Outgoing NCC Chairman Shane Stephens told delegates in his address at the organization’s 2017 Annual Meeting in Dallas that the NCC was active on numerous fronts in 2016 with the primary focus on successfully addressing the industry’s economic challenges. That challenge involved seeking longer term, stabilizing farm policy including finding a legislative opportunity to advance the cottonseed proposal prior to the next farm bill’s development. (see next article)
The Mississippi warehouseman also shared with delegates the NCC’s ongoing priorities of: 1) securing short-term economic assistance for cotton producers – which includes working to get a cottonseed policy in place as a bridge until the new farm bill is enacted; 2) strengthening cotton’s safety net in the next farm bill; 3) enhancing cotton crop insurance policies, including improvements in quality loss provisions; 4) maintaining beneficial trade agreements and policies, while addressing unfair trade practices and man-made fiber policies and overcapacity; 5) reversing burdensome regulations, while preserving critical crop protection products; 6) securing funding for the industry’s priorities in the annual appropriations process; and 7) ensuring that our industry has a well-funded political action committee for advancing cotton’s priorities with our nation’s lawmakers.
Dr. Jody Campiche, the NCC’s vice president, Economics & Policy Analysis, told delegates there are a number of key questions that will shape the 2017 economic outlook for the U.S. cotton industry. In recent months, cotton prices have maintained a stronger appearance despite: 1) concerns about world demand, 2) Chinese imports below historical levels, 3) weakness in other commodity markets and 4) a stronger dollar.
Additional details of the 2017 Cotton Economic Outlook, including results and analysis of the NCC's Annual Planting Intentions survey, are at www.cotton.org/econ/reports/annual-outlook.cfm. In her analysis of the NCC Annual Planting Intentions survey results, Campiche said the NCC projects 2017 U.S. cotton acreage to be 11.0 million acres, 9.4 percent more than 2016. With abandonment assumed at 12 percent for the United States, Cotton Belt harvested area would total 9.7 million acres. Using an average U.S. yield per harvested acre of 830 pounds would generate a cotton crop of 16.8 million bales, with 16.0 million upland bales and 760,000 extra-long staple bales. However, she said it is important to note that although the survey results suggest an increase in cotton acreage, that increase is largely the result of weaker prices of competing crops and improved expectations for water. (state details are in table below)
House Agriculture Committee Conaway (R-TX) told those attending the NCC Annual Meeting that “we’ve got to get cotton back under Title I either as cottonseed or as lint.” Speaking at the Program Committees Joint Meeting and Economic Outlook, Conaway said, “Whatever I can do in the next two years. If I can get that done sooner under the existing farm bill with existing authorities. We will do that if at all possible.”
Regarding the developing of the next farm bill, Conaway said the House Agriculture Committee will be conducting listening sessions around the country in the near term because he wants to hear from producer groups as well as the rank and file farmer about the way the farm bill affects the way they do business. He said production agriculture has been facing really hard times, and “I’m going to work really hard to be the best friend production agriculture has as we move to this next process.”
Conaway said he expects some efforts to split nutrition and commodity titles as the farm bill debates begin. “If it’s easier to pass both bills by keeping them together, we will,” he said. “If it is easier to pass both bills by splitting them, we will do that. What I will not allow is to split the bills so that (detractors) can defeat both.”
In response to Lamesa, TX, producer Shawn Holladay’s question on how budget reconciliation might affect funding for agriculture programs, Conaway said the atmosphere prevalent during 2014 farm bill discussions included record production and record prices and the feeling of many was that prices would not retreat to previous levels.
“Today, the need for a safety net is apparent,” Conaway said. “Crop prices are low.” He also noted that the 2014 bill has resulted in lower expenditures than expected, despite the significant loss of farm income in 2016.
Regarding trade, Conaway noted that President Trump’s proposal to work on bilateral trade deals might have merit but needs to go forward. He also said a trade imbalance consists of two factors — imports and exports. “Exports mean a lot to agriculture and we have to begin considering both factors,” he stated.
A video of Chairman Conaway’s full annual meeting address, including his answers to industry members’ follow-up questions, is available on the NCC website’s YouTube channel at www.youtube.com/watch?v=3mUNcBRXpXg.
Rep. Arrington (R-TX), who addressed the annual meeting’s general session, also stated that he would work to get cotton back into the farm bill as a covered commodity, saying that “getting cotton back in as a covered commodity is our No. 1 priority.”
Noting that he anticipates a challenge to farm policy, Arrington said that producing a safe, affordable, and abundant supply of food and fiber is part of the U.S. Constitution’s promise of securing “the public good,” and a secure food supply also is essential for the “common defense” of the nation. “We have a lot of hard work to reform regulations and tax codes. And we need to open new markets — if we can compete head-to-head, we win every time. We need to work toward fair trade.”
A video of Rep. Arrington’s full annual meeting address, including his answers to industry members’ follow-up questions, is available on the NCC website’s YouTube channel at www.youtube.com/watch?v=eD6pZFbqewE.
NCC Applauds Scott Pruitt Confirmation
The NCC is pleased that the Senate confirmed the nomination of Oklahoma Attorney General Scott Pruitt as the new EPA Administrator. Pruitt was confirmed on a 52 to 46 vote. While he lost one Republican vote, Democratic Sens. Heitkamp (ND) and Manchin (WV) supported his confirmation.
Pruitt was expected to be sworn in as EPA Administrator on February 17.
NCC Chairman Ronnie Lee, a Bronwood, GA, producer, stated, "I look forward to the day very soon that farmers can spend more time producing crops and less time worrying about how to comply with onerous, overly burdensome regulations and doing paperwork. The cotton industry looks forward to working with Administrator Pruitt as he leads EPA in a way to help ensure a safe and healthy environment alongside a strong and viable agricultural sector."
Attorney General Pruitt, who has been a tireless critic of some of EPA's regulations, has promised to revamp the agency.
"We hope that President Trump and Administrator Pruitt act on the President's campaign promises regarding certain regulations, and ensure the agency is making decisions based on sound, peer reviewed science rather than based on public opinions," Lee said.
State of Rural Economy Hearing Held
The House Agriculture Committee began a series of hearings in preparation for writing the next farm bill.
A news release on the hearing with links to the testimony of the five agricultural economists on the witness panel is at http://bit.ly/2lrsyoy. Witnesses included USDA Chief Economist Dr. Robert Johansson along with an executive from the Federal Reserve Bank of Kansas City and economists from Texas A&M University and the University of Missouri.
In his opening statement, Chairman Conaway (R-TX) noted that, “Farmers and ranchers have endured a 45 percent drop in net farm income over the last three years, the largest three-year drop since the Great Depression. The most recent ERS report now tells us that net farm income will be down again in 2017. Overall, ERS is forecasting a 50 percent drop in net farm income since 2013 … in the upcoming Farm Bill debate we will measure our requirements first and then determine what a budget -- what kind of a budget we'll need to meet those needs.”
A number of Committee Members highlighted the need to strengthen the safety net policy for U.S. cotton with respect to the next farm bill. Those Members expressing the need to address cotton policy included Chairman Conaway, Ranking Member Peterson (D-MN), and Reps. Crawford (R-AR), Allen (R-GA), and Arrington (R-TX).
House Agriculture Committee Passes Favorable Bills
The House Agriculture Committee held a full committee markup of the Pesticide Registration Enhancement Act of 2017 (H.R. 1029) and the Reducing Regulatory Burdens Act of 2017 (H.R. 953). The Committee passed H.R. 953 quickly by voice vote. A companion bill was introduced in the Senate.
H.R. 953 would clarify that federal law does not require the court-ordered, redundant permit for pesticide applications near water; and that such applications already are authorized under the Federal Insecticide, Fungicide and Rodenticide Act. The NCC earlier had joined more than 100 organizations on a letter, on the NCC’s website at www.cotton.org/issues/2017/hr953.cfm, urging congressional support for H.R. 953.
H.R 1029 also passed with bipartisan support in the Committee. This bill reauthorizes the Pesticide Registration Improvement and Extension Act (PRIA), which requires pesticide companies to pay EPA a fee to cover a portion of the costs associated with pesticide products review and registration for approval by set deadlines. PRIA is one of the few regulations that enjoys support from pesticide manufacturers, agriculture, environmental and farmworker groups.
Senate Panel Conducts Endangered Species Act Hearing
The Senate Environment and Public Works Committee held a hearing to discuss reforming the Endangered Species Act (ESA).
The hearing testimony focused on the problems in the western United States created by the ESA’s protection of predators that create havoc with cattle ranchers and dairymen. There were calls for the states’ wildlife experts to have more of a say in what, when and how species are listed for protection.
Chairman Barrasso (R-WY) stated that while the ESA has listed more than 1,600 animals and plants, less than 3% have recovered enough to be delisted. He compared it to a scenario in which a doctor who successfully treated only 3 of every 100 patients would need to have his license and practice reviewed.
The major issue for crop farmers is that EPA consultation with federal wildlife agencies, as required by ESA, delays and/or stops pesticide registrations and re-registrations.
Other witnesses felt the Act needed to be left alone or strengthened. Sen. Ernst (R-IA) asked why three counties in her state would be regulated under the ESA for the about-to-be-listed Rusty Patched Bumble Bee (RPBB) when the bee had not been seen in those counties for 17 years.
The NCC submitted comments for the record on the issues of registration delays, lack of water in the western states due to ESA restrictions, and the unscientific process used to list the RPBB. Those comments are on the NCC’s website at www.cotton.org/issues/2017/esacomm.cfm.
Sales Strong, Shipments Surge
Net export sales for the week ending on February 9 were 241,900 bales (480-lb). This brings total 2016-17 sales to approximately 11.0 million bales. Total sales at the same point in the 2015-16 marketing year were approximately 6.8 million bales. Total new crop (2017-18) sales are 897,100 bales.
Shipments for the week were 374,200 bales, bringing total exports to date to 6.1 million bales, compared with the 3.6 million bales at the comparable point in the 2015-16 marketing year.
