As a follow-up to its Stacked Income Protection Plan/Farm Bill workshops, the NCC is hosting four regional information webinars. Each session will include regional examples of insurance rates, county yields and information regarding farm programs.
Two webinars are scheduled for Wednesday, Dec. 17 – one designed for the Southeast region from 9-11 am CST (10 am-noon EST) and one for the Mid-South region from 2-4 pm CST. The two webinars set for Thursday, Dec. 18, are for the Southwest region from 9-11 am CST and for the Western region from noon-2 pm MST (11 am-1 pm PST).
NCC President/CEO Mark Lange said cotton producers, other industry members and agribusiness personnel unable to attend any of the NCC's 25 workshops just completed across the Cotton Belt or those wanting more information are encouraged to participate in one of the webinars.
To participate in the webinars, call the conference number (800-377-8846) and enter the participant code (55634947#) on your phone in order to receive the webinar audio. To view the webinar slides, login at https://cotton.adobeconnect.com/stax/.Once at the web address, the default option is to enter as a guest. Type your name into the box and select the button "Enter Room."If you have any questions, contact the NCC at 901-274-9030.
Senate Still Considering Omnibus Bill
Congress is on track to complete its final business for the year and adjourn until the start of the 114th Congress in early January. The most significant "to do" item is passage of a funding bill for all departments and agencies of the federal government known as the "CROmnibus" (H.R. 83).
The House passed the bill by a vote of 219-206 and the Senate still was considering the measure as of Cotton's Week press time. Because the previous "continuing resolution" funding bill expired on Dec. 11, both the House and Senate passed a two-day bill to keep the government open and allow time for the Senate to complete action on the "CROmnibus." The bill will fund all of the federal government through Sept. 30, '15 except for the Dept. of Homeland Security, which is only funded through the end of February to allow the new Congress an opportunity to try to address the recent executive actions on immigration announced by the President.
The bill includes $147.6 billion in total funding for the USDA and Food & Drug Administration (FDA) portion of the bill for FY15, a $1.93 billion increase compared to the FY14 bill. Of the total funding, $20.6 billion is discretionary and the remainder is mandatory funding. Specifically, the measure includes the following amounts for USDA agencies and programs:
·Animal and Plant Health Inspection Services - $874.5 million, including $11.52 million for the Cotton Pests account and an increase of $740,000 for the Biotechnology Regulatory Services to help clear the backlog of petitions of deregulation for GMO plants;
·Agricultural Research Service - $1.18 billion;
·National Institute of Food and Agriculture - $1.29 billion;
·Market Access Program - $200 million;
·Foreign Market Development Program - $34.5 million;
·Foreign Agricultural Service - $181.4 million;
·Natural Resources Conservation Service for conservation operations - $846.4 million;
·Environmental Quality Incentives Program (EQIP) was decreased $253 million below the mandatory spending level approved in the '14 farm law for FY15 ($1.6 billion);
·Conservation Stewardship Program was decreased 2.259 million acres below the annual acreage cap established in the '14 farm law (10 million acres).
In addition to the funding levels, the overall bill also includes a number of policy related provisions and guidance important to agriculture:
·Report language providing guidance to USDA to operate the marketing assistance loan program in a manner that encourages loan redemptions and minimizes forfeitures to allow the orderly marketing of loan commodities throughout the year.While this is not a change in statute relative to the application of payment limits to the marketing loan program, this does provide an additional opportunity to work with USDA in administering the program in a way that is the least disruptive to the marketing and flow of cotton to market.NCC greatly appreciates the efforts of Sen. Cochran (R-MS) and Reps. Conaway (R-TX) and Lucas (R-OK) in working to make sure this guidance was included.
·Language that requires the Corps of Engineers and the EPA to withdraw their controversial interpretive rule that granted exemptions for certain agricultural practices from the proposed Waters of the United States rule – in addition, the Corps also would be barred from requiring Section 404 permits under the Clean Water Act for already exempted dredge-and-fill activities in irrigation ditches and farm ponds;
·Language that pProhibits the Interior Dept. from listing the greater sage grouse or Gunnison sage grouse under the Endangered Species Act.
·Language that instructs USDA to provide a report to Congress by May '15 on what changes it could make in the mandatory country of origin labeling regulations to come into compliance with the World Trade Organization ruling against the provision.
The bill also prevents the FDA from imposing any new user fees to fund their programs.
The majority of the agriculture programs funded in the bill continue to be subject to sequestration (automatic, across the board reductions) imposed by the Budget Control Act of 2011. For FY15, the sequestration rate for non-exempt programs is 7.3%.
House Passes California Drought Bill
The House passed the California Emergency Drought Relief Act (H.R. 5781) by a bipartisan vote of 230-182. The bill was introduced on Dec. 2 by Rep. Valdao (R-CA) and other members of the California delegation (see Dec. 5 Cotton's Week story).
The bill, if enacted, would help provide immediate emergency drought relief for California by providing operational flexibility for the two California state water projects to address the water supply shortages. The bill is intended to be a temporary solution with its authorization expiring on Sept. 30, '16.
Following passage of H.R. 5781, original co-sponsors Reps. Valadao (R-CA), McCarthy (R-CA), Calvert (R-CA), LaMalfa (R-CA), McClintock (R-CA) and Nunes (R-CA) noted, "Californians are suffering and this bill will provide them with the immediate relief they desperately need. The House of Representatives has recognized the importance of this legislation, not just for California, but for our entire nation. The drought is a natural disaster, and like any other disaster, deserves immediate action."
At this time, the Senate has not scheduled any action on this bill and it appears unlikely to act on the measure before Congress adjourns for the year, in which case the bill would have to be reintroduced next year in the new Congress.
New Committee Members Named
House Committee on Agriculture Chairman-elect Conaway (R-TX) announced the new members for that Committee in the 114th Congress as well as the new subcommittee structure and chairmen.
New Committee members include Cotton Belt Reps: Abraham (R-LA), Allen (R-GA) and Rouzer (R-NC) as well as Reps. Bost (R-IL), Emmer (R-MN), Moolenaar (R-MI), Newhouse (R-WA) and Walorski (R-IN).
Chairman-elect Conaway commented, "I am excited to work with this outstanding group of members joining the Agriculture Committee. Our committee members have diverse backgrounds and unique skills that will be an asset as the committee aggressively oversees an array of issues that are important to all Americans."
He also announced that Rep. Neugebauer (R-TX) will serve as the Committee's vice chairman and he congratulated Rep. Peterson (D-MN) on being selected as the Committee's ranking member.
Beginning in the 114th Congress, Conaway announced the following chairmen of the Agriculture Committee's subcommittees: General Farm Commodities and Risk Management – Rep. Crawford (R-AR); Commodity Exchanges, Energy, and Credit – Scott (R-GA); Livestock and Foreign Agriculture – Rouzer (R-NC); Biotechnology, Horticulture, and Research – Davis (R-IL); Conservation and Forestry – Thompson (R-PA); and Nutrition – Walorski (R-IN).
APHIS Moves Forward on Dicamba Cotton
Text USDA-APHIS Biotechnology Regulatory Services (BRS) posted in the Dec. 12 Federal Register its final Environmental Impact Statement (EIS) for Monsanto’s dicamba-tolerant cotton and soybean varieties (Enlist). This posting initiates a 30-day review period after which the agency will publish its final decision on the deregulation of these varieties.
While the BRS action brings trait deregulation one step closer to completion, this new technology will not be commercially available until EPA issues a label that allows the use of dicamba chemistry over the top of these tolerant varieties. EPA currently is working on endangered species assessments as well as other label details. It is uncertain at this point when the label will be issued. Monsanto has been planning on commercial availability of this trait for the 2015 growing season; however, the delays in regulatory actions put that into question.
Sledge Taylor, ginner; Mike Quinn, cooperative official; John Mitchell, merchant; and Michelle Huffman, NCC economist, who serve as cotton industry representatives on the Agricultural Technical Advisory Committee for Trade in Tobacco, Cotton and Peanuts (which is a panel of industry advisors to USDA), presented a statement regarding the Turkish anti-dumping investigation of US cotton which was accepted by the Committee. The statement noted that the investigation is in retaliation against the United States and thus violated World Trade Organization (WTO) rules. The US government is encouraged to remain engaged and poised to pursue any such violations before the WTO appellate body.
NCC Updates Officials on Turkish Investigation
NCC staff met by conference call with Commerce Dept. staff to share information regarding Turkey's anti-dumping investigation of US cotton.
A demarche was delivered to Turkish authorities on Dec. 4 highlighting potential WTO concerns with the investigation's process and expressing the close attention the US government is focusing on the investigation. Commerce Dept. staff emphasized that in order for Turkey to impose a provisional duty, it must first issue a preliminary determination as to whether dumping occurred, including an assessment of injury to the domestic market. They believe it is unlikely that Turkish authorities could process the questionnaires and publish a preliminary determination that meets WTO muster before January.
NCC staff later met with US State Dept. staff to provide an update on the investigation. Trader questionnaires were due on Dec. 11, '14, and the Turkish General Directorate of Imports of the Ministry of Economy will begin analyzing the industry's responses. A preliminary report may be released upon which provisional duties could be based as soon as January '15.
The NCC soon will be submitting comments for the record opposing such duties, with an additional injury analysis submission by the New Year. NCC staff remains in close communication with US government contacts and Congressional staff to encourage continued strong technical and political engagement between the US government and Turkish authorities.
Also, NCC and Akin Gump representatives met with the chief commercial counsellor at the Turkish embassy to relay concerns about the investigation's impact and about the specter of provisional duties is having on cotton and potential textile trade between the United States and Turkey. The group emphasized 1) the economic damage to Turkish mills that depend on US cotton and 2) the fact that cotton prices around the globe have fallen due to China's growing stockpile of cotton fiber.
CFTC Agricultural Panel Meets
The Commodity Futures Trading Commission (CFTC) Agricultural Advisory Committee met in Washington, DC. The NCC is a Committee member and is represented by Ron Lee, a Georgia cotton producer who attended the session.
The agenda included an update on the state of the agricultural economy by Secretary of Agriculture Tom Vilsack followed by a review and discussion of recent CFTC action regarding agricultural futures markets. Specifically, the Committee discussed position limits, including deliverable supply and bona fide hedging and provided input to the CFTC on estimating deliverable supply and timing issues for re-setting spot month limits.
Prior to this meeting, the CFTC reopened the comment period on position limits and the process for estimating deliverable supplies for setting spot month limits to allow for comments following the meeting. Deadline for comments is Jan. 22.
In addition, the Senate Agriculture, Nutrition & Forestry Committee conducted a hearing entitled, The Commodity Futures Trading Commission: Effective Enforcement and the Future of Derivatives Regulation. CFTC Chairman Timothy Massad testified regarding the budget for the CFTC, the Dodd-Frank Act implementation and regulations, and areas of focus for the agency moving forward. The funding bill currently moving through Congress would fund the CFTC at $250 million for FY15, a $35 million increase from last year.
When questioned by Senators about how the CFTC will determine where to focus its efforts, Chairman Massad noted the agency would receive input from its Agricultural Advisory Committee and Congressional members to help guide their efforts.
'14 US Cotton Crop Estimate Lowered
In its December crop report, USDA estimated a '14-15 US crop of 15.92 million bales, down 480,000 bales from the November report. Upland production was estimated at 15.35 million bales and extra-long staple (ELS) production at 578,000 bales. Harvested area was an estimated 9.88 million acres, implying a non-harvested area of roughly 1.13 million acres based on USDA's latest acreage report. The resulting abandonment rate is 10.25%. The national yield per harvested acre was estimated to be 773 pounds, 46 pounds less than the five-year average.
On a regional basis, the Southeast crop is estimated at 5.12 million bales, based on harvested acres of 2.65 million and a regional average yield of 927 pounds. In the Mid-South, expected production is 3.27 million bales. Harvested area is an estimated 1.42 million acres and the expected yield is 1,104 pounds per harvested acre. The Southwest upland crop is estimated at 6.24 million bales. Expected harvested area is 5.39 million acres and the regional yield 556 pounds. Upland production in the West is an estimated 723,000 bales with an estimated harvested area of 233,000 acres and a regional yield of 1,489 pounds.
The ELS crop is an estimated 578,000 bales. Harvested area is pegged at 189,000 acres with an average yield of 1,465 pounds per harvested acre.
Source: USDA-NASS December Crop Production Report.
1/ Revised from June Acreage Report.
US Exports, Mill Use Unchanged
In its December report, USDA projected '14-15 US mill use and exports unchanged from November at 3.80 million and 10.00 million bales, respectively. This generates a total '14-15 offtake of 13.80 million bales. Ending stocks for '14-15 are projected at 4.60 million bales for an ending stocks-to-use ratio of 33.3%.
The projected '14-15 world production estimate was lowered 630,000 bales from the November report to 118.98 million bales. World mill use was lowered 1.25 million bales from the November report to a projected 112.6 million bales. Consequently, world ending stocks for '14-15 are projected to be 108.08 million bales for a stocks-to-use ratio of 96.0%.
Sales, Shipments Strong
Net export sales for the week ending on Dec. 4 were 206,800 bales (480-lb). This brings total '14-15 sales to approximately 7.2 million bales. Total sales at the same point in the '13-14 marketing year were approximately 7.0 million bales. Total new crop ('15-16) sales are 520,600 bales.
Shipments for the week were 207,200 bales – a marketing-year high – bringing total exports to date to 1.8 million bales compared with the 2.5 million bales at the comparable point in the '13-14 marketing year.
Christmas AWP Announcement Noted
In its Dec. 11 Upland Cotton Announcement, USDA noted a change in the timing of the announcement of the Adjusted World Price (AWP) during Christmas week. With Christmas falling on Thursday and with Friday, Dec. 26 declared a federal holiday, USDA noted that the AWP announcement will be on Wednesday, Dec. 24, at 4 pm ET. This is a one-time occurrence being made in order to account for the federal holidays.
