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October 24, 2014
 

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PAST ISSUES/ARCHIVES
 
Cotton's Week: March 22, 2024
Cotton's Week: March 15, 2024
Cotton's Week: March 8, 2024
Cotton's Week: March 1, 2024
 
 


 
APH Exclusion Implemented For Spring Crops

Agriculture Secretary Tom Vilsack announced the implementation of a new farm law initiative that will provide relief to farmers affected by severe weather, including drought. The Actual Production History (APH) Yield Exclusion, available nationwide for farmers of select crops starting next spring, allows eligible producers who have been hit with severe weather to receive a higher approved yield on their insurance policies through the federal crop insurance program.

Spring crops eligible for APH Yield Exclusion include cotton, corn, soybeans, wheat, grain sorghum, rice, barley, canola, sunflowers, peanuts and popcorn. Nearly three-fourths of all acres and liability in the federal crop insurance program will be covered under APH Yield Exclusion.

USDA said in its news release that its Risk Management Agency (RMA) and Farm Service Agency staff worked hard to implement several '14 farm law programs ahead of schedule, such as the Agricultural Risk Coverage (ARC), Price Loss Coverage (PLC), Supplemental Coverage Option and Stacked Income Protection Plan. USDA is now able to leverage data from the ARC and PLC to extract the information needed to implement the APH Yield Exclusion earlier than expected.

"Key programs launched or extended as part of the 2014 Farm Bill are essential to USDA's commitment to help rural communities grow," Vilsack said. "These efforts give farmers, ranchers and their families better security as they work to ensure Americans have safe and affordable food. By getting other 2014 Farm Bill programs implemented efficiently, we are now able to offer yield exclusion for spring 2015 crops, providing relief to farmers impacted by severe weather."

The APH Yield Exclusion allows farmers the possible opportunity to exclude yields in exceptionally bad years from their production history when calculating yields used to establish their crop insurance coverage. The insurance coverage level available to a farmer is based on the farmer's average recent yields. Under the new farm law program, yields can be excluded from farm actual production history when the county average yield for that crop year is at least 50% below the 10 previous consecutive crop years' average yield. RMA will provide additional program details in December.

Producers are encouraged to work with their crop insurance agent to determine the coverage that best meets their risk management needs. A crop insurance agent in their area can be found at: www.rma.usda.gov/tools/agent.html.

In response to the APH announcement, the NCC issued a statement commending RMA for implementing a farm law provision important to cotton production areas that have been hit with drought and other adverse weather in recent years.

NCC Chairman Wally Darneille said, "Many producers across the Cotton Belt have incurred yield losses due to severe weather, particularly the past three years. This will greatly assist our producer members who are already making plans for next season."

Darneille also noted that the announcement was another example of the excellent work by RMA in addressing the tremendous challenge of implementing provisions of the new farm law, which include STAX for cotton, the Supplemental Coverage Option and a host of other provisions.

 
NCC Distributes Payment Limits Summary

The NCC is distributing a summary of the payment limit provisions included in the '14 farm law.

The new farm legislation imposes a $125,000 limit on benefits received through marketing loan gains and loan deficiency payments, as well payments from the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for all commodities (except peanuts which are covered by a separate $125,000 limit). The document is to serve as a reminder that the application of the limit to marketing loan benefits is a new feature in the '14 law and one that creates significant risk and uncertainty for all participants in the marketing chain.

The summary report is the result of ongoing efforts by a NCC Payment Limit Working Group comprised of producers, ginners, marketing cooperatives and private merchants. The Working Group is coordinating with USDA to develop reporting and tracking systems that will seek to 1) provide equitable treatment for all modes of marketing and 2) minimize cotton flow disruptions.

The summary is in the NCC website's members only issues area at www.cotton.org/issues/members/loader.cfm?csModule=security/getfile&PageID=157341.

 
Anti-Dumping Investigation Launched

The Turkish Ministry of Economy announced on Oct. 18 that it is investigating the imports of US cotton to determine if "dumping" is occurring in the Turkish market.

The investigation's results could be the application of anti-dumping (AD) duties to the imports of US cotton for a period of up to five years. To impose an AD duty, Turkish officials must make three affirmative decisions: (1) determine that dumping has occurred, which could be established by determining that US sales of cotton to Turkey were at lower values than US sales to domestic mills or US sales to other countries; (2) determine that the Turkish cotton industry has been injured; and (3) determine that the injury was caused by imports of US cotton.

As an initial step in the investigation, US merchandisers have received very detailed questionnaires from the Turkish government requesting information on sales of cotton to Turkish mills, US mills and mills in other countries. US companies have been given 37 days to respond to the questionnaire.

Several cotton industry representatives participated in a conference call with US government officials to hear an update on the investigation's status and an overview of the expected process. US officials strongly encouraged US companies to respond to the questionnaire because failure to do so would be viewed as being non-cooperative by Turkish officials and could result in AD duties being applied to imports from that company.

NCC staff, working with staff of the American Cotton Shippers Assoc. and AMCOT, developed a summary of the investigation and expected next steps. The summary is being distributed to merchandizing firms and also is in the NCC website's members only issue area at www.cotton.org/issues/members/loader.cfm?csModule=security/getfile&PageID=157304.

 
Port Worker Labor Agreement Urged

The NCC as well as over 100 local, state and national trade associations cosigned a letter to the heads of both the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Assoc. (PMA) – urging a swift conclusion on a new labor agreement. Both parties were asked to recognize that time is of the essence and encouraged to stay the course, complete the contract negotiations as soon as possible and work to resolve the current congestion issues without further interrupting the flow of commerce.

The groups representing manufacturers, farmers and agribusinesses, wholesalers, retailers, importers, exporters, distributors and transportation/logistics providers noted in the letter that many US and Canadian stakeholders represented by these sectors already are experiencing severe negative effects of delayed shipments. Concern was expressed that there has been no visible progress in the negotiations since August, when the ILWU and PMA announced a "tentative deal" on health benefits.

 
WTO Rules Against Labeling Law

A World Trade Organization (WTO) panel released its ruling that the US Country of Origin Labeling (COOL) provision for beef and pork implemented by USDA is in violation of global trade rules. The case against the United States, brought by Canada and Mexico, is in response to the most recent changes made to COOL in an attempt to come into compliance with an earlier WTO ruling against the COOL provisions first approved under the '02 farm law, and then amended by the '08 farm law.

Both Canada and Mexico have indicated their intention to retaliate against a broad list of US imports to those countries by increasing tariffs if the COOL provisions are not modified. Canada already has released its initial list of products and Mexico is expected to issue its product list in the near future.

According to press reports, the US Trade Representative's office has indicated it is considering an appeal of the ruling, thus potentially delaying any final action in the case until at least mid-'15. Meanwhile, there continue to be calls for either legislative or regulatory action to modify or eliminate the COOL provisions.

 
EPA Sued Again For 2,4-D Registration

A coalition led by the Center for Food Safety and Earthjustice has filed a legal challenge to EPA's registration of Dow AgroScience's Enlist Duo, a new 2,4-D and glyphosate mix for use on Dow's genetically engineered corn and soybean varieties. The groups are claiming that EPA was deficient in its assessment of the risks posed by the herbicide to human health and endangered species.

In their petition filed in the US Court of Appeals for the Ninth Circuit, the groups are asking the court to set aside the final order of the EPA granting unconditional registration of Enlist Duo and to find that EPA violated its responsibilities under the Endangered Species Act by failing to consult with federal wildlife services on the potential effect of the herbicide on species.

The petition is the second court challenge to the agency's approval of Enlist Duo. The Natural Resources Defense Council filed suit in the US Court of Appeals for the DC Circuit on Oct. 15, the same day EPA announced its registration decision. The Natural Resources Defense Council is claiming that the herbicide poses risks to human health and monarch butterflies.

 
Pesticide Drift Reduction Program Launched

EPA announced a new voluntary Drift Reduction Technology (DRT) program to encourage the use of verified, safer application products to reduce exposure and pesticide movement while saving farmers money in pesticide loss.

It is estimated that up to 10% agricultural pesticide sprays may move off target, amounting to about 70 million pounds of pesticides valued up to $640 million being lost to drift annually. Farmers have long been concerned about reducing pesticide product loss during and after application to crops and minimizing drift to neighbors.

DRT is a voluntary program that encourages manufacturers to test their technologies (such as nozzles, spray shields and drift reduction chemicals) for drift reduction potential. EPA encourages pesticide manufacturers to label their products for use with DRT technologies. The four DRT ratings represented by one, two, three or four stars are awarded for technologies that demonstrate at least 25% reduction in potential spray drift compared to the standard.

Spray technology manufacturers interested in participating in EPA's DRT program may now submit data verifying their technology reduces pesticide movement. EPA will evaluate each data submission and, if appropriate, assign a drift-reduction star rating to the product based on its ability to reduce spray drift. EPA will post these ratings at: www2.epa.gov/reducing-pesticide-drift, where more DRT Program information is available.

Over time, the program will move the agricultural sector toward the widespread use of low-drift technologies, and drift-reduction ratings could appear on pesticide labels as early as fall '15.

 
Vietnam Sourcing Fair Yields Sales

Cotton Council International's (CCI) two-day COTTON USA Sourcing Fair in Hanoi, Vietnam, resulted in sales between buyers and sellers of US cotton-rich fabrics and garments. This private trade fair included 12 spinning mills from the ASEAN region, 17 brands/retailers, and 20 garment factories.

CCI arranged 938 meetings between the buyers and sellers of US cotton-rich fabrics and garments. CCI's initial evaluation indicated two confirmed sample orders written on site, with expectations of future new business. A wide variety of participants representing companies in the United States, Europe, Japan and Thailand were recruited to join the supply chain event.

Mark Dries, counselor for Agricultural Affairs at the US Embassy in Hanoi, welcomed the group. Will Bettendorf, CCI's director for Supply Chain Marketing, reported on the US and world raw cotton situation. Dej Pathanasethpong, president of Thong Thai Textile Co. and former president of the Thai Garment Manufacturers' Assoc, reported on the ASEAN textile and garment industries. Dang Phuong Dung, vice chairman/secretary general of the Vietnamese Textile and Garment Assoc., described the local textile and garment industry. Brands and retailers visited garment factories in the Hanoi area to better understand the Vietnamese garment manufacturing sector's capacity and variety.

Twelve COTTON USA Sourcing member mills participated: Apac Inti Corpora, Argo Pantes, Dan Liris, Fashion Alliance, Grand Textile, LVW Textile, Nan Yang Textile, Natatex, Pangrim Neotex, People's Garment, Phong Phu and Tyfountex. Also attending were 17 brands and retailers: Aeon Topvalu, Blue Corner, Carhartt, Cecil, CMG - John Henry, Columbia Sportswear, El Corte Ingles, JCPenney, Li & Fung, MGF Sourcing (formerly Mast), OBS Gruppo Coin, Quicksilver, Ralph Lauren, Rifle, Stefanel, Street One and Target.

In addition, 20 garment manufacturers participated: Apac Garments, Dap Cau Garment, Garment 10, Ha Noi Textile & Garment, Ha Phong Export Garment, Hansae, Knit Textiles, Kwanglim "KL Texwell," May Hai, Michelle, International, Minh Tri, Sae-A "Eins Vina," Shinsung Tongsang (SSTS), Shinwon Ebenezer Vietnam, Song Hong Garments, SP Brother, T.K. Garment, Theparerg, Thong Thai Textile and Tyfountex Garments.

 
Sales, Shipments Steady

Net export sales for the week ending on Oct. 16 were 86,000 bales (480-lb). This brings total '14-15 sales to approximately 5.9 million bales. Total sales at the same point in the '13-14 marketing year were approximately 4.4 million bales. Total new crop ('15-16) sales are 489,800 bales.

Shipments for the week were 102,100 bales, bringing total exports to date to 1.1 million bales, compared with the 1.6 million bales at the comparable point in the '13-14 marketing year.

 

 
Effective Oct. 24-30, ’14

Adjusted World Price, SLM 11/16

 49.30 cents

*

Fine Count Adjustment ('13 Crop)

0.19 cents


Fine Count Adjustment ('14 Crop)

 0.09 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 2.70 cents


Import Quotas Open

13

 
Special Import Quota (480-lb bales)

880,211


ELS Payment Rate

0.00 cents


*No Adjustment Made Under Step I

 
Five-Day Average

Current 5 Lowest 3135 CFR Far East

68.99 cents


Forward 5 Lowest 3135 CFR Far East

NA


Coarse Count CFR Far East

NA


Current US CFR Far East

72.60 cents


Forward US CFR Far East

NA


 

'13-14 Weighted Marketing-Year Average Farm Price  
Final Marketing Year Average Price

77.90  cents