USDA Sees 17.65 Million US Bales

US '12-13 Exports, Mill Use Projections Unchanged

NPDES Legal Actions Begin

Improved Endangered Species Consultations Process Proposed

New House Caucus to Review Regulations

Sunbelt Producers View Midwest Agricultural Operations

Sales Rebound, Shipments Slip

In its August report, USDA estimated a '12-13 US crop of 17.65 million bales, 651,000 bales more than the previous month. Upland production was estimated at 16.99 million bales and extra-long staple (ELS) at 663,000 bales. Harvested area was estimated at 10.81 million acres, implying a non-harvested area of 1.83 million acres based on USDA's June acreage report. The resulting abandonment rate is 14.4%. The national average yield per harvested acre was estimated to be 784 pounds, 33 pounds lower than the five-year average.

The Southeast crop is estimated at 4.77 million bales based on 2.65 million harvested acres and a regional average yield of 864 pounds, 75 pounds above the region's five-year average. In the Mid-South, expected production is 3.97 million bales. Harvested area is estimated to be 2.09 million acres and an average yield of 911 pounds per harvested acre. The Southwest upland crop is estimated at 6.98 million bales. Expected harvested area is 5.44 million acres and the regional average yield is 615 pounds, 87 pounds below their five-year average of 702 pounds per harvested acre. West upland production is an estimated 1.28 million bales with estimated harvested area of 394,000 acres and a regional average yield of 1,553 pounds, 86 pounds more than the region's five-year average. The ELS crop is an estimated 663,000 bales. Harvested area is pegged at 233,000 acres with an average yield of 1,363 pounds per harvested acre. State-level estimates are shown in the accompanying tab.

In its August report, USDA sees US '12-13 exports and mill use unchanged from the previous month at 12.10 million and 3.40 million bales, respectively. Projected total offtake of 15.50 million bales results in US ending stocks of 5.50 million bales on July 31, '13, and a stocks-to-use ratio of 35.5%.

For the '11-12 marketing year, USDA estimates US production of 15.57 million bales. Mill use is unchanged from the previous month at 3.30 million bales while exports were raised 110,000 bales to 11.71 million bales. The estimated total offtake now stands at 15.01 million bales, generating ending stocks of 3.30 million bales and a stocks-to-use ratio of 22.0%.

USDA's report estimates world production for the '12-13 marketing year at 114.11 million bales, up 300,000 bales from the July report. World mill use was lowered 820,000 bales to 108.16 million bales. With beginning stocks at 67.80 million bales, this would result in world ending stocks of 74.67 million bales on July 31, '13, and a stocks-to-use ratio of 69.0%.

For the '11-12 marketing year, USDA lowered world production 40,000 bales from the July report to 122.67 million bales. Mill use is estimated at 105.38 million bales, 1.21 million bales lower than the July report. Thus, world ending stocks are estimated to be 67.80 million bales with a 64.3% stocks-to-use ratio.

The first of an expected barrage of legal actions by environmental groups regarding the new pesticide application permits was filed in Massachusetts. The Public Employees for Environmental Responsibility (PEER) asked EPA to investigate whether the Massachusetts Dept. of Public Health (MDPH) violated the Clean Water Act (CWA) when it declared a pest emergency for mosquitos and aerially sprayed more than 400,000 acres in the southeastern part of the state. PEER is charging the state knew well in advance it would have to spray to control Eastern Equine Encephalitis (EEE) but declared an emergency situation to avoid the requirement for a permit. EEE is a rare but serious viral disease spread by mosquitoes that can affect people and horses.

The new National Pollution Discharge Elimination System (NPDES) permit is authorized under the CWA. A '09 court decision required EPA, for the first time ever, to develop permits for pesticide applications over, to, or near waters of the United States, including applications for mosquito control. EPA issued its final general permit in October of last year. The permit includes a provision for emergency situations.

The MDPH reported on July 11 that EEE had been detected in mosquitoes in Massachusetts for the first time in '12. Two of the four positive samples were in a kind of mosquito which feeds on mammals, a point of particular concern to health officials. An agency spokesman said the decision on whether to aerially treat was made in a matter of days based on EEE risk and the plan was executed shortly thereafter.

The NCC and other agricultural groups have opposed these permits on the grounds that pesticides are sufficiently regulated under the Federal Insecticide, Fungicide & Rodenticide Act making the NPDES permits redundant and burdensome while providing no additional environmental benefit. The CWA also allows for citizen suits such as this one.

H.R. 872, which would repeal these permits, was passed in the House in March and by the Senate Agriculture, Nutrition, and Forestry Committee. However, Sens. Boxer (D-CA) and Cardin (D-MD) have prevented any further Senate action on the bill.

On Aug. 3, EPA, USDA, the National Marine Fisheries Service (NMFS) and the US Fish and Wildlife Service (FWS) (the latter two together, "the Services") announced proposed revisions to the Endangered Species Act (ESA) consultation process as it relates to the Federal Insecticide, Fungicide & Rodenticide Act (FIFRA) Registration Review process.

Under FIFRA Section 3(g), EPA is required to review all registered pesticides every 15 years and confirm (based on the available science) that they continue to pose no unreasonable risks to human health, workers or the environment when used according to product labeling. ESA Section 7(a)(2) requires each federal agency to ensure that their proposed action (pesticide registration is considered a federal action) "is not likely to jeopardize the continued existence of any endangered or threatened species." If EPA determines that a pesticide under review may affect a listed threatened or endangered species, EPA is required to engage in a consultation process with the Services to assess the risk and implement risk mitigation measures.

In the past, EPA had assumed that its ESA obligations were satisfied by the extensive risk assessments it required for pesticide registrations. A lawsuit by anti-pesticide groups in the Northwest changed that assumption when the judge ruled that EPA was in violation of the ESA and was required to consult with the Services when registering a pesticide. The consultation process has proved to be too lengthy and inaccurate. The purpose of this current proposal is to facilitate a more streamlined and efficient process.

The proposal's highlights include:

• Emphasis on coordination across federal agencies;
• Expanded role for USDA and the pesticide user community in providing current pesticide use information to inform and refine EPA's ecological risk assessments;
• "Focus" meetings at the start of registration review for each pesticide active ingredient, to clarify current uses and label directions and consider the potential for early risk reduction;
• Formal ESA consultations later in the registration review process, allowing time to engage stakeholders in the development of more refined ecological risk assessments and more focused consultation packages including mitigation for listed species;
• Outreach to potentially affected pesticide users to discuss the technical and economic feasibility of suggested mitigation measures intended to avoid jeopardy to threatened and/or endangered species; and
• Improved coordination between EPA, USDA and the Services.

The proposal is at: www.epa.gov/oppfead1/cb/csb_page/updates/2012/ espp-stakeholder.html. EPA soon will publish a notice in the Federal Register announcing a 60-day public comment period for the proposal.

The bipartisan House Congressional Regulatory Review Caucus held its first meeting on Aug. 1. The Caucus' mission is to review the merits and impacts of a variety of federal regulations on private sector organizations and to educate other Members on this subject.

According to Caucus Co-Chair Scott (R-SC), "There are many valuable regulations that currently exist, such as stable wages, pollution standards, and standards of production for certain goods. Although some regulations are clearly beneficial, the benefits of others are much more opaque and at times hinder economic growth." In a joint statement with Co-Chair Sanchez (D-CA), he stated, "We believe a true bipartisan discussion can be had on where we go from here in fixing the regulatory process."

Since its launch on May 24, the Caucus has drawn eight members in addition to Sanchez and Scott: Reps. Gardner (R-CO), Scalise (R-LA), Stivers (R-OH), Wilson (R-SC), Cardoza (D-CA), Chandler (D-KY),Loebsack (D-IA) and Matheson (D-UT).

At this first Caucus meeting, a panel of industry representatives was invited to discuss a Food and Drug Administration rule governing nutrition labeling on packaged foods. The Caucus plans to review a broad range of regulations, although no details have been made public.

A contingent of 13 Sunbelt farmers observed agricultural operations in North Dakota and Minnesota on Aug. 6-9 as part of the NCC's Multi-Commodity Education Program (MCEP).

The exchange between commodity producer leaders in the Sunbelt and the Midwest/Far West regions is designed to provide the program's participants with: 1) a better understanding of production issues/concerns faced by their peers in another geographic region; and 2) an opportunity to observe agronomic practices, technology utilization, cropping patterns, marketing plans and operational structure. Other program benefits are the continuing dialogue among American farmers, regardless of their crops or locations, and the creation of strong and lasting relationships between this nation's current and future producer leaders. The program, supported by The Cotton Foundation with grants from Deere & Company and Monsanto, is coordinated by NCC's Member Services in cooperation with local organizations and leaders.

The '12 tour's participants produce a variety of commodities including cotton, pistachios, almonds, grapes, alfalfa, corn, peanuts, rice, soybeans, wheat and grain sorghum. They included: Bryan Bone, Bakersfield, CA; Andrew Burleson, New London, NC; Justin Corzine, Stamford, TX; Thad Freeland, Tillar, AR; Bryan Fullingim, Petersburg, TX; Chad Mathis, Arlington, GA; Jimmy Miller, Boaz, AL; Richard Pelzel, Miles, TX; Toby Robertson, Corpus Christi, TX; Robert Royal, Midnight, MS; Hedrick Shoaf, Milan, TN; and Ray Vester, Stuttgart, AR. Also participating were Jeff Nunley, executive director of the South Texas Cotton & Grain Assoc., Victoria; and John Gibson, the NCC's Member Services director, Memphis.

In North Dakota, the tour included stops at the Tharaldson Ethanol facility, Jim Howe's wheat farm in Casselton, a French fried potato processing plant in Jamestown and the John Deere Seeder Plant in Valley City. The group also visited the Northern Crops Institute and its greenhouses at North Dakota State U. in Fargo, the Ag Depot, Inc. and the North Dakota Mill (wheat) in Grand Forks, a potato farm in Larimore, Brad Thykeson's wheat farming operation in Portland and Red River Commodities in Fargo. In nearby Minnesota, the group visited Monsanto's breeding facility in Glyndon and the American Crystal Sugar facility in Moorhead.

Net export sales for the week ending Aug. 2 were 141,100 bales (480-lb). Combined with outstanding sales of approximately 1.3 million bales on July 31 that were carried forward and ’12-13 sales of 3.0 million made in the previous marketing year brings total ’12-13 sales to approximately 4.4 million bales. Total sales at the same point in the ’11-12 marketing year were approximately 7.3 million bales.

Total new crop (’13-14) sales are 154,700 bales.

Shipments for the week were 63,700 bales, bringing total exports to date to 63,700 bales, compared with the 85,700 bales at the comparable point in the ’11-12 marketing year.