment