USDA's Farm and Foreign Agricultural Services (FFAS) Under Secretary Michael Scuse appeared before the House Agriculture Appropriations Subcommittee to discuss the budget request for Farm Service Agency (FSA), Foreign Agriculture Service (FAS) and Risk Management Agency (RMA). He was joined by the FAS, FSA and RMA Administrators.
For the first time, Natural Resources Conservation Service (NRCS) Chief Jason Weller participated in the FFAS hearing at the request of Subcommittee Chairman Aderholt (R-AL) who explained that he believes the missions of FSA and NRCS intersect and their budgets should be reviewed together.
Subcommittee members focused the majority of their questions on farm bill implementation and questioned Scuse about the Department's proposal to reduce the FSA non-federal workforce by 815 positions and to close 250 FSA offices. Scuse explained that the plans for consolidation would be carefully reviewed after the new farm bill is implemented but that FSA has to find ways to deliver quality service with fewer offices and personnel.
Chairman Aderholt asked Scuse about the status of the MIDAS program because it is behind schedule and over budget and yet seems to be the platform that FSA is counting on to deliver future service. Scuse said MIDAS is the platform that will unify all FSA records and that progress is being made.
In response to a question by Rep. Nunnelee (R-MS), Scuse said acreage reporting has been streamlined to eliminate duplication. He also explained that FSA, RMA, NASS and NRCS have agreed to use a common land identifier. In response to a question from Rep. Nunnelee about improper payments, Scuse said RMA has established a target of no more than 4% in improper payments and has hired a consultant to assist in achieving that target.
Rep. Bishop (D-GA) told Scuse he is aware of complaints from a group of North Florida peanut growers about the peanut reference price and generic base and that his growers do not share those concerns. He urged Scuse to implement the peanut program and generic base consistent with the farm law and entered in the record a letter from the peanut industry to that effect.
In response to questions about the caps on insurance agents' commissions included in the last Standard Reinsurance Agreement (SRA) and the adverse impact particularly on agents who sell specialty crop policies, RMA Administrator Brandon Willis said the next SRA could be negotiated as early as '16 but the Secretary has instructed the agency to implement the farm law before moving to SRA negotiations.
Responding to more questions and concerns about office closures, FSA Administrator Juan Garcia said no decisions have been made and that the provisions of the '08 farm law governing office closures and consolidations are still in effect. He said the plans would be based on a number of criteria including distance between offices and workloads.
Chairman Aderholt noted that the farm law includes $175 million for implementation and asked Secretary Scuse to provide a quarterly report to the Subcommittee detailing expenditures.
Senate Panel Approves EXPIRE Act
The Senate Finance Committee approved the EXPIRE Act by voice-vote. The measure temporarily extends for two years a number of expiring tax provisions. Included in the package are provisions extending Sec. 179 expensing provisions and bonus depreciation.
Without the extension provided in the EXPIRE Act for taxable years beginning in '14 and thereafter, a taxpayer could immediately expense only up to $25,000 of Section 179 property annually, with a dollar for dollar phase-out of the maximum deductible amount for purchases in excess of $200,000.
The EXPIRE Act provisions would restore the maximum amount and phase-out threshold in '14 to the levels in effect in '13 -- $500,000 and $2 million, respectively. The bill also extends 50% bonus depreciation to qualified property purchased and placed in service before Jan. 1, '16.
With Finance Committee approval, the legislation now can move to the Senate floor.
The House is on a more deliberate schedule. Ways and Means Committee Chairman Camp (R-MI) wants to review all the expired tax provisions with the goal of making some provisions permanent and letting the remainder expire. He also scheduled a Committee hearing on business-related tax extenders. He has expressed support for making some provisions permanent including Section 179 expensing, bonus depreciation and the tax credit for research and experimentation.
The NCC joined other members of the Ag tax coalition in urging extension of Sec. 179 and bonus depreciation.
CFTC Reauthorization Bill Considered
The House Committee on Agriculture held a business meeting to consider the Customer Protection and End-User Relief Act (H.R. 4413), a bipartisan bill reauthorizing the Commodity Futures Trading Commission (CFTC). According to Chairman Lucas (R-OK), past events, such as the passage of the Dodd-Frank Act of 2010, the ensuing rulemaking process, and the failures of MF Global and PFG Best, provide important lessons for reauthorization. The bill is intended to increase regulatory and marketing certainty and to improve customer protections.
A day earlier, the Senate Committee on Agriculture approved, by voice vote, President Obama's nomination of Timothy Massad to head the CFTC, and Sharon Bowen and J. Christopher Giancarlo as two new commissioners. The full Senate will vote for final confirmation of the nominees, although the timing is uncertain.
Sen. Chambliss (R-GA) was the sole Agriculture Committee member voting against Bowen citing her relative inexperience for the position. Sens. Vitter (R-LA) and Cochran (R-MS) also oppose Bowen's nomination. Sen. Vitter has said he will place a hold on her nomination, further clouding the confirmation process.
Massad would succeed former CFTC head Gary Gensler, who left the CFTC in early January; Bowen would replace Bart Chilton, who stepped down in March; and Giancarlo would replace Jill Sommers, who announced her resignation in Jan. '13.
USDA Lowers '13 US Cotton Estimate
In its April report, USDA projected 320,000 fewer bales for the '13 US crop, now seen at 12.9 million bales based on USDA's Cotton Ginnings report, released March 25. US mill use and exports were unchanged at 3.60 and 10.70 million bales, respectively. This generates a total '13-14 offtake of 14.3 million bales. Ending stocks for '13-14 are projected to be 2.50 million bales, the smallest stock level since 1951, for an ending stocks-to-use ratio of 17.5%.
USDA released '14-15 projections during its annual Agricultural Outlook Forum. US cotton production was estimated at 16.30 million bales for '14-15 with mill use set at 3.70 million bales and exports reported to increase to 11.00 million bales. The estimated total offtake stands at 14.70 million bales. With beginning stocks of 2.50 million bales, adjusted to reflect April World Agricultural Supply and Demand Estimates (WASDE) projections, this would result in US ending stocks of 4.10 million bales on July 31, '15, and a stocks-to-use ratio of 27.9%.
USDA's April report lowered '13-14 world production estimates by 60,000 bales from the March report to 116.62 million bales. World mill use was raised by 240,000 bales to a projected 109.45 million bales. Consequently, world ending stocks for '13-14 are projected to be 96.92 million bales for a stocks-to-use ratio of 88.6%.
USDA's '14-15 projections released at the Agricultural Outlook Forum puts world production at an estimated 117.00 million bales for the '14-15 crop year. Mill use is set at 113.00 million bales. With beginning stocks of 96.92 million bales, adjusted to reflect April WASDE estimates, the resulting world ending stocks would be 100.92 million bales on July 31, '15, with a corresponding stock-to-use ratio of 89.3%.
NCC Responds to Pollinator Commentary
Dr. Don Parker, the NCC's manager, Integrated Pest Management, submitted a response to "Why Congress Should Care About the Beepocalypse," a commentary that appeared in Roll Call, an online newspaper that covers Capitol Hill.
The Roll Call commentary, which referenced neonicotinoids as a primary culprit into honeybee decline, was authored by Rep. Conyers (D-MI), ranking member of the House Judiciary Committee, and Michael Shank, associate director for legislative affairs at the Friends Committee on National Legislation.
Parker, while noting the NCC's appreciation for the Congressman's concern about the relationship between honeybee colony health and US economic and food security, pointed out in his rebuttal that the EPA: 1) has reviewed many scientific studies in the context of legal use rates and application restrictions; 2) improved pollinator protection label language and increased use restrictions where needed; and 3) continues to rely on sound science that provides agriculture with the ability to protect crops from damaging insect pests that would reduce yield with minimal disruption to the agro-eco system.
On the NCC's website at www.cotton.org/issues/2014/parkbee.cfm, the rebuttal also stated that the NCC "encourages others to recognize pesticides are not the cause of honeybee health decline. Policies directed solely at pesticides will not provide the solution but may have broad unexpected economic impacts on agricultural production."
Ginners Urged to Complete Cost Survey
The National Cotton Ginners' Assoc. urges ginners to complete the recently-distributed 2013 Cost of Ginning Survey.
The cost of ginning cotton is an important concern for producers and ginners, and data from this survey provides information about variable costs as a key part of the overall cost components of ginning cotton. The confidential, triennial survey helps to identify historical trends of gin operation and document the incorporation of new technology to maintain or reduce ginning cost.
Questions regarding the survey should be addressed to Tommy Valco at (662) 686-5255 orThomas.Valco@ars.usda.gov.
T-Shirt Design Contest Proves Popular
Cotton Council International's annual Cotton Day T-shirt contest, which allows aspiring designers to utilize cotton as their medium for expression, garnered more than 1,400 designs from residents in Japan and four other countries.
The judging ceremony for the contest, which kicked off Cotton Day Japan, featured a panel of judges that included consumer and trade media representatives, along with key leaders from the Japan Spinners' Assoc. (JSA) and Cotton Incorporated. JSA will award the winners at the Cotton Day consumer event in Tokyo on May 15.
Cotton Day events across Asia celebrate the planting season for US cotton and feature high-level industry leaders, press interviews and top-tier celebrities.
Sales Slump, Shipments Surge
Net export sales for the week ending on April 3 were -10,500 bales (480-lb.). This brings total '13-14 sales to approximately 9.8 million bales. Total sales at the same point in the '12-13 marketing year were approximately 12.1 million bales. Total new crop ('14-15) sales are 1.4 million bales.
Shipments for the week were 321,100 bales, bringing total exports to date to 7.4 million bales, compared with the 8.8 million bales at the comparable point in the '12-13 marketing year.
Effective April 11-17, ’14
Adjusted World Price, SLM 11/16
71.18 cents
*
Fine Count Adjustment ('12 Crop)
0.37 cents
Fine Count Adjustment ('13 Crop)
0.52 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Special Import Quota (480-lb bales)
834,374
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
91.42 cents
Forward 5 Lowest 3135 CFR Far East
86.89 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
99.90 cents
Forward US CFR Far East
89.65 cents
'13-14 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-Feb.)
76.72 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
