As previously reported in Cotton's Week (10/29/11), the FY12 agriculture appropriations bill recently signed into law includes a provision requiring USDA to implement an additional adjusted gross income (AGI) test to determine eligibility for '12 direct payments.
USDA has issued a Notice, available on the NCC's website at www.cotton.org/issues/2011/upload/11fsaaginotice127.pdf, which provides FSA offices with instructions to implement the new test. In addition to the $500,000 three-year average non-farm AGI and the $750,000 three-year average farm AGI, a $1 million three-year average AGI test will be applied to all persons and legal entities that request '12 direct payments. The $1 million three-year average non-farm AGI limitation remains effective for conservation program participants.
The recently released one-page Form CCC-931, which provided for the certification of average AGI compliance and consent to the disclosure of tax information, has been revised to include the additional $1 million three-year average AGI limitation. The effective date of the revised CCC-931 is Dec. 7, '11.
If a program participant previously has submitted an earlier version of Form CCC-931 for the '12 program year, they may be required to complete the revised CCC-931, which includes the new additional $1 million average AGI limitation for '12 AGI compliance and verification purposes.
House Passes Dust Bill
The House passed the Farm Dust Regulation Prevention Act, H.R. 1633, that would prevent EPA regulation of a particular type of farm dust, which the bill calls "nuisance dust," kicked up by dirt roads and agricultural activities unless there was convincing evidence of health effects and no state control programs.
The White House issued a veto threat on the bill, calling it "ambiguously written." The Statement of Administration Policy goes on to say the measure "addresses a problem that does not exist" and "would create high levels of regulatory uncertainty regarding emission-control requirements that have been in place for years." In floor debate, the bill's Democratic opponents repeatedly stated that it was unnecessary because Administrator Jackson previously had stated that she is not seeking to tighten farm dust rules. They also claimed that the bill's definitions would exempt mining operations from air quality regulations. Bill supporters argued that they want to ascertain that Jackson keeps her word and repeatedly cited the agricultural community's broad concern.
The bill likely will have a difficult time in the Senate as a stand-alone measure. However, it could be one of the few environmental riders that makes it into an omnibus spending package because a companion Senate bill has support from two key Democrats in tough re-election fights, Sens. Nelson (D-NE) and McCaskill (D-MO).
USDA Sees 15.83 Million Bale US Crop
In its December crop report, USDA estimated a '11 US crop of 15.83 million bales -- 470,000 bales less than estimated in the November report. Upland production is seen at 15.09 million bales and extra-long staple (ELS) production at 737,000 bales. Harvested area is 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 is estimated to be 771 pounds, 51 pounds less than the five-year average.
On a regional basis, the Southeast crop is estimated at 5.14 million bales, based on harvested acres of 3.30 million acres and a regional average yield of 747 pounds, 41 pounds less than the five-year average for the region. In terms of yield per harvested acre, Georgialeads all states in the region with an estimated yield of 837 pounds per harvested acre, four pounds more than the five-year average yield. The largest yield gains are expected for Alabama with an estimated yield of 742 pounds per harvested acre, 112 pounds higher than their five-year average. The largest yield shortfall is expected for North Carolina with yields estimated at 600 pounds per harvested acre, 207 pounds less than their five-year average.
In the Mid-South, expected production is 4.65 million bales. Harvested area is estimated to be 2.41 million acres with an expected yield of 928 pounds per harvested acre. Only Arkansasis expected to see a below-average yield with an estimated 938 pounds per harvested acre, 76 pounds less than their five-year average. Mississippiis expected to lead the region in yield gains with an estimated 952 pounds per harvested acre, 74 pounds more than their five-year average.
The Southwest upland crop is estimated at 3.86 million bales. Expected harvested area is 3.37 million acres and the regional average yield is 550 pounds, 161 pounds less than their five-year average of 711 pounds per harvested acre. All of the 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 3.70 million bales. Expected harvested area is 3.20 million acres and the average yield is 555 pounds, 156 pounds less than their five-year average.
Upland production in the West is an estimated 1.45 million bales based on harvested area of 492,000 acres and a regional average yield of 1,410 pounds, 17 pounds less than the region's five-year average yield. The greatest yield gains are expected for Arizona, up 41 pounds to an estimated 1,510 pounds per harvested acre.
The ELS crop is an estimated 737,000 bales. Harvested area is pegged at 288,000 acres with an average yield of 1,231 pounds per harvested acre.
Source: USDA-NASS December Crop Production Report. 1/ Updated from June Acreage Report.
Mill Use Estimate Lowered, Exports Unchanged
In its December report, USDA lowered its US cotton mill use estimate by 200,000 bales to 3.60 million bales. Exports were unchanged at 11.30 million. This generates a total '11-12 offtake of 14.90 million bales. Ending stocks for '11-12 are projected to be 3.50 million bales, giving an ending stocks-to-use ratio of 23.5%.
For the '10-11 crop year, USDA gauged US cotton production at 18.10 million bales. Mill use and exports were unchanged from the November report at 3.90 million and 14.38 million bales, respectively. Total offtake for the '10-11 crop year is pegged at 18.28 million bales. Ending stocks were unchanged from the previous month at 2.60 million bales. The stocks-to-use ratio for the '10-11 marketing year is 14.2%.
USDA's December report lowered the '11-12 world production estimate by 470,000 bales from the November report to 123.42 million bales with the full change in the world crop reflecting the smaller US crop. World mill use was lowered 2.93 million bales from the November report to a projected 111.34 million bales. Consequently, world ending stocks for '11-12 are projected to be 57.67 million bales for a stocks-to-use ratio of 51.8%.
For the '10-11 marketing year, USDA puts world production at 115.28 million bales, unchanged from last month's report. World mill use was lowered 180,000 bales to 114.17 million. World ending stocks on July 31, '11 are now estimated at 45.49 million bales. This has a corresponding stocks-to-use ratio of 39.8%.
Gulf Coast Task Force Releases Restoration Strategy
The Gulf Coast Ecosystem Restoration Task Force released its final strategy for long term restoration of the Gulf Coast ecosystem. The plan was developed through extensive feedback from citizens throughout the region, including more than 40 public meetings.
The task force consists of representatives from the five Gulf states and 11 federal agencies, including the EPA, the White House Council on Environmental Quality, USDA, the Depts. of Commerce, Defense, Interior, Justice, Transportation, the Office of Management and Budget, the Office of Science and Technology Policy and the White House Domestic Policy Council.
The Task Force delivered the final strategy on Dec. 2 to President Obama, who established the Task Force by executive order. The strategy is the first restoration blueprint ever developed for the Gulf with the full involvement of all of the essential parties throughout the region, including the states, tribes, federal agencies, local governments and thousands of involved citizens and organizations. The plan represents a commitment by all parties to continue to work together in an unprecedented collaboration to prepare the Gulf region to transition from response to recovery and address the decades-long decline that the Gulf's ecosystem has endured.
The strategy's key priorities include stopping the loss of critical wetlands, sand barriers and beaches as well as reducing nutrient flow into the Gulf. With the release of the final strategy, the Task Force marks the beginning of the implementation phase of the strategy by announcing new initiatives, including $50 million in assistance from the USDA's Natural Resources Conservation Service to help agricultural producers in seven Gulf Coast river basins improve water quality, increase water conservation and enhance wildlife habitat.USDA's multi-year environmental restoration effort, known as the Gulf of Mexico Initiative (GoMI) represents a 1,100% increase in financial assistance for Gulf priority watersheds.
Net export sales for the week ending Dec. 1 were -23,600 bales (480-lb). This brings total '11-12 sales to approximately 10.4 million bales. Total sales at the same point in the '10-11 marketing year were approximately 13.7 million bales. Total new crop ('12-13) sales are 409,200 bales.
Shipments for the week were 252,100 bales, bringing total exports to date to 2.1 million bales, compared with the 3.1 million bales at the comparable point in the '10-11 marketing year.
Effective Dec. 9-15, ’11
Adjusted World Price, SLM 11/16
78.36 cents
*
Fine Count Adjustment ('10 Crop)
1.65 cents
Fine Count Adjustment ('11 Crop)
1.70 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
5
Limited Global Import Quota (480-lb bales)
335,149
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
98.92 cents
Forward 5 Lowest 3135 CFR Far East
NA
Coarse Count CFR Far East
NA
Current US CFR Far East
104.25 cents
Forward US CFR Far East
NA
'11-12 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-Oct.)
92.96 cents
**
**August-July average price used in determination of counter-cyclical payment
