Secretary Tom Vilsack reported on the Biden administration’s budget request for USDA in FY25 before the Senate Appropriations Subcommittee on Agriculture, Rural Development, and the Food and Drug Administration.
This hearing was a follow-up to Vilsack’s appearance before House appropriators last month and covered similar issues. Among other topics, the Secretary stressed the importance of conservation efforts and the need to assist small and mid-size farmers.
Senator Jerry Moran (R-KS) expressed concern about USDA’s decision to discontinue National Agricultural Statistics Service reports, including the Cotton Objective Yield Survey and the County Estimates for Crops and Livestock. Vilsack responded that the discontinuations were a result of budgetary contraints.
The White House budget request for FY25 calls for $31.6 billion in total discretionary spending for USDA operations, an increase from the $29.3 billion recently enacted for FY24. The request recommends a funding boost for nearly all USDA programs, including the cotton pest account of the Animal and Plant Health Inspection Service, which was allocated $15.6 million in the budget—a $100,000 increase over the FY24 enacted total.
While the presidential budget request offers an important glimpse of the Biden Administration’s priorities, it is not a binding document. Congress has final say on all government funding matters and will begin drafting FY25 appropriations legislation in the coming weeks.
Ambassador Tai Visits the Hill
United States Trade Representative (USTR)Katherine Tai was on Capitol Hill twice this week to provide updates on the U.S. trade agenda to both the House Ways and Means Committee and the Senate Finance Committee.
Both hearings were wide-ranging, with agricultural trade being one of many topics addressed. In written testimony, Tai stated that through negotiations with the European Union, Japan, Mexico, India, and elsewhere, the Biden administration secured over $21 billion in new market access for agricultural products.
In advance of Tai’s appearance, the NCC had joined over 30 agriculture organizations in a letter at www.cotton.org/issues/2024/upload/24tradelet.pdf urging the Biden administration to “recommit to an aggressive trade agenda to meaningfully expand export opportunities for U.S. food and agricultural products.” The letter also calls on the USTR to “stringently and effectively enforce existing trade agreements” and “implement objective science and risk-based regulatory measures.”
Trade Bills Advance Out of Committee
The House Ways and Means Committee advanced five trade bills to the House floor.
After a seven-hour markup, the two most significant bills that were reported out of the Committee are the End China’s De Minimis Abuse Act (H.R. 7979) and the Generalized System Preferences Reform Act (H.R. 7986). H.R. 7979 would exclude from the de minimis provision any import subject to Section 301 tariffs, while H.R. 7986 would reauthorize the Generalized System of Preferences waiving tariffs on imports from over one hundred developing countries.
During the markup, some Committee members expressed skepticism about the effectiveness and enforceability of H.R. 7979, and it is unclear whether this bill and the others will be acted on by the full House.
The Environmental Protection Agency announced changes to its Herbicide Strategy to protect endangered and threatened species. The changes are in response to overwhelming comments on the complexity of the document and the confusion generated among stakeholders.
The National Cotton Council will review the changes and continue to seek modifications to the strategy. EPA also announced that they will hold a workshop/briefing later in the year. The update can be reviewed at https://bit.ly/3Q4KMJN.
EPA Announces Changes to Malathion Label
The EPA has announced that growers and other users should remain vigilant for label changes related to Malathion. One of the changes will require users to use Bulletins Live! Two to download Endangered Species Bulletins when using the insecticide.
After consultation between EPA, the National Marine Fisheries (NMFS) Service, and the registrant, NMFS issued a “no jeopardy” Biological Opinion for Malathion. During that consultation, the registrant committed to amend the product label and registration to include measures that reduce runoff and spray drift from treated areas into species’ habitats. EPA also committed to issuing Endangered Species Protection Bulletins, available on the Bulletins Live! Two website to locate geographically specific pesticide use limitations that would protect listed species and their critical habitats.
EPA plans to issue the Malathion Proposed Final Decision in July 2024 and the Final Decision in January 2025 and notes there will be a 12-month existing stocks provision in place during the transition.
New USDA Staff Appointments Announced
USDA announced numerous staff changes and promotions, including the appointments of Dr. Alexandra Lawrence to serve as Chief of Staff for the Natural Resources Conservation Service, and of Ethan Holmes to serve as Senior Policy Advisor for the Animal and Plant Health Inspection Service.
Lawrence, who holds a doctorate in environmental studies, had most recently worked at the Peace Corps. Holmes comes to USDA from the Office of the United States Trade Representative, and before that was on the policy team of former U.S. Representative Ron Kind (D-WI).
More information about these and other staff appointments can be found at https://bit.ly/4dgSzhZ.
Farm Bill and Regulatory Issues Focus of ACP Spring Meeting
The American Cotton Producers (ACP), chaired by David Dunlow of North Carolina, held its spring meeting in Dallas, TX. Keynote speakers included Congressman and former House Agriculture Committee Chairman Frank Lucas (R-OK), Dr. Benjamin Munyan, Director of Supervisory Policy & Senior Economist at the Federal Reserve Bank of Dallas, Eva Bille, Director EU Policy for Hill & Knowlton, and Byron Cole, Deputy Director Grading Division, USDA-AMS Cotton and Tobacco.
Congressman Lucas updated the ACP on the timeline of House Agriculture Committee action on the 2024 Farm Bill and the difficulty of passing a Farm Bill in 2024 due to the sharp political divisions, particularly in the House of Representatives. Congressman Lucas expects the House Agriculture Committee will pass their version of the Farm Bill by Memorial Day and will attempt to get a bill across the floor of the House. Congressman Lucas also acknowledged the difficulties producers were facing across the cotton belt due to recent droughts and increased production cost environment.
Dr. Munyan provided an overview of the agricultural economy as well as credit conditions in the industry. Dr. Munyan said that economic conditions in U.S. agriculture have moderated from very strong levels over the past two years, with profit margins likely being thinner in the year ahead, partly due to higher financing costs. The outlook for agricultural credit conditions has dampened somewhat, but the strength of recent years will provide support through 2024.
Bille gave an overview of the wealth of European Union policies coming down the line that will impact brands & retailers and the cotton value chain. These policies are reshaping the sustainability needs of the brands and retailers and make U.S. Cotton Protocol participation critical for cotton producers.
Cole provided an overview of cotton classing for the 2023 crop. Cole was grateful for the ACP and the National Cotton Council’s continued work in supporting additional appropriated funds for improved automation in the USDA Cotton Classing Labs. The NCC is requesting another $4 million in funds for FY 2025 after receiving $4 million in FY 2023. The USDA Cotton Classing Labs did not receive any funds in FY 2024. Cole has stated that the classing fee for the 2024 crop year has not been determined, and there would be an announcement on the fee by June 1. The current rate is $2.75/bale.
NCC Vice Chairman Patrick Johnson provided an update on NCC priority issues, which included the importance of implementing Council priorities in the development of the 2024 Farm Bill. However, Johnson acknowledged that passing a Farm Bill will be difficult due to limited budget resources available to the Agriculture Committees. Johnson also stated that it will be critical for Congress to address the current economic shortfall facing producers if a Farm Bill is not passed in 2024. Johnson outlined the importance of tax reform in 2025 as inaction could lead to a significant reduction in the estate tax exemption and the phasing down of bonus depreciation and other business tax benefits. Johnson discussed the latest Federal District Court ruling vacating the dicamba label and the importance of EPA acting to approve a new label for the 2025 growing season. He also addressed challenges related to the cotton supply chain and the importance of producer use of only National Agricultural Society of Biological Engineers approved module wrap.
The meeting also included an economic update from NCC Vice President (VP) of Economics and Policy Analysis Dr. Jody Campiche and an overview of pesticide regulations, including dicamba from VP of Technical Services Dr. Chad Brewer. The ACP heard a Washington update from VP of Washington Operations Robbie Minnich and NCC President and CEO Dr. Gary Adams apprised the ACP on the latest with the U.S. Cotton Trust Protocol and the USDA Climate Smart Cotton Program. NCC VP of Producer Affairs Tas Smith provided a crop insurance update and NCC Senior Government Relations Director Jeff Kuckuck previewed the 2024 elections.
Cotton & Tobacco Program Newsletter Available
The spring edition of the USDA Agricultural Marketing Service’s Cotton and Tobacco Program (C&T) stakeholder newsletter is available at https://bit.ly/444yuXH. Industry members can also subscribe to receive the publication via email.
The spring edition introduces Angie Snyder as the new deputy administrator and notes exciting updates on the Macon classing office’s cotton conveyance system upgrade, insights from the Joint Cotton Fungibility Working Group, and the latest news from the 30th Universal Cotton Standards Conference.
Registration Continues for Gin Schools
U.S. certified ginners, gin managers and superintendents are urged to register for one of the two remaining 2024 Ginner Schools. Online registration is at www.cotton.org/ncga/ginschool/index.cfm.
The remaining school locations and dates are: Western Ginners School at the Southwest Ginning Research Laboratory Mesilla Park, NM, on May 7-9; and the Mid-South-Southeast Ginners School at the Abraham Baldwin Agricultural College in Tifton, GA on June 4-6. The Mid-South-Southeast school will return to the Stoneville, MS location in 2025.
Course descriptions also can be found at www.cotton.org/ncga/ginschool/index.cfm. The schools will continue to offer the Levels I, II and III as well as the continuing education courses. The three schools' programming is coordinated by the National Cotton Ginners' Association (NCGA), working with USDA’s Greg Holt and the three USDA ginning laboratories.
Programming for Levels I, II and III will feature practical information on all aspects of ginning. Among topics to be covered are seed cotton drying/cleaning through the ginning process and gin waste disposal methods. The schools' overall emphasis will be on increasing ginning efficiency, turning out high quality fiber and a focus on improving safety. The Ginner Schools' Continuing Education Courses will include topics such as gin property insurance, fire detection and prevention, RFID technology, data collection, gin automation, precleaning for all conditions, bale packaging and contamination prevention, and classing and module averaging.
School cooperators include USDA's Agricultural Research Service, NCGA and its member associations, the NCC, the Texas Cotton Ginners Trust, Cotton Incorporated, gin machinery/equipment manufacturers and suppliers, and select land grant universities.
Sales, Shipments Steady
Net export sales for the week ending April 11, 2024 were 153,300 bales (480-lb.). This brings total ‘23-24 sales to approximately 11.7 million. Total sales at the same point in the ‘22-23 marketing year were approximately 12.4 million bales. Total new crop (‘24-25) sales are 1.2 million bales (480-lb.).
Shipments for the week were 280,800 bales, bringing total exports to date to 8.1 million bales, compared with the 7.8 million bales at the comparable point in the ‘22-23 marketing year.
Capital Calendar
April 15
The House and Senate convene.
April 16
The Senate Appropriations Subcommittee on Agriculture, Rural Development, and Food and Drug Administration held a hearing to review the Biden administration’s FY25 budget request for USDA. More information and a link to view the hearing are at https://bit.ly/3xyomdP.
The House Ways and Means Committee held a hearing, “The Biden Administration’s 2024 Trade Policy Agenda.” More information and a link to view the hearing are at https://bit.ly/4cXnkYR.
April 17
The Senate Finance Committee held a hearing, “The President’s 2024 Trade Policy Agenda.” More information and a link to view the hearing are at https://bit.ly/3vMTNAn.
The House Ways and Means Committee held a markup to consider H.R. 7981, H.R. 7979, H.R. 7983, H.R. 7980, and H.R. 7986. More information and a link to view the markup are at https://bit.ly/3QacMMm.
