In its July report, USDA projects US '11-12 cotton production at 16.00 million bales, down 1.00 million bales from the previous month. Exports were lowered 1.00 million bales to 12.00 million bales while mill use was unchanged at 3.80 million bales. Projected total offtake is 15.80 million bales. With beginning stocks of 2.75 million bales, this would result in US ending stocks of 3.00 million bales on July 31, '12, and a stocks-to-use ratio of 19.0%.
For the '10-11 marketing year, USDA estimates US production to be 18.10 million bales. Mill use is unchanged from the previous month at 3.80 million bales while exports were lowered 500,000 bales to 14.50 million bales. The estimated total offtake now stands at 18.30 million bales, generating ending stocks of 2.75 million bales and a stocks-to-use ratio of 15.0%.
The USDA report projects world production for the '11-12 marketing year to be 123.16 million bales, down 610,000 bales from the June report. World mill use was lowered 2.20 million bales to 116.75 million bales. With beginning stocks at 44.40 million bales, this would result in world ending stocks of 51.00 million bales on July 31, '12, and a stocks-to-use ratio of 43.7%.
For the '10-11 marketing year, USDA raised world production 270,000 bales from June to 114.56 million bales. Mill use is estimated at 114.93 million bales, 580,000 bales lower than the previous month. Consequently, world ending stocks are estimated to be 44.40 million bales with a stocks-to-use ratio of 38.6%.
ESA May Force EPA to Strengthen Pesticide Permits
Earlier this year, EPA released its draft permit under the Clean Water Act (CWA) for certain pesticide uses as mandated by a ruling of the Sixth Circuit Court of Appeals.The agency, however, noted that the permit may change in accordance with the results of consultations with both the National Marine Fisheries Service (NMFS) and the Fish & Wildlife Service (FWS) as required by the Endangered Species Act (ESA).
On June 17, NMFS issued its Biological Opinion (BiOp) on the impact on aquatic endangered species of EPA's draft pesticide general permit and concluded that the permit in its current form is likely to jeopardize the continued existence of 33 endangered or threatened species under NMFS' jurisdiction and result in the destruction or adverse modification of critical habitat that has been designated for 29 of those species.
As a remedy, NMFS is calling on EPA to take several steps to strengthen the permit requirements in at least three states where it applies, including Idaho, Massachusetts and New Hampshire, as well as on federal lands in Washington State and on tribal land in other regions. NMFS says these areas require stricter conditions because they overlap with areas that have a high concentration of endangered species under their jurisdiction, including various salmon and trout species in the Northwest.
Among other things, NMFS requires EPA to demonstrate that there is no spraying in a critical habitat, no spraying in the "range" of endangered species, and that there is no known adverse effects on species from the chemicals. Moreover, it calls on EPA to strengthen the paperwork requirements to provide additional details about activities and planned chemical use. NMFS also is requiring EPA to establish a monitoring plan to ensure pesticide pollutant discharges do not exceed water quality criterion.
The final EPA-issued permit will apply in those states and regions that do not have delegated CWA permit authority -- Idaho, Massachusetts, Oklahoma, Alaska, New Hampshire, New Mexico, as well as tribal and federal lands. The ESA only applies to federal agencies and actions and, therefore, delegated states will not have to abide by the ESA BiOps but EPA hopes that other states will follow the agency's approach. However, few states with delegated permit authority are expected to adopt measures to protect endangered species.
Under the ESA, the NMFS opinion is binding and its terms must be implemented in their entirety. The NMFS opinion is the first of two that must be completed before EPA can promulgate the permit. The FWS review may find even greater impacts than the NMFS review because FWS oversees a significantly greater number of species potentially at risk from spraying than NMFS.
Such requirements could heighten industry pressure on Congress to pass legislation exempting pesticide applications from CWA permit requirements and, thus, overriding the court mandate. Sens. Boxer (D-CA) and Cardin (D-MD) currently are blocking the legislation, HR 872, from proceeding in the Senate.Senate Majority Leader Reid (D-NV) has said that he will not bring up the bill until a deal is worked out between the senators who have placed holds on the bill and the advocates for it.
Clean Water Act Measure Endorsed by House
The House voted to give states more say over water quality standards. By a 239-184 vote, lawmakers backed a proposal (HR 2018) to limit the federal agency's authority to enforce new or revised clean water standards. House Transportation and Infrastructure Chairman Mica (R-FL) and Ranking Member Rahall (D-WV) cosponsored the measure that would restrict the EPA's authority under the Clean Water Act (CWA) to override state water pollution plans and enforce stricter standards.
The proposal comes in response 1) to EPA actions over the past two years to stall mountaintop mining in Appalachia over concerns about stream contamination and 2) to insist on numeric nutrient standards in Florida.
The House adopted, 268-152, an amendment by Rep. Capito (R-WV) to require the EPA to look at the economic impact of its CWA-related actions before new changes are enacted.
Other GOP lawmakers argued the bill would curb an overly aggressive EPA, restoring the balance between states and the federal government on water quality regulation. Many in Congress have argued that under the longstanding system of CWA "cooperative federalism," states have primary responsibility for water pollution control.
The measure did garner the backing of 16 Democrats but many Democrats worried that the legislation would allow states to create their own standards, to the detriment of neighboring states that share water resources. The White House also weighed in with concerns, issuing a veto threat on the bill and saying the bill would "significantly undermine the Clean Water Act and could adversely affect public health, the economy and the environment."
House Judiciary Moves Regulatory Reform Bill
The House Judiciary Committee passed a bill (HR 527) on July 7 that would amend the Regulatory Flexibility Act to ensure that all federal agencies undertake a more complete analysis of the potential economic impacts of proposed rules and regulations on small businesses. The bill, the Regulatory Flexibility Improvements Act, was introduced by House Judiciary Chairman Smith (R-TX). It cleared the committee on a party-line vote of 18 to 8.
"The Small Business Administration (SBA) estimates that federal regulations impose a crushing $1.75 trillion burden on the economy -- $15,000 per household," Rep. Smith said. "Excessive regulations create a hardship on small businesses."
Republicans said regulatory reform is long overdue. Democrats said the bill is part of the GOP's anti-regulatory agenda. Rep. Smith said the bill would make much-needed revisions to the Regulatory Flexibility Act of 1980 and to the Small Business Regulatory Enforcement Fairness Act of 1996.
While those statutes require agencies to prepare analysis of the impact of proposed regulations on small businesses, the Government Accountability Office has found that agency compliance is inconsistent. Some agencies avoid conducting regulatory analysis simply by issuing boilerplate language that says a new rule will not have a significant economic impact on small businesses.
Under the House bill, the SBA would play a much larger role in deciding when agencies must conduct an analysis and whether an exemption is justified. Rep. Smith said current law requires only three agencies -- the EPA, the Consumer Financial Protection Bureau and the Occupational Safety and Health Administration -- to consider the advice of small business advocacy review panels before issuing new regulations. The new bill would require all agencies to use advocacy review panels. The bill would 1) eliminate agencies' ability to waive or delay compliance with regulatory flexibility analyses, 2) grant additional powers to the SBA's chief counsel for advocacy and 3) subject a broader range of agency rules to public comment and review.
In the Senate, Sen. Snowe (R-ME), the ranking member of the Senate Small Business and Entrepreneurship Committee, has authored similar legislation (S. 474, the Freedom Act) aimed at easing the regulatory burden on small businesses. A majority of the Senate voted for her bill on June 20 when it was offered as an amendment to another measure, but it did not clear a 60-vote procedural threshold.
Mid-South Producers Seeing San Joaquin Valley Operations
A group of 13 cotton producers from Arkansas, Louisiana, Mississippi, Missouri and Tennessee will observe cotton and other agriculture operations in California's San Joaquin Valley on July 18-20, as part of the '11 Producer Information Exchange (PIE) Program.
The program, sponsored by Bayer CropScience through a grant to The Cotton Foundation, is coordinated by the NCC and now in its 23rd year of helping its cotton producer participants improve yields and fiber quality. The PIE program enables cotton producers to improve yields and fiber quality along with boosting their overall operation's efficiency by: 1) gaining new perspectives in such fundamental practices as land preparation, planting, fertilization, pest control, irrigation and harvesting and 2) observing firsthand the unique ways in which their innovative peers are using new and existing technology.
Tour participants include: Arkansas – Phil Neri, Jr., Marion; and Woody Ray, Jr., Marked Tree; Louisiana – Thomas Crigler, St. Joseph; Marshall Hardwick, Newellton; and Colter Roy, Morganza; Mississippi – Gary Bailey, Tunica; Will Fratesi, Greenville; Will Long, Indianola; and Michael Thompson, II, Greenwood; Missouri – Chad Parker, Sikeston; and Tennessee – Eugene Pugh, III, Halls; Hedrick Shoaf, Medina; and Bob Walker, Somerville.
Their tour will begin on July 18 with a briefing from the California Cotton Ginners/Growers Assoc. in Fresno before touring the Enns Packing/King Fresh Produce facilities nearby. They also will see almond production and get a briefing from the Central California Almond Growers Assoc. in Kerman. The next day, they will see Gilkey Enterprises' cotton operations and other Corcoran area farms before touring Terra Nova Ranch in Helm and other cotton farms in that area. The tour will conclude on July 20 with visits to the Quady Winery in Madera and to the Morning Star tomato processing operation and Delta Farms, both in Los Banos.
The other three tours will have Far West producers traveling to Louisiana and Mississippi on July 31-Aug. 5; Southwest producers visiting Georgia, Alabama and Florida on Aug. 7-12; and Southeast producers seeing operations in W. Texas/S. Texas on Aug. 21-26. Upon completion of this year's tours, PIE will have exposed more than 900 US producers to innovative production practices in regions other than their own.
Shipments Remain Steady
Net export sales for the week ending July 7 were -93,900 bales (480-lb). This brings total ’10-11 sales to approximately 15.1 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 13.8 million bales. Total new crop (’11-12) sales are roughly 6.3 million bales.
Shipments for the week were 121,700 bales, bringing total exports to date to 13.8 million bales, compared with the 11.1 million bales at the comparable point in the ’09-10 marketing year. With less than one month remaining in the marketing year, weekly shipments must average roughly 228,000 bales to reach the USDA projection of 14.5 million bales.
Effective July 15-21, ’11
Adjusted World Price, SLM 11/16
103.91 cents
*
Fine Count Adjustment ('10 Crop)
0.72 cents
Fine Count Adjustment ('11 Crop)
0.77 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
NA
Forward 5 Lowest 3135 CFR Far East
124.42 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
NA
Forward US CFR Far East
127.50 cents
'10-11 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-May)
81.47 cents
**
**August-July average price used in determination of counter-cyclical payment
