13.73 Million US Cotton Acres Projected for '11

FTAs Mock Mark-Up Blocked

Farm Policy Hearing Held

Agriculture Committee Conducting Hearings

Ginners Urged to Review Gin Stocks Coverage

DOT Extends Comment Period

Sales Slip, Shipments Steady

In its June acreage report, USDA estimated '11 US cotton plantings at 13.73 million acres, up 25.1% from '10. Upland planted area is estimated to have increased 24.8% to 13.44 million acres. Extra-long staple (ELS) cotton producers planted 289,000 acres, up 41.5% from '10. USDA's June number is up 1.16 million acres from their initial '11 estimate released in March.

On a regional basis, upland area in the Southeast is up 20.8% to 3.14 million acres. All states saw an increase in terms of planted acres with the largest percentage increase in Virginia, up 38.6% to 115,000 acres, followed by North Carolina(+38.2%), South Carolina(+33.7%), and Alabama(+32.4%). Georgialeads all of that region's states in acres planted with an estimated 1.45 million, up 9.0% from '10.

Planted acres are expected to climb to 2.33 million acres in the Mid-South, up 21.4% from the previous year. With an estimated 600,000 acres, Mississippi(+42.9%) leads the region in greatest percentage increase while Arkansashas the most acres planted with an estimated 650,000 acres (+19.3%). Tennessee(+17.9%) will plant an additional 70,000 acres bringing their '11 estimate to 460,000 acres. Missouri (+9.7%) is expected to plant 340,000 acres while Louisiana(+9.8%)plantings are estimated at 280,000 acres.

In the Southwest, estimated upland area is up 26.9% to 7.47 million acres. USDA estimates that the largest increase in actual cotton acres will occur in Texas, up 1.55 million acres (+27.9%) from the previous year. Kansaswill see the largest percentage increase with an estimated 68,000 acres, up 33.3% from the previous year. Oklahomais expected to increase 15,000 to 300,000 acres (5.3%).

Estimated upland area in the West is up 36.2% to 500,000 acres. Producers in Californiaare estimated to increase plantings 53.2% to 190,000 acres while Arizonais expected to climb to 250,000 acres (28.2%). New Mexicois up 25.0% to 60,000 acres.

USDA estimates ELS plantings of 289,000 acres, up 41.5% from '10. ELS acres are up in all states except Texas,which is down 11.8% to 15,000 acres.

Republican Senate Finance Committee members successfully blocked a "mock" mark-up of three pending free trade agreements (FTA) -- Colombia, Korea and Panama.

Ranking Member Hatch (R-UT) objected to the inclusion of Trade Adjustment Assistance (TAA) renewal as part of the Korean-US Free Trade Agreement. He also objected to the scheduling process because more than 100 amendments had been filed prior to the mark-up.

Chairman Baucus (D-MT) said in the committee hearing room, with all other Democratic members present, that he was not able to conduct the hearing because Senate rules require at least one member from each party to meet the quorum requirement.

The mock mark-up was scheduled following an administration announcement on an agreement with House Ways and Means Chairman Camp (R-MI) to extend the TAA program to the end of '14. The administration insisted on TAA extension as a precondition for submitting the FTAs to Congress. However, attaching TAA renewal to the Korea FTA was not part of the agreement and is opposed by Republicans who want the legislation considered separately from the FTAs.

A mock mark-up is an informal process which allows the Finance and Ways and Means Committees to present the Obama Administration with nonbinding recommendations on draft implementing bills for trade pacts -- because under trade promotion authority procedures, the bills may not be amended once they are formally introduced.

The House Ways and Means Committee will hold its mock mark-up when members return after July 4. Chairman Baucus said the Finance Committee would reschedule the mock mark-up as soon as possible and that the right combination must be found for passing both TAA and the three trade agreements. After the committees wrap up their mock mark-up process, the next step would be for the administration to submit implementing legislation for each FTA. Once the administration submits formal implementing language, Congress will have 90 days to approve or reject the pact.

Lorem Rep. Conaway (R-TX), chairman of the House Agriculture Committee's Subcommittee on General Farm Commodities and Risk Management, held the first audit hearing on farm policy last week.

This audit of agricultural programs is the first step in the farm bill process. Each chairman of the six subcommittees will hold hearings to examine programs in their respective jurisdictions to determine spending trends and confirm how programs work together.

This hearing examined the Federal Crop Insurance Program. Subcommittee members looked for ways to reduce duplication between crop insurance and other farm programs, and examined whether the current administration and funding of the crop insurance program is sufficient to meet producer risk management needs.

Risk Management Agency (RMA) Administrator Bill Murphy testified on behalf of USDA. Subcommittee members’ questions focused on the program’s complexity, how to introduce new programs and how RMA intends to increase participation.

The House Agriculture Committee announced three of its subcommittees will conduct public hearings during the week of July 4 in Washington, DC, at 1300 Longworth House Office Bldg.

The Subcommittee on Conservation, Energy, and Forestry’s hearing, “Agricultural Program Audit: Examination of Conservation Programs,” will be on July 7 at 10:00 am EST. The Subcommittee on Nutrition and Horticulture will conduct, “Agricultural Program Audit: Examination of Specialty Crop Programs” on July 7 at 2 pm EST; and the Subcommittee on Conservation, Energy, and Forestry of the Committee on Agriculture and Subcommittee on Energy and Mineral Resources of the Committee on Natural Resources will conduct a joint hearing, “Challenges facing Domestic Oil and Gas Development: Review of Bureau of Land Management/US Forest Service Ban on Horizontal Drilling on Federal Lands” on July 8 at 10 am EST.

The National Cotton Ginners' Assoc. urges gins to carefully review the coverage and possible limitations of their gin stocks insurance policies. Most gins use these policies to protect against loss while seed cotton is being converted into its finished products.

Higher cotton prices have increased gins' liability. It is extremely important that gins take precautions to manage the risks associated with cotton prices and increased value of the various cotton products.

One pressing concern involves both the gin yard configuration and the amount of seed cotton being permitted for storage in the yard -- generally limited by a set dollar value and very specific distance requirements between yards. With the increases in cotton values, these yards will need to be carefully planned.

Gin stocks insurance policies also have a total aggregate dollar amount that the insurer will pay regardless of the extent of the loss. With the increases in cotton prices and the gin's liability for seed cotton storage, this aggregate amount also may require adjustment to address the higher risk that the gin will be assuming.

The US Dept. of Transportation's Federal Motor Carrier Safety Administration (FMCSA) issued a notice for public comments concerning the applicability of FMCSA regulations to operators of certain farm vehicles and off-road agricultural equipment.

FMCSA recently extended the comment period until Aug. 1, '11. See the June 17, '11 Cotton's Week for additional details on the comment request.

Net export sales for the week ending June 23 were -135,900 bales (480-lb). This brings total '10-11 sales to approximately 15.3 million bales. Total sales at the same point in the '09-10 marketing year were approximately 13.6 million bales. Total new crop ('11-12) sales are roughly 5.8 million bales.

Shipments for the week were 187,900 bales, bringing total exports to date to 13.5 million bales, compared with the 10.5 million bales at the comparable point in the '09-10 marketing year. With less than two months remaining in the marketing year, weekly shipments must average roughly 292,000 bales to reach the USDA projection of 15.0 million bales.