Producers eligible for USDA’s new Cotton Ginning Cost-Share (CGCS) program have until Aug. 5, 2016, to sign up. There will be no extension of that deadline.
USDA has begun distributing program payments, which are issued soon after an individual signs up. A CGCS fact sheet, including eligibility and payment calculation information, is on the NCC’s website at www.cotton.org/issues/2016/upload/16cgcsfact.pdf. More information also is at www.fsa.usda.gov/cgcs and in the Farm Service Agency’s (FSA) recently issued Notice CN-1057 – “Cotton Ginning Cost-Share (CGCS) Program for 2015 Cotton Crop” at www.cotton.org/issues/2016/upload/ginnote.pdf. Producers also may contact their local FSA offices. To find your local FSA office, go to http://offices.usda.gov.
USDA Reports Cotton Crop Progress
USDA’s July 17 crop progress report shows 77% of this season’s US cotton crop was at or beyond the squaring stage, five percentage points ahead of last year and one percentage point ahead of the five-year average. Also, 28% of the cotton crop was setting bolls across the 15 cotton-producing states for which weekly conditions are tracked. Boll setting was one percentage point behind this time last year and two points behind the five-year average. The crops in California and Kansas are the most behind schedule with 5% of bolls setting.
As of July 17, crop condition is slightly below where it was at this time last year with 90% of the crop rated fair or better compared to 92% of last year’s crop. South Carolina leads the way in terms of crop condition in the Southeast with 99% of its crop rated fair or better. Tennessee leads the Mid-South region with 97% of its crop rated fair or better. In the Southwest, 99% of the Kansas crop is rated fair or better while 100% of the Oklahoma crop is rated fair or better. In Texas, 87% of the crop is rated fair or better. In the West, California has 100% of its crop rated fair or better while Arizona has 95% of its crop rated fair or better.
The NCC, the American Cotton Shippers Association and AMCOT filed a joint comment letter with the Commodity Futures Trading Commission (CFTC) in response to the CFTC’s supplemental notice of proposed rulemaking on position limits.
The letter, on the NCC’s website at www.cotton.org/issues/2016/upload/16cftccomm.pdf, generally supported the comments filed previously by the Commodity Markets Council (CMC), which provided practical recommendations for an effective and efficient position limits regime that is workable for commercial end-users. Cotton industry members have commented to the CFTC on the position limits issue previously in both 2014 and 2015. The comments supported these key provisions to be addressed in the CFTC’s final rulemaking on position limit issues:
1. Interpret the term risks in the Commodity Exchange Act broadly to include all the risks associated with business;
2. Allow firms to utilize both “gross hedging” and “net hedging” concepts, and affirm that each of these methods entail derivatives that would be eligible for bona fide hedging treatment;
3. Recognize the full scope of anticipatory hedging activities such as anticipatory merchandising and anticipatory processing hedges, and cross-commodity hedges as enumerated hedge exemptions;
4. Authorize the exchanges to grant bona fide hedges, non-enumerated bona fide hedges,
and spread exemptions during the last five days of trading or less;
5. Continue allowing the exchanges to grant cash and carry spread exemptions; and
6. Implement the reporting regime for end-users and exchanges as recommended by CMC.
Successful hedging benefits the entire cotton industry and ultimately benefits the general public by reducing the volatility for consumers. The CFTC is strongly urged to consider the concerns raised by the cotton industry and other commercial end-users before issuing a final position limits rulemaking.
Chlorpyrifos Support Conveyed
The NCC, along with 16 other commodity and crop protection organizations, recently filed an amici brief with the Ninth Circuit Court of Appeals in support of the crop protection product, chlorpyrifos. Included in the brief was a declaration regarding the need for chlorpyrifos by Cannon Michael, a California cotton producer.
Last year, the Court had ordered EPA to act on a proposed rule to revoke all tolerances for chlorpyrifos by December 20, 2016. If the tolerances are revoked, then the product will be effectively removed from the market and unavailable for use on any crops. Chlorpyrifos is widely used on numerous crops for control of insect pests and is of particular importance for cotton produced in the Western region for control of whiteflies and aphids in order to prevent the development of “sticky cotton.”
In response to the Court order, EPA has requested an additional six months to issue a final rule on chlorpyrifos, yet this amount of time is viewed by the industry as being substantially inadequate to complete the necessary scientific review and analysis of data that has been put forth. Therefore, the amici brief includes a request for the Court to allow EPA an additional year to complete its work. The Court has accepted the amici brief, meaning it will at least consider the arguments put forward before making its decision.
OSHA Penalty Adjustments Take Effect in August
In November 2015, Congress enacted legislation requiring federal agencies to adjust their civil penalties to account for inflation. The Department of Labor is adjusting penalties for its agencies, including the Occupational Safety and Health Administration (OSHA). The new penalties will take effect on August 1, 2016. Any citations issued by OSHA after that date will be subject to the new penalties if the related violations occurred after November 2, 2015.
OSHA's maximum penalties, which were last adjusted in 1990, will increase by 78%. Serious and other-than-serious violations, as well as posting requirement violation penalties, will increase from the current maximum of $7,000 to $12,471 per violation. Penalties for failure to abate violations will increase from a current maximum of $7,000 per day beyond the abatement date to $12,471 per day beyond the abatement date. Penalties for willful or repeated violations will increase from a current maximum of $70,000 per violation to a maximum of $124,709 per violation.
In the future, OSHA will continue to adjust its penalties for inflation each year based on the Consumer Price Index. States that operate their own OSHA plans are required to adopt the maximum penalty levels to the levels that are at least as effective as federal OSHA's.
Mid-South cotton producers saw cotton operations in North Carolina and South Carolina as part of the NCC’s 2016 Producer Information Exchange (PIE) program.
Sponsored by Bayer CropScience LP via a grant to The Cotton Foundation, the PIE program is now in its 28th year of helping its US cotton producer participants improve yields and fiber quality – and has exposed more than 1,100 US cotton producers to innovative production practices in regions different than their own. Specifically, the program helps producers improve their overall farming operation efficiency by: 1) gaining new perspectives in such fundamental practices as land preparation, planting, fertilization, pest control, irrigation and harvesting and 2) observing firsthand the unique ways in which their peers are using current technology. The NCC’s Member Services staff, in conjunction with local producer interest organizations, conducts the PIE program, including participant selection.
The 12 producers touring the Southeast were: Arkansas – Barry Brantley, Lake Village; Louisiana – Kody Beavers, Fort Necessity; Casey Cater, Harrisonburg; Nathan Lee, Tallulah; and Clifton Mills and Ryan Wilkerson, both from Rayville; Mississippi – Paul Muirhead, Anguilla; John Thomas Robertson, Indianola; and Smith Stoner, Holly Bluff; Missouri – Gary Hayes, Portageville; and Tennessee – Adrian Smith, Grand Junction; and Alex Youngerman, Lexington.
The group spent the first two days in North Carolina. They visited Bayer CropScience LP’s headquarters for presentations on innovative technologies and the biotechnology regulatory environment and a greenhouse tour focusing on cotton plant cultivation and trait characterization. They also toured the company’s Bee Care Center before traveling to nearby Sanford for a look at yarn spinning at Frontier Mills. The group also visited Cotton Incorporated’s headquarters in Cary, Cotton Growers Co-Op in Garner, Mount Olive Pickle in Mount Olive and Warren Brothers Farms in Newton Grove, where they looked at cotton, tobacco, sweet potato and swine production.
Later in South Carolina, the group observed the Bayer Cotton Agronomic Performance trials and then visited the Nucor Steel Plant and the Sonoco Paper Products plant, both in Hartsville. They saw cotton and peanut production at John Hane Farms in Saint Matthews; peanut receiving and handling at the Palmetto Peanut operation in Cameron; and commercial sod production and harvesting at a Super Sod facility outside of Orangeburg.
This season’s other PIE tours will have Southeast producers visiting Mid-South operations on July 24-28; Southwest producers touring California’s San Joaquin Valley on August 1-4; and Western producers observing operations in two of Texas’ cotton production regions on August 15-19.
US Cotton Home Textiles Promoted
New homeowners in China learned how to decorate their entire dwellings with US cotton-rich home textiles during a unique month-long promotion with COTTON USA licensee, Shanghai Imagine. Some 2,800 people visited a model home at the new Wonderland Crown apartment community in Wuhan that was fully outfitted with furniture, bedding, curtains and other cotton home textiles from Shanghai Imagine. This marks the first time COTTON USA has directly promoted an entire home design concept – from furniture to décor – to consumers. COTTON USA will use this format at another new Chinese apartment community promotion in September.
The Wonderland Crown promotion targeted several thousand consumers who recently purchased homes at the apartment community and are in the process of decorating and choosing home textile products. Shanghai Imagine’s general manager explained to attendees why their products are made of US cotton fabrics and then Cotton Council International introduced COTTON USA and further described US cotton’s benefits. Attendees received a table cloth made of US cotton fabric so they could see and touch the COTTON USA difference.
Shanghai Imagine sold $20,000 worth of bedding sets made from 1,800 meters of US cotton fabrics on the promotion’s launch day. Over the next six months, this COTTON USA licensee anticipates additional sales of home textiles made from more than 100,000 meters of US cotton fabrics.
Sales Weak, Shipments Steady
Net export sales for the week ending on July 14 were 84,400 bales (480-lb). This brings total 2015-16 sales to approximately 9.8 million bales. Total sales at the same point in the 2014-15 marketing year were approximately 11.7 million bales. Total new crop (2016-17) sales are 2.4 million bales.
Shipments for the week were 199,400 bales, bringing total exports to date to 8.7 million bales, compared with the 10.8 million bales at the comparable point in the 2014-15 marketing year. With less than one month remaining in the marketing year, weekly shipments must average about 214,000 bales to reach the USDA projection of 9.2 million bales.
