Producers wanting to sign up for the Stacked Income Protection Plan for Upland Cotton (STAX) and the Supplemental Coverage Option (SCO) must do so before the sales closing dates for eligible '15 spring crops. The sales closing dates may be as early as Jan. 31, '15, for certain crops and counties. However, the sales closing date for the majority of spring crops is March 15, '15.
STAX is an area-based revenue policy that is only available for upland cotton beginning with the '15 crop year. It may be purchased as a stand-alone policy or as an endorsement to an underlying multi-peril crop insurance policy. SCO is a county-level policy endorsement that covers a portion of the producer's deductible of their underlying multi-peril crop insurance policy. SCO is available for corn, cotton, grain sorghum, rice, soybeans, spring barley, spring wheat and winter wheat in select counties for the '15 crop year.
Producers wanting to learn how STAX and SCO can help them manage risk can find maps showing '15 crop year availability, fact sheets, frequently asked questions, policy information and more at the Risk Management Agency (RMA) farm bill site,www.rma.usda.gov/news/currentissues/farmbill/index.html.
To help farmers better understand how STAX and SCO interact with traditional crop insurance, RMA developed an online Crop Insurance Decision Tool, which also is available for use on smartphones. This user-friendly resource, at http://prodwebnlb.rma.usda.gov/apps/CIDT/, and available as a free download from the Apple iTunes store and Google Play store, demonstrates how the STAX and SCO plans work, including how coverage is determined, when insurance indemnity payments are triggered, approximate premium costs, and how STAX and SCO interact with an underlying multi-peril crop insurance policy. The online tool and the mobile application can help producers quickly explore and understand the variety of coverage options that these new products offer. Producers must consult their crop insurance agent for detailed information and to obtain a specific premium quote.
NCC Submits CSP Comments
The NCC submitted detailed comments on the Interim Rule for the Conservation Stewardship Program (CSP). The NCC's comments noted, "The CSP has been utilized extensively across the Cotton Belt and we expect this utilization to continue in the redesigned program throughout Sunbelt agriculture. Furthermore, we would expect an increase in participation if there are corrections to certain aspects of the regulations that discourage participation by larger farming operations."
In addition, the NCC asked NRCS to offer an expanded array of enhancements that could be implemented by participating producers; as well as asking that specific priority resources of concern be identified by State Technical Committees.
The NCC's comments conveyed strong opposition to the payment limits of $200,000 per contact included in the Interim Rule which the NCC believes are inconsistent with statute; however, it was noted that if the NRCS limits are included in the final rule, it is paramount that the $400,000 for joint operations be included.
State of Union Focus On Trade, Taxes
In President Obama's state of the union address, he offered specific comments on the Administration's pursuit to gain trade promotion authority (TPA) from Congress this year in an effort to allow the Trans Pacific Partnership negotiations to be concluded. TPA or "fast track authority" allows trade agreements to be presented to Congress for an up or down vote without opportunity for amendments.
While a large majority of Republicans in the House and Senate are expected to support TPA, there appears to be few Democrats currently willing to support TPA, meaning the Administration will have to ramp up its lobbying efforts to build more support among House and Senate Democrats. The chairmen of both the Senate Finance Committee and House Ways and Means Committee have indicated they may introduce a TPA bill in the very near future and move the bill through their committees, preparing it for floor action once there is sufficient support for passage.
The President also outlined his ideas for potential tax reforms and modifications, some of which could have implications for family farms and agriculture. These include limiting the ability of assets transferred from one generation to the next to receive a "stepped up" basis (value of asset at the time acquired is used to determine amount of gain at time of sale) and increasing the top capital gains tax rate to 28%.
Given the Republican majority in Congress, it is unlikely that these tax policy changes designed to raise revenue will move forward in the current Congress. There still is significant debate over whether this Congress will attempt any effort at tax reform.
Comments Filed On CFTC Proposal
The NCC, along with AMCOT and the American Cotton Shippers Assoc., filed comments with the Commodity Futures Trading Commission (CFTC) in response to a proposal to impose position limits on market participants in commodities markets. The comments, on the NCC's website at www.cotton.org/issues/2015/upload/15cftccommentsjan22.pdf, support CFTC's efforts to limit excessive speculation to help preserve market integrity.
There are concerns with the proposed interpretation of the bona fide hedging definition, which is too restrictive, and as a result, could limit true bona fide hedging by commercial enterprises. The comments urge flexibility when defining bona fide hedging activities so that the buyers and sellers of physical cotton on each end of the supply chain who want a fixed price for the physical commodity will not be harmed, which could happen if traditional commercial market risk management practices are restricted for those in the middle of the chain. Hedge exemptions should continue to be granted to bona fide hedgers for hedging commercial risks.
The comment period, which is now closed, is part of the CFTC's ongoing implementation efforts of the Dodd-Frank legislation passed by Congress in '10 in response to the financial crisis several years ago.
More Committee, Leadership Announcements Made
Rep. Peterson (D-MN), ranking member of the House Agriculture Committee, announced the complete list of 19 Democrats on that panel for the 114th Congress. The list is at http://democrats.agriculture.house.gov/press/PRArticle.aspx?NewsID=1215. Six of these are newly-elected Members or new to the Committee, and include three Cotton Belt Members – Reps. Kirkpatrick (AZ), Graham (FL) and Adams (NC).
The Senate Finance Committee announced that Sen. Cornyn (R-TX) will serve as chairman of the Subcommittee on International Trade, Customs, and Global Competitiveness. This role will place him at the forefront of the ongoing trade negotiations and the effort in Congress to pass trade promotion authority.
EPA Agriculture Advisory Committee Convenes
EPA's Farm, Ranch and Rural Communities Federal Advisory Committee (FRRCC) met at EPA's facilities in Arlington, VA, after being dormant for two years. The charge to the committee from the EPA Administrator was to consider soil health particularly as it relates to severe weather events and to environmental issues such as water and air quality.
Patrick Johnson, Jr., a Tunica, MS, cotton producer, is a Committee member representing the cotton industry. He is a NCC delegate and member of NCC's Environmental Task Force.
On the meeting's first day, the Committee heard presentations from various experts on soil health focusing on the role of organic matter in improving soils' water holding capacity and water penetration. The second day was largely concerned with discussion on the FRRCC's work plan. According to Johnson, "It was a peculiar meeting in that many of the Committee members, including myself, were puzzled by the topic. EPA has no legal authority over soils and USDA is the more suitable agency to take on this issue."
During the final half hour of the meeting, Committee members finally expressed their concerns about the topic. They cited EPA's lack of jurisdiction, USDA's existing capacities to address the issue and its relationship to the agriculture community, and the perception among farmers as to EPA's motives.
Ron Carleson, the new agricultural advisor to the Administrator, attended and was receptive to the Committee's concerns. He said that he would relay the discussion to the Administrator for further instruction. The FRRCC likely will meet again in late summer or early fall with conference calls in the interim.
Bale Packaging Committee Annual Meeting Near
Those considering attending the '15 Joint Cotton Industry Bale Packaging Committee (JCIBPC) annual meeting, set for Feb. 25 at the Peabody Hotel in Memphis, TN, are reminded that a room block is being held at the hotel for the nights of Feb. 24 and 25. The deadline for making room reservations is 5 pm on Feb. 3. Reservations can be made by calling the hotel's central reservations department at 901-529-4000 or 800-732-2639 and asking for the "NCC Bale Packaging" room block.
JCIBPC meeting notices have been distributed to committee members, advisors and cotton bale packaging firms. JCIBPC Chairman Ben Evans' meeting notice to past JCIBPC annual meeting attendees is available on the NCC website's bale packaging page,www.cotton.org/tech/bale/index.cfm.
On-site meeting registration will open at 12:15 pm. The first general session will be held from 1-2 pm. The JCIBPC's executive session to discuss experimental and compatibility test programs will follow the first general session and a second general session is scheduled to follow the executive session.
COTTON USA Global Advertising Campaign Debuts
The Heimtextil trade show in Frankfurt, Germany, marked the start of the "I Love My Cotton" global advertising campaign for the refreshed COTTON USA brand. Heimtextil, as the world's leading trade show for home textiles and the year's first international trade show, offered an appropriate platform for the global launch. The COTTON USA booth connected industry, brand and retail partners throughout the US cotton supply chain.
Cotton Council International (CCI) generated new business opportunities for COTTON USA licensed home textiles suppliers by connecting buyers and sellers of US cotton products at its booth. Several companies from Europe, India and Turkey signed COTTON USA licenses during the show – which united 68,000 trade visitors and 2,759 exhibitors from 68 countries. CCI also presented product samples from the new collections of several international COTTON USA licensees.
For four days, the COTTON USA pavilion at Heimtextil served as an international meeting point for the entire cotton trade – from merchants to mills, manufacturers, brands, retailers and the press. CCI, Cotton Incorporated and Supima provided comprehensive information about the global cotton market, sourcing, consumer research and the marketing and promotional services that the US cotton industry offers. Cotton prices and cotton availability were discussed.
Sales Hit Another Marketing Year High
Net export sales for the week ending on Jan. 15 were 499,900 bales (480-lb) – a marketing year high. This brings total '14-15 sales to approximately 8.9 million bales. Total sales at the same point in the '13-14 marketing year were approximately 8.5 million bales. Total new crop ('15-16) sales are 582,800 bales.
Shipments for the week were 235,800 bales, bringing total exports to date to 3.1 million bales, compared with the 3.8 million bales at the comparable point in the '13-14 marketing year.
