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October 9, 2015
 

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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
 
 


 
Stay Issued on WOTUS Rule

The US Sixth Circuit Court of Appeals issued a stay of the "Waters of the United States" (WOTUS) rule. This court action, in response to a request by 18 states, provides a nationwide stay of the WOTUS rule, thereby preventing EPA from implementing or enforcing the rule pending further action by the court. This action makes the stay nationwide following the earlier court ruling that provided a stay for only 13 states.

In addition, the NCC joined other agricultural organizations on a letter to EPA Administrator McCarthy and Secretary of the Army McHugh seeking clarification on the practical implications of the final rule defining WOTUS under the Clean Water Act.

The letter, on the NCC's website at www.cotton.org/issues/2015/upload/15wotusletoct.pdf, noted that personnel from the EPA and Army Corps of Engineers (Corps) addressed in a closed "webinar" 27 questions from state agency personnel regarding jurisdictional and non-jurisdictional ditches under the final rule. Non-state agency personnel were not invited to participate. The letter requests that the EPA and Corps promptly release and make public the answers provided at the webinar. Furthermore, as additional webinars on other final rule implementation topics are held, the letter requests that the agencies' answers to those questions also be made public immediately.

The questions posed to the agencies on Sept. 17 covered practical matters like what is the difference between ditches and canals; how does one know if ditches were constructed in "dry" land; what definition of "ephemeral," "intermittent," and "perennial flow regime" will be used in determining ditch exclusions; and if there is guidance for onsite determinations of this nature. Other questions dealt with how the agencies will determine whether a ditch that has been in place for decades is a "relocated tributary" or is "excavated in" a tributary, and whether permitted discharges into these ditches must be designed to meet water quality standards in the ditch or in the receiving water.

The agencies' answers to the questions posed to them on Sept. 17, and answers to future questions about implementation of other aspects of the rule, will be vitally helpful to producers to help reduce confusion and uncertainty and make informed business decisions about whether and how their operations need to change to avoid discharges in violation of the Clean Water Act. The letter noted the answers to these questions could mean the difference between the organizations' members being in compliance or in violation of federal law with all of the attendant liabilities.

 
'15 US Crop Projection Lowered Slightly

In its October crop report, USDA estimated a '15-16 US crop of 13.34 million bales, 90,000 bales less than projected in its September report. Upland production was estimated at 12.89 million bales and extra-long staple (ELS) production at 451,000 bales. Harvested area was an estimated 8.17 million acres, implying a non-harvested area of 390,000 acres based on USDA's revised acreage report. The resulting abandonment rate is 4.55%. The national yield per harvested acre was estimated to be about 784 pounds, 45 pounds less than the five-year average.

Regionally, the Southeast crop is estimated at 4.27 million bales, based 2.20 million harvested acres and a regional average yield of 930 pounds, 71 pounds more than the region's five-year average. The largest yield gain when compared to the five-year average is expected in Virginiawith yields estimated at 1,086 pounds per harvested acre (+161 pounds) and Georgiawith an estimated 995 pounds per harvested acre (+112 pounds). South Carolina,with an estimated yield of 797 pounds per harvested acre (-62 pounds), is the region's only state not expected to see a yield gain when compared to its five-year average.

In the Mid-South, expected production is 2.16 million bales. Harvested area is estimated to be 942,000 acres and the expected yield is 1,101 pounds per harvested acre, 100 pounds more than the region's five-year average. All the region's states are expected to see yield gains when compared to their respective five-year averages. The largest gains are expected in Arkansaswith yields estimated at 1,218 pounds per harvested acre (+175 pounds) and Tennessee, with an estimated yield of 994 pounds per acre (+135 pounds).

The Southwest upland crop is estimated at 5.96 million bales. Expected harvested area is 4.71 million acres and the regional yield is 608 pounds, 40 pounds less than the region's five-year average of 648 pounds per harvested acre. The Texasuplandcrop is estimated at 5.65 million bales. Expected harvested area is 4.50 million acres and the average yield is 603 pounds (-46 pounds). With yields of 864 pounds and 702 pounds, respectively, Kansasand Oklahomaare both up in terms of yield when compared to their respective five-year averages.

Upland production in the West is an estimated 500,000 bales with an estimated harvested area of 159,000 acres and a regional yield of 1,509 pounds, 17 pounds more than the region's five-year average. The greatest yield gain is expected for Arizona at 1,590 pounds per harvested acre, 75 pounds more than its five-year average.

The ELS crop is an estimated 451,000 bales. Harvested area is pegged at 154,000 acres with an average yield of 1,403 pounds per harvested acre.

US Cotton Crop, '15-16

PLANTED

ACRES

Thou.

HARV.

ACRES

Thou.

YIELD PER

HARV.

ACRE

Lb.

5-YEAR

AVG.

YIELD

Lb.

480-

POUND

BALES

Thou.

UPLAND

SOUTHEAST

2,225

2,201

930

859

4,265

Alabama

315

312

838

811

545

Florida

85

83

810

784

140

Georgia

1,120

1,110

995

883

2,300

North Carolina

385

380

891

837

705

South Carolina

235

232

797

859

385

Virginia

85

84

1,086

925

190

MID-SOUTH

980

942

1,101

1,001

2,160

Arkansas

210

205

1,218

1,043

520

Louisiana

110

107

1,032

976

230

Mississippi

320

315

1,112

1,059

730

Missouri

185

175

1,070

1,034

390

Tennessee

155

140

994

859

290

SOUTHWEST

5,026

4,710

608

648

5,962

Kansas

16

15

864

664

27

Oklahoma

210

195

702

640

285

Texas

4,800

4,500

603

649

5,650

WEST

167

159

1,509

1,492

500

Arizona

85

83

1,590

1,515

275

California

47

46

1,670

1,612

160

New Mexico

35

30

1,040

1,046

65

TOTAL UPLAND

8,398

8,012

772

815

12,887

TOTAL ELS

158

154

1,403

1,414

451

Arizona

18

18

1,147

989

43

California

115

114

1,499

1,469

356

New Mexico

8

7

1,052

851

16

Texas

17

15

1,152

921

36

ALL COTTON

8,556

8,166

784

829

13,338

Source: USDA-NASS October Annual Crop Production Report.



 
US Exports, Mill Use Projections Unchanged

In its October report, USDA sees '15-16 US mill use and exports unchanged from the previous month at 3.70 million and 10.20 million bales, respectively. This generates a total '15-16 offtake of 13.9 million bales. Ending stocks for '15-16 are projected at 3.10 million bales for an ending stocks-to-use ratio of 22.3%.

For the '14-15 crop year, USDA gauged US cotton production at 16.32 million bales. Estimated mill use and exports were unchanged from the September report at 3.58 million bales and 11.25 million bales, respectively. Total offtake for the '14-15 crop year is estimated at 14.82 million bales. Ending stocks were estimated at 3.70 million bales. The estimated stocks-to-use ratio for the '14-15 marketing year is 25.0%.

USDA's report is projecting '15-16 world production to be 107.38 million bales, 1.36 million bales less than reported in its September report. World mill use was lowered 1.17 million bales from the September report to a projected 112.27 million bales. Consequently, world ending stocks for '15-16 are projected to be 106.97 million bales for a stocks-to-use ratio of 95.3%.

For the '14-15 marketing year, USDA estimated world production at 118.92 million bales, 20,000 bales less than the September report. Estimated world mill use was lowered 1.05 million bales to 110.48 million bales. World ending stocks on July 31, '15 are now estimated at 111.79 million bales. This has a corresponding stocks-to-use ratio of 101.2%.

 
Farm Programs Sequestration Percentage Set

Text USDA announced that the sequestration will be a 6.8% reduction that will be applied to Agriculture Risk Coverage and Price Loss Coverage payments scheduled to be paid this month for the '14 crop year. Sequestration is required under the Budget Control Act of 2011. The marketing loan program benefits are not subject to a sequestration reduction.ere

 
TPP Negotiations Concluded

The United States and 11 other countries that are part of the Trans Pacific Partnership (TPP) concluded negotiations following a final week of intense negotiations. The agreement has been met with mixed reviews by Congressional members and industry stakeholders.

With regard to textile provisions, the yarn forward rule of origin is the basis of the framework, but with some limited exceptions. The NCC will be closely reviewing the final text when it is released and determine the industry's position on the agreement. The US Trade Representative's office has indicated that the text of the agreement will be released within 30 days.

The Trade Promotion Authority (TPA) passed by Congress earlier this year establishes the timelines for the Administration to notify Congress of the intent to sign the agreement 90 days before signing and the text of the agreement must be made available 60 days before entering into the agreement. TPA also sets specific timeframes for Congress to take action on trade agreements.

 
Drought Legislation Hearing Held

The Senate Energy and Natural Resources Committee conducted a hearing to review legislation that would provide drought relief for the western United States. The Committee reviewed both House passed legislation (H.R. 2898) introduced by Rep. Valadao (R-CA) and (S. 1894) introduced by Sen. Feinstein (D-CA).

Though both bills include provisions that 1) provide more flexibility in water management and 2) seek long-term solutions for more water storage capacity, Committee members noted the significant differences between the two pieces of legislation. H.R. 2898 would require a water management agency of the Interior to maximize water withdrawals during droughts, whereas S. 1894 would focus on water recycling, conservation and efficiency.

During the hearing, Deputy Under Secretary of the Interior Mike Connor raised concerns and stated that some components of H.R. 2898 could conflict with existing laws, which would result in increased litigation. He also said the provisions in S. 1894 to mandate operational decisions could result in some litigation.

Other witnesses included California Sens. Boxer (D) and Feinstein, California Representative Valadao, and Dan Keppen, of the Family Farm Alliance.

 
Sales Strong, Shipments Steady

Net export sales for the week ending on Oct. 1 were 216,200 bales (480-lb). This brings total '15-16 sales to approximately 3.5 million bales. Total sales at the same point in the '14-15 marketing year were approximately 5.8 million bales. Total new crop ('16-17) sales are 586,300 bales.

Shipments for the week were 134,700 bales, bringing total exports to date to 1.1 million bales, compared with the 891,100 bales at the comparable point in the '14-15 marketing year.

 

 
Effective Oct. 9-15, ’15

Adjusted World Price, SLM 11/16

 45.22 cents

*

Fine Count Adjustment ('14 Crop)

0.27 cents


Fine Count Adjustment ('15 Crop)

 0.22 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 6.78 cents


Import Quotas Open

13

 
Special Import Quota (480-lb bales)

904,234


ELS Payment Rate

0.00 cents


*No Adjustment Made Under Step I

 
Five-Day Average

Current 5 Lowest 13/32 CFR Far East

64..97 cents


Forward 5 Lowest 13/32 CFR Far East

NA


Fine Count CFR Far East

 66.65 cents

 
Coarse Count CFR Far East

0.00 cents


Current US 13/32 CFR Far East

71.95 cents


Forward US 13/32 CFR Far East

NA