NCC Vice Chairman Chuck Coley, a Vienna, GA, producer, joined American Cotton Producers Chairman Jimmy Dodson, a Robstown, TX, producer, in meetings with members of the House and Senate agriculture committees in Washington, DC, to discuss the NCC's upland cotton policy proposal approved at the mid-year meeting of the Council's Board of Directors. The new policy addresses expected reductions in the agricultural budget baseline arising from deficit reduction efforts. Additionally, the new policy proposal is intended to address the findings in the longstanding trade dispute with Brazil.
The NCC leaders were joined in the meetings by the NCC's President Mark Lange, Senior Vice President John Maguire and Vice President, Economics & Policy Analysis, Gary Adams. In addition, leaders from several regional cotton organizations participated in meetings with Congressional staff.
The NCC farm policy proposal was presented to officials of USDA and the US Trade Representative in preparation for scheduled quarterly meetings with Brazilian officials conducted as part of the Framework Agreement. The Framework, put in place in June '10, temporarily suspends any trade retaliation by Brazil but also calls for the dispute to be resolved as part of the development of the '12 farm bill.
Future actions by the agriculture committees will, in part, be determined by the activities of the newly-created Joint Committee (see Aug. 12 Cotton's Week). According to the timetable outlined in the Budget Control Act of 2011, the agriculture committees must submit recommendations to the Joint Committee by Oct. 14.
In other farm policy developments, the National Corn Growers Assoc. and the National Farmers Union released their policy recommendations for the '12 farm bill.
USDA Sees 16.56-Million Bale US Crop
In its September crop report, USDA estimated a '11-12 US crop of 16.56 million bales -- up 10,000 bales from the August report. Upland production was estimated at 15.82 million bales and extra-long staple (ELS) production at 737,200 bales. Harvested area was estimated at 9.85 million acres, implying a non-harvested area of 4.87 million acres based on USDA's revised June acreage report. The resulting abandonment rate is 33.1%. The national average yield per harvested acre was estimated to be 807 pounds, 15 pounds less than the five-year average.
On a regional basis, the Southeast crop is estimated at 5.19 million bales, based on harvested acres of 3.30 million and a regional average yield of 756 pounds, 32 pounds lower than the region's five-year average. In terms of yield per harvested acre, Virginialeads all states in the region with an estimated yield of 835 pounds per harvested acre, eight pounds more than its five-year average. The largest gains in yield are expected for Alabama, estimated at 698 pounds per harvested acre, 68 pounds more than its five-year average. Yields in the remaining Southeast states are expected to be lower than their respective five-year average. The largest decline in terms of yield is expected for North Carolinawith yields estimated at 720 pounds per harvested acre, 87 pounds lower than its five-year average.
In the Mid-South, expected production is 4.80 million bales. Harvested area is estimated to be 2.41 million acres and the expected yield 958 pounds per harvested acre. All states are expected to exceed five-year averages in terms of yield with the largest gains expected in Missouri and Louisiana. Missouriyields are estimated at 1,092 pounds per harvested acre, 93 pounds more than its five-year average, while Louisiana yields are estimated at 926 pounds per harvested acre, 61 pounds more than its five-year average.
The Southwest upland crop is estimated at 4.37 million bales. Expected harvested area is 3.37 million acres and the regional average yield is 623 pounds, 88 pounds less than its five-year average of 711 pounds per harvested acre. All that region's states are down in terms of yield with the greatest decline expected in Oklahoma, down 308 pounds to 432 pounds per harvested acre. The Texasupland crop is estimated at 4.20 million bales. Expected harvested area in that state is 3.20 million acres and the average yield is 630 pounds, down 81 pounds from its five-year average.
Upland production in the West is an estimated 1.46 million bales with an estimated harvested area of 492,000 acres and a regional average yield of 1,420 pounds, seven pounds below the region's five-year average. The greatest yield gains are expected in Arizona, up 41 pounds to an estimated 1,510 pounds per harvested acre.
The ELS crop is an estimated 737,200 bales. Harvested area is pegged at 288,000 acres, with an average yield of 1,231 pounds per harvested acre.
Source: USDA-NASS September Crop Production Report. 1/ Updated from June Acreage Report.
Mill Use Unchanged, Exports Lowered
In its September report, USDA sees '11-12 mill use unchanged at 3.80 million bales. Exports were lowered 300,000 bales from the August report to 12.00 million bales due to lower US supplies and lower imports by China. This generates a total '11-12 offtake of 15.80 million bales. Ending stocks for '11-12 are projected to be 3.40 million bales, for an ending stocks-to-use ratio of 21.5%.
For the '10-11 crop year, USDA gauged US cotton production at 18.10 million bales. Estimated mill use was raised 100,000 bales from the August report to 3.90 million bales. Exports were lowered 20,000 bales from the August report to 14.38 million bales. Total offtake for the '10-11 crop year is estimated at 18.28 million bales. Ending stocks were lowered 250,000 bales to 2.60 million bales. The estimated stocks-to-use ratio for the '10-11 marketing year is 14.2%.
The Aug. 25th Dept. of Commerce Cotton Consumption report included preliminary end-of-season mill use and stocks data. However, this data will not be revised in September due to the elimination of the Current Industrial Reports series. USDA's Farm Services Agency collects data on both cotton domestic mill use and stocks in public warehouses as part of its on-going program responsibilities. The August Commerce report and the FSA data were considered in making changes for the '10-11 crop year.
USDA's September report puts '11-12 world production at 122.96 million bales, up 250,000 bales from last month. Mill use is projected at 115.22 million bales, up 40,000 bales from last month. With beginning stocks at 43.97 million bales, this would result in world ending stocks of 51.91 million bales on July 31, '12, and a stocks-to-use ratio of 45.1%.
World production for the '10-11 marketing year was estimated to be 114.56 million bales, down 30,000 bales from last month. World mill use was raised 460,000 bales to 114.39 million bales. Consequentially, world ending stocks are estimated to be 43.97 million bales with a stocks-to-use ratio of 38.4%.
Congress Addressing GPS Issue
The dispute between LightSquared Inc. and global positioning system device manufacturers recently shifted back to Congress, where several House Armed Services Committee members criticized the Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA) for "advocating" for LightSquared at the expense of critical GPS operations.
NCC is a member of a coalition of GPS manufacturers, farm equipment companies and agricultural organizations closely monitoring the issue.
During a hearing of the House Armed Services Strategic Forces Subcommittee, Rep. Turner (R-OH), the subcommittee chairman, criticized the FCC for allowing LightSquared to move ahead with its proposed nationwide mobile broadband network, despite interference concerns. Reps. Turner and Sanchez (D-CA) have offered an amendment to the FY12 National Defense Authorization Act that would prevent the FCC from granting LightSquared final approval until the agency eliminates the threat of interference to Dept. of Defense and Dept. of Transportation GPS receivers.
In a Sept. 9 letter to Defense Deputy Secretary William Lynn and Transportation Deputy Secretary John Porcari, NTIA Administrator Lawrence Strickling urged both agencies to work with LightSquared to develop a joint testing plan to assess interference between the company's network and cellular and personal/general navigation GPS receivers. NTIA said the testing and analysis should be completed by Nov. 30. The agency also said a second phase of testing will be necessary to evaluate LightSquared's proposed plan for mitigating interference to high-precision and timing receivers.
Two days later, the FCC's International Bureau and Office of Engineering and Technology issued a public notice concurring with the NTIA on the need for additional testing. During the hearing, Rep. Scott (R-GA) expressed concern that NTIA is essentially "advocating" on behalf of a private-sector corporation.
Both agencies play a vital role. While the FCC manages all commercial and public radio spectrum in the United States, the NTIA manages the federal government's use of the airwaves. Under the FCC's initial March '10 order approving the transaction that led to the creation of LightSquared, the company must also build a terrestrial broadband network covering at least 100 million people by the end of '12, at least 145 million people by the end of '13, and at least 260 million people by the end of '15. Failure to comply with the build-out condition would result in the company's licenses automatically cancelling.LightSquared could ask the commission to ease deadlines given the issues related to GPS interference.
Despite criticisms, the FCC has withheld final approval until the interference issues are resolved.
In June, LightSquared unveiled a new plan for deploying its network using a different block of spectrum that is farther away from the GPS spectrum band. It also has agreed to limit the permitted power level of an estimated 40,000 base stations to avoid overwhelming the signals of GPS devices. Recent test results have confirmed that use of the company's upper 10 MHz block of frequencies—not the lower block, the block that LightSquared now proposes to use for initial rollout of its network—interfered with GPS receivers used by the Coast Guard, NASA and the Federal Aviation Administration, and caused GPS receivers used by state police, fire, and ambulance crews to lose reception.
Jeffrey Carlisle, LightSquared's executive vice president of regulatory affairs, has said that the company plans to unveil a prototype receiver that will allow precision GPS devices to operate without experiencing harmful interference from LightSquared's network in the lower 10 megahertz block of spectrum.
'12 Beltwide Cotton Conferences Early Housing Opens
Early room reservations for the '12 Beltwide Cotton Conferences now can be made through Oct. 31 – as a special benefit for NCC and Cotton Foundation members only. The forum is set for Jan. 3-6 at the Orlando World Center Marriott.
Conference information, including instructions for early housing and registration, is available at www.cotton.org/beltwide. A printed brochure will be mailed soon to all previous Beltwide attendees.
Key agronomic, pest management, economic and policy reports are being planned for the Cotton Production Conference. Among key issues to be addressed are herbicide resistance prevention/management, various insect pest concerns ranging from plant bug pressure to secondary insect pest problems, and managing cotton with the changing arsenal of plant protection products.
Even greater interaction and information sharing between producer speakers, panelists and attendees on these and other topics is being planned in the workshops. Attendees can discuss management strategies with producers and university experts from across the Cotton Belt. They also will be able to hear updates on new chemistries, plant varieties, equipment and emerging technologies from industry representatives.
Sales, Shipments Continue to Lag
Net export sales for the week ending Sept. 8 were -175,700 bales (480-lb). This brings total '11-12 sales to approximately 6.8 million bales. Total sales at the same point in the '10-11 marketing year were approximately 7.9 million bales. Total new crop ('12-13) sales are 185,800 bales.
Shipments for the week were 66,700 bales, bringing total exports to date to 662,800 bales, compared with the 1.2 million bales at the comparable point in the '10-11 marketing year.
Effective Sept. 16-22, ’11
Adjusted World Price, SLM 11/16
100.57 cents
*
Fine Count Adjustment ('10 Crop)
1.58 cents
Fine Count Adjustment ('11 Crop)
1.63 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)
204,465
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
121.13 cents
Forward 5 Lowest 3135 CFR Far East
NA
Coarse Count CFR Far East
NA
Current US CFR Far East
130.05 cents
Forward US CFR Far East
NA
'10-11 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-July)
81.43 cents
**
**August-July average price used in determination of counter-cyclical payment
