The election did not change which party controls the White House, the House or the Senate but there are changes in the composition of the 113th Congress that will affect the Cotton Belt and key Committees.
As of Nov. 9, Republicans retained control of the House, 234 to 193, with eight races still too close to call. Prior to the election, Republicans held control by 240-190, and there were five vacancies. Several of the "too close to call" contests are in key cotton districts including the North Carolina 7th District where incumbent Rep. McIntyre (D), a senior member of the Agriculture Committee, leads challenger State Sen. Rouzer (R), former agricultural assistant to Sen. Helms, by fewer than 500 votes. In North Carolina's 8th District, Republican Hudson defeated incumbent Rep. Kissell (D). In the newly consolidated 3rd district of Louisiana, two incumbent Republican Reps. -- Boustany (45%) and Landry (30%) -- will face each other in a runoff.In the 4th District of Arkansas, Republican Cotton was elected to fill the seat vacated by the retirement of Rep. Ross (D). In Arizona's 2nd district, Republican challenger McSally holds a narrow lead over incumbent Rep. Barber (D) who is serving the remainder of former Rep. Giffords (D) term. In California, incumbent Republican Reps. Bono-Mack (District 36) and Lungren (District 7) are trailing in races still too close to call.
There will be a number of new members serving districts with significant cotton industry interests, particularly in North Carolina, Texas, Arizona and California where redistricting, the addition of new seats, retirements, and incumbent losses combined to significantly change the make-up of the delegations.
In Texas, where there was significant redistricting as a result of new districts being added, Rep. Canseco (R) was the only incumbent who failed to gain re-election though two members lost their primary bids. Weber (R) defeated former Rep. Lampson (D) for the District 14 seat vacated by Rep. Paul (R). In California's 1st District, LaMalfa (R), a rice farmer, was elected to the seat vacated by Rep. Herger (R) while Valadao (R), a dairyman, was elected to a new seat (District 21) in the San Joaquin Valley.
All Cotton Belt Senators who sought re-election won handily including:Feinstein (D-CA), Nelson (D-FL), Wicker (R-MS), McCaskill (D-MO) and Corker (R-TN). New Cotton Belt Senators are:Kaine (D-VA), Flake (R-AZ), Cruz (R-TX) and Heinrich (D-NM).
Democrats added to their majority in the Senate (55-45) assuming the two "Independents," Sanders (VT) and King (ME), caucus with the Democrats. The Senate Agriculture, Nutrition & Forestry Committee will continue to be chaired by Sen. Stabenow (D-MI), who won re-election in Michigan and the House Agriculture Committee will continue to be chaired by Rep. Lucas (R-OK).
A summary of new House and Senate Members, along with a list of potential chairmen/ranking members of key House and Senate Committees, is at www.cotton.org/issues/2012/upload/12ElectionResults2.pdf. The membership rosters of committees for the 113th Congress will not be final until early '13.
RMA Announces Insurance Harvest Prices
USDA's Risk Management Agency (RMA) announced '12 crop year harvest price options for revenue insurance protection plans.
For Cotton Belt states with a sales closing date of Feb. 28 (AL, AZ, AR, CA, FL, GA, LA, MS, NC, SC, portions of TX) and March 15 (MO, TN, portions of TX, VA), the harvest price of $0.73 is equal to the Oct. average closing value of the Dec. futures contract.
For other commodities grown across the Cotton Belt, harvest prices are as follows: corn harvest price at $7.50/bu for areas with Feb. 28 sales closing date (AZ, CA) and March 15 date (KS, MO, NM, TN, VA); grain sorghum harvest price of $7.31/bu for areas with Feb. 28 sales closing date (AZ, CA, NC) and Mar. 15 date (KS, MO, NM, OK, TN, VA); rice harvest price of $15.00/cwt for areas with Feb. 28 sales closing date (CA, MO, OK, TN); and soybean harvest price of $15.39/bu for areas with Feb. 28 sales closing date (AR, LA, MS, portions of TX) and March 15 date (KS, MO, TN, portions of TX).
Additional information is at www.usda.rma.gov. Through Nov. 5, crop insurance indemnity payments totaled almost $3.6 billion nationwide.
USDA Sees 17.45 Million Bales
In its Nov. crop report, USDA projects a '12-13 US crop of 17.45 million bales, up 160,000 bales from the Oct. report. Upland production was estimated at 16.79 million bales and extra-long staple (ELS) production at 657,000 bales. Harvested area was estimated at 10.44 million acres, implying a non-harvested area of 1.92 million acres based on planted acreage revised from USDA's June Acreage Report. The resulting abandonment rate is roughly 15.51%. The national average yield per harvested acre was estimated to be about 802 pounds, 15 pounds less than the five-year average.
On a regional basis, the Southeast crop is estimated at 5.39 million bales based on harvested acres of 2.73 million and a regional average yield of 948 pounds. In the Mid-South, expected production is 4.07 million bales and harvested area 1.97 million acres with expected yield of 994 pounds per harvested acre. The Southwest upland crop is estimated at 6.10 million bales. Expected harvested area is 5.13 million acres and the regional average yield is 571 pounds. Upland production in the West production is projected to be 1.24 million bales with an estimated harvested area of 386,000 acres and a regional average yield of 1,542 pounds.
The ELS crop is an estimated 657,000 bales. Harvested area is pegged at 237,000 acres with an average yield of 1,328 pounds per harvested acre.
State-by-state detail is provided in the following table.
Source: USDA-NASS November Crop Production Report.
1/ Updated from June Acreage Report.
US Mill Use, Exports Unchanged
In its Nov. report, USDA sees US mill use and exports unchanged from the previous month at 3.40 million bales and 11.60 million bales, respectively. This generates a total '12-13 offtake of 15.00 million bales. Ending stocks for '12-13 are projected at 5.80 million bales for an ending stocks-to-use ratio of 38.7%.
For the '11-12 crop year, USDA has US cotton production at 15.57 million bales. Mill use and exports were unchanged from the Oct. report at 3.30 million bales and 11.71 million bales, respectively. Total offtake for the '11-12 crop year is 15.01 million bales. Ending stocks were 3.35 million bales, giving a stocks-to-use ratio of 22.3% for the '11-12 marketing year.
The USDA Nov. report's '12-13 world production estimate was raised 510,000 bales from the Oct. report to 116.83 million bales. World mill use was lowered 540,000 bales from the Oct. report to a projected 106.33 million bales. Consequently, world ending stocks for '12-13 are projected to be 80.27 million bales for a stocks-to-use ratio of 75.5%.
For the '11-12 marketing year, USDA put world production at 124.28 million bales, up 150,000 bales from the Oct. report. Estimated world mill use was unchanged at 103.17 million. Estimated world ending stocks on July 31, '12 are now estimated at 69.63 million bales. This has a corresponding stocks-to-use ratio of 67.5%.
California Labeling Initiative Defeated
The California statewide ballot initiative Proposition 37 that would have required all food containing genetically modified (GMO) crops to be labeled was defeated by a 53% to 47% vote.
The initiative's proponents were touting it as a "right-to-know" issue, questioning the technology's safety. Opponents, such as farmers, food manufacturers, grocers and seed providers, believed that the label would be used by anti-biotech groups as a warning statement despite the fact that many scientific organizations, including the American Medical Assoc., World Health Organization, National Academy of Sciences, and US Food and Drug Administration (USFDA), have concluded that biotech foods are safe.
Support for Prop. 37 was, at first, widespread but had plummeted as election day approached. A California Business Roundtable/Pepperdine U. poll on Sept. 27 revealed that 66.9% of voters supported Prop. 37. The same poll taken on Oct. 11 had 48.3% of voters backing the initiative and only 39.1% as of Oct. 30.
Nearly every newspaper editorial board in the state came out against Prop 37, not on the grounds of the merit of labeling, but, rather, that the bill was poorly written.
The defeat of Prop 37 is not the end of the drive to require labeling for biotech food products.Supporters of Prop 37 are still claiming victory in that the high-profile campaign in California raised national awareness of GMOs. Other attempts already are underway. Signature gathering is ongoing for a similar ballot initiative in Washington State in Nov. '13 as well as legislative efforts in Connecticut and Vermont.In addition, a petition with more than a million signatures has been filed withthe USFDA to reconsider its long standing policy on labeling. There also will be renewed pressure on President Obama in his second term on this issue.
Post-Patent Genetic Traits Agreement Announced
The US agricultural industry is on the verge of entering uncharted territory – as in '14, when the first genetically engineered trait, Roundup Ready soybeans, will see its patent expire and more will follow with the first cotton trait expiring in '16. These expirations raise questions about 1) a potential generic trait market and, more importantly, 2) whether the plethora of international regulatory approvals will be maintained so that trade is not disrupted.
The Biotechnology Industry Organization (BIO) and the American Seed Trade Assoc. (ASTA) announced and opened for signature their joint Generic Event Marketability and Access Agreement (GEMAA) to deal with biotech patent expiration issues.
GEMAA is a contractually binding agreement among signatories that aims to provide a clear set of procedures to manage patent expiration for the benefit of the entire value chain. Signatories to the agreement would be required to provide notice of patent expiration three years before the last patent on the biotechnology event expires and provide access to the generic event at patent expiration. In addition, the regulatory data owner (patent holder) must either maintain international regulatory responsibility on its own for at least four years after the last sale of the product or either share or transition this responsibility with other users. If no interest is expressed by other signatories for a trait, the owner could discontinue it.
Beginning in '10, BIO and ASTA, along with their respective member companies, engaged a wide range of stakeholders on the patent expiration issue, including grower groups, grain handlers and government officials.
GEMAA is the first of two agreements that will make up "the Accord." In addition to the GEMAA, the BIO-ASTA drafting group continues to work on a Data Use and Compensation Agreement (DUCA) that complements the GEMAA. DUCA will have additional provisions related to structured access to regulatory data and data compensation. DUCA is targeted to be open for signature early next year.
More information about the Accord and the GEMAA signature process is at www.AgAccord.org
Sales Strong, Shipments Steady
Net export sales for the week ending Nov. 1 were 278,900 bales (480-lb). This brings total '12-13 sales to approximately 6.5 million bales. Total sales at the same point in the '11-12 marketing year were approximately 8.9 million bales. Total new crop ('13-14) sales are 280,300 bales.
Shipments for the week were 132,400 bales, bringing total exports to date to 2.1 million bales, compared with the 1.3 million bales at the comparable point in the '11-12 marketing year.
Effective Nov. 9-15, ’12
Adjusted World Price, SLM 11/16
59.98 cents
*
Fine Count Adjustment ('11 Crop)
1.21 cents
Fine Count Adjustment ('12 Crop)
1.41 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Special Import Quota (480-lb bales)
828,260
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
80.23 cents
Forward 5 Lowest 3135 CFR Far East
NA
Coarse Count CFR Far East
NA
Current US CFR Far East
80.95 cents
Forward US CFR Far East
NA
'12-13 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-Sept.)
71.00 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
