With the Senate floor action and House Agriculture Committee mark-up expected in June, three separate farm bill reports were released.
A report sponsored by the American Enterprise Institute focused on the potential government spending under shallow-loss revenue programs such as the Agriculture Risk Coverage (ARC) program in the Senate Agriculture, Nutrition & Forestry Committee's farm bill package. The Food and Agricultural Policy Research Institute (FAPRI) at the U. of Missouri also released a report analyzing the ARC program and cotton's Stacked Income Protection Plan (STAX) in the Senate package. However, the FAPRI report did not include the Supplemental Coverage Option in their analysis.
In another farm bill-related report, the Environmental Working Group (EWG) released their analysis of data on the amount of insurance premium subsidies attributed to purchases of crop insurance products. The EWG report highlighted 26 farms that through the purchases of insurance are attributed more than $1 million in premium subsidies. Many of those farms were involved in specialty crop production. In response, a statement by crop insurance industry groups questioned EWG's analysis and characterization of the data.
NCC staff continues to review the reports and will convey any concerns to Congressional staff and Administration officials as the farm bill process moves forward.
3.9 Million CRP Acres Being Accepted
Secretary of Agriculture Vilsack announced that USDA will accept 3.9 million acres offered under the 43rd Conservation Reserve Program (CRP) general sign-up.
During the extended five-week signup, USDA received nearly 48,000 offers on more than 4.5 million acres of land, demonstrating the CRP's continued successful voluntary efforts to conserve land and improve this nation's soil, water, air and wildlife habitat resources. USDA now has enrolled nearly 12 million acres in the CRP since '09. Currently, there are more than 29.6 million acres enrolled on more than 736,000 contracts.
Enrollment of the new 3.9 million acres will allow USDA to continue important targeting of CRP acres through continuous sign-up initiatives—including those announced earlier this year for highly erodible land, as well as grasslands and wetlands—while also maintaining and enhancing the significant benefits that the program already has achieved. The two continuous sign-ups announced earlier this year will target an additional 1.75 million acres in total.
For the first continuous sign-up program, USDA encourages landowners with land that has an Erosion Index (EI) of 20 or greater to consider participating in the Highly Erodible Land initiative. Lands eligible for this program are typically the least productive land on the farm. In many cases, the most cost-effective option to reduce erosion is to put the land into a wildlife friendly cover, which will improve habitat and reduce sediment and nutrient runoff and reduce wind erosion.
For the second continuous sign-up program, landowners with sensitive grasslands, wetlands and wildlife habitat are encouraged to participate. The grasslands and wetlands initiative increases acres set aside for specific enrollments that benefit duck nesting habitat, upland birds, wetlands and wildlife, and provides benefits for specific conservation practices, including new benefits for pollinator practices.
CRP is a voluntary program designed to help farmers, ranchers and other agricultural producers protect their environmentally sensitive land. Eligible landowners receive annual rental payments and cost-share assistance to establish long-term, resource conserving covers on eligible farmland throughout the duration of 10 to 15 year contracts.
Office Consolidation Plan Proceeds
USDA announced that it will close and consolidate 125 of the 131 Farm Service Agency (FSA) county offices proposed in January, saying that "Under the Blueprint for Stronger Service, USDA is modernizing and accelerating service delivery while improving the customer experience through use of innovative technologies and business solutions. The Blueprint included USDA's plan to close or consolidate 259 domestic offices including the FSA offices, additional facilities and labs, and seven foreign offices."
According to the announcement, the Department followed the requirements in the '08 farm law under which Congress specified a procedure for FSA office consolidations. Two sets of criteria were used to identify FSA offices for consolidation. The offices identified for consolidation met one of two criteria: (1) offices with two or fewer permanent, full-time employees located less than 20 miles from another office or (2) offices with no permanent employees regardless of location.
Following the announcement of the office locations subject to consolidation, public hearings were held in every county affected by the proposals and the comments from these meetings were reviewed before Congress was notified on Feb. 27. During the following 90-day Congressional notification period, the Department reviewed data and public comments received and determined that six of the original 131 proposed offices did not meet the '08 farm bill criteria for consolidation and were not included in the final action.
FSA will allow affected farmers to choose the county office for their future business. All employees affected by an office closing will be provided an opportunity to continue working for FSA.
The six county offices originally selected for closure that will continue to operate are: Lafayette County, AR; Boulder County, CO.; St. Mary Parish, LA.; Pamlico County, NC; Mayes County, OK.; and York County, SC. A complete list of FSA county offices subject to consolidation is available at USDA's website.
In its fourth plenary meeting in Washington, DC, USDA's Advisory Committee on Biotechnology and 21st Century Agriculture (AC21) continued discussions on coexistence of modern agricultural practices including conventional, biotechnology and organic farming methods. The committee was originally established in '03 and, under its charter, is charged providing guidance to USDA on pressing individual issues, identified by the Office of the Secretary, related to the application of biotechnology in agriculture.
Agriculture Secretary Vilsack revived the committee last year to discuss the basic question of whether organic growers should receive financial compensation for pollen drift from genetically engineered (GE) crops. The specific questions charged to the committee are:
1.What types of compensation mechanisms, if any, would be appropriate to address economic losses by farmers in which the value of their crops is reduced by unintended presence of GE material(s)?
2.What would be the eligibility standard for a loss and what tools and triggers (e.g. tolerances, testing protocols, etc.) would be needed to verify and measure such losses and determine if claims are compensable?
3.In addition to the above, what other actions would be appropriate to bolster or facilitate coexistence among different agricultural production systems in the United States?
The current AC21 membership is split about evenly among organic and conventional/biotech interests, and discussions have been lively. Although there has been consensus on some issues such as education and outreach, community cooperation, and mitigation, there are major contentions on the basic concerns. The non-organic members insist that there must be some compelling documentation of such economic losses while the organic faction wants to discuss the mechanisms for compensation.
The AC21 Chairman, Dr. Russell Redding, dean of Agriculture and Environmental Sciences, Delaware Valley College, is planning to have a draft report circulated to the committee members by July 30 in time for input for the next plenary meeting on Aug. 27-28. He hopes to complete the report for submission to the Secretary this fall.
USDA Announces MAP Improvements
USDA's Foreign Agricultural Service (FAS) announced changes to the regulations governing the Market Access Program (MAP) that will clarify and streamline program requirements in areas ranging from application procedures to project evaluations. The changes to MAP are part of USDA's Blueprint for Stronger Service.
The MAP helps US producers, exporters, private companies and non-profit trade organizations finance activities to market and promote US agricultural commodities and products internationally. When MAP funds are used for generic marketing and promotion activities, participants must contribute a minimum 10% match for MAP funds. For branded promotions, a dollar-for-dollar match is required.
Changes made to improve the efficiency and effectiveness of MAP include:
Streamlining application and planning requirements under FAS' Unified Export Strategy;
Specifying the types of activities eligible for reimbursement under the program;
Documenting operational procedures for MAP projects promoting branded products;
Requiring program participants to establish fraud prevention programs; and
Revising processes for evaluation, contracting, compliance review and appeals.
In developing the revised regulations, FAS reviewed nearly 1,300 public comments submitted in response to a proposed rule issued on Sept. 8, '09. The resulting improvements will help FAS streamline and improve MAP delivery.
US Cotton Celebrated in Asia
The recent Cotton Council International (CCI) and Cotton Incorporated annual "Cotton Day" celebrations throughout Asia were the most successful to date, with about 1,000 industry representatives in attendance and more than $10 million in earned advertising value. The events in Thailand, Taiwan, Korea and Japan highlighted US cotton and featured industry leaders, media interviews and celebrities.
Cotton Day Thailand kicked off CCI's Teddy Bear Ambassador Campaign, enlisting COTTON USA licensees and 27 brands. Participating brands will display 5,000 bears, made with 100% US cotton materials donated by local mills, at retail stores throughout Bangkok. The US Ambassador to Thailand spoke at the event and wore a 100% US cotton dress.
Cotton Day Taiwan featured a TV commercial launch by singer-songwriter Fan Fan and a sold-out concert for the performer SHOW. More than 30 television outlets reported the event.
Cotton Day Korea enlisted a top designer and celebrity to display "Cotton Contemporary," a vision of cotton as high fashion on the runway. That event also included a fashion show featuring three brands. Media coverage of the event is expected to achieve several million in US dollar equivalent value. In addition, the US Ambassador to the Republic of Korea hosted a dinner for top Korean executives and the CCI/Cotton Incorporated delegation.
Cotton Day Japan featured three celebrities who received awards for their contributions to cotton promotion. In addition, Miwa, CCI Japan's spokesperson, sang her newest single "Cotton Season" for more than 250 industry members in attendance.
W. Hemisphere Textile Executives Touring Cotton Belt
Spinners and manufacturers from five W. Hemisphere countries will tour the US Cotton Belt on June 9-16 to get a closer look at US cotton production, processing and marketing and to meet with US exporters. The 22 tour participants represent companies in Colombia, Peru, Ecuador, El Salvador and Mexico – markets that are among the top 20 in the world. The firms these textile executives represent are expecting to consume about 925,000 bales in the '11/12 marketing year of which about 756,000 bales will be US cotton.
"This tour will provide a great opportunity for our industry to showcase U.S. cotton's advantages, to cultivate important business relationships and to sell our product," said James L. "Jimmy" Webb, a Georgia cotton producer and president of Cotton Council International (CCI), which sponsors the trade mission. "We want these manufacturers to see firsthand that our ability to reliably supply quality fiber in the world marketplace is unparalleled."
Following a CCI briefing, the delegation will participate in an ICE Futures seminar; visit a farm and gin in California's San Joaquin Valley; observe cotton research in North Carolina, and tour the USDA cotton classing office in Bartlett, TN. They will meet with exporters in the four major Cotton Belt regions along with the following industry organizations: NCC, American Cotton Producers, Cotton Incorporated, American Cotton Shippers Assoc., Southern Cotton Growers Assoc., Texas Cotton Assoc., Plains Cotton Growers Assoc., Lubbock Cotton Exchange, AMCOT, Western Cotton Shippers Assoc., San Joaquin Valley Quality Cotton Growers Assoc. and Supima.
This and all COTTON USA Special Trade Missions seek to enhance trading ties between the US cotton industry and key overseas textile manufacturing customers – with an overall goal ofhelping US cotton capture additional market share.
Sales Steady, Shipments Strong
Net export sales for the week ending May 24 were 127,900 bales (480-lb). This brings total '11-12 sales to approximately 12.5 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.6 million bales. Total new crop ('12-13) sales are 1.6 million bales.
Shipments for the week were 393,000 bales, bringing total exports to date to 9.6 million bales, compared with the 12.7 million bales at the comparable point in the '10-11 marketing year.
Effective June 1-7, ’12
Adjusted World Price, SLM 11/16
62.52 cents
*
Fine Count Adjustment ('11 Crop)
0.48 cents
Fine Count Adjustment ('12 Crop)
0.68 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Special Import Quota (480-lb bales)
871,389
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
82.52 cents
Forward 5 Lowest 3135 CFR Far East
82.02 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
84.60 cents
Forward US CFR Far East
80.95 cents
'11-12 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-April)
91.13 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
