Cotton's Week June 22, 2001

Cotton's Week June 22, 2001

Cotton's Week: June 22, 2001

House Ag Committee Limits Assistance Package to $5.5 Billion

House Ag Committee narrowly approved proposal authored by Reps. Stenholm (D-TX) and Boehner (R-OH) limiting ag assistance package to $5.5 billion. Proposal was offered as substitute to $6.5 billion package proposed by Chairman Combest (R-TX). Stenholm-Boehner amendment limits emergency assistance to $5.5 billion for all purposes and provides authority for provisions to be pro-rated to maintain total outlays at $5.5 billion.

Chairman Combest package would have provided $5.5 billion to program crops in form of market loss assistance payment (MLA) paid at ’99 AMTA rate and would have then utilized about $1.0 billion from FY02 funds to provide assistance to oilseeds and specialty crops. Citing concerns that White House would veto a bill that spent more than $5.5 billion, Stenholm stated that substitute version met budget ceilings and preserved $7.35 billion in ’02 funding for writing next farm bill.

Committee adopted Stenholm-Boehner substitute, 24-23, with 17 Democrats and 7 Republicans voting for substitute. Final bill passed committee by 31-14 vote and contains $4.6 billion for supplemental AMTA payments to be made in FY01 (about 84.7% of last year’s supplemental payment); and $878 million for other agricultural needs, including $423 million to producers of ’00 crop of oilseeds, $54.2 million to producers of ’00 crop of peanuts (quota or additional), $16.9 million to producers of wool and mohair, additional $84.7 million to producers and first-handlers of ’00 crop of cottonseed, $169 million to producers of specialty crops (available through state grant program), and $129 million in supplemental payments to tobacco quota holders

Rep. Berry (D-AR) amendment to increase limit on loan deficiency payments and marketing loan gains to $150,000 per person for ’01 crops was adopted. (Certificate redemptions remain in effect for ’01 crop.) Emergency package may be considered by full House week of June 25.

NCC joined other general farm and commodity organizations in urging committee to make $5.5 billion available in form of market loss assistance paid at ’99 Agriculture Market Transition Act rate, citing continued financial crisis in agriculture sectors. NCC also urged members to provide $100 million for cottonseed assistance and to favorably consider eliminating 1.25-cent threshold in Step 2 and to allow producers to receive market loss assistance on basis of more recent planting history (provided payment rate can be maintained) if additional funds become available.

Chairman Combest opposed limited package throughout committee consideration, voting against final passage of bill. "The needs in rural America this year are certainly no less than they were in ’00, when Congress provided $6 billion in economic assistance for row crop producers alone," said Combest. "My commitment is to see that producers receive adequate backing for this crop year, and to get assurance they will receive it this crop year."

Despite authoring substitute, Stenholm stated that "As we move through the legislative process, I am going to continue to explore every opportunity to provide additional assistance to our agricultural producers without resorting to deficit spending."

NCC Will Continue to Seek Improvement in Ag Relief Package

NCC Chairman James Echols said that while NCC obviously is pleased that cottonseed assistance was included in House Ag Committee package, "US cotton is an industry in crisis, and we will seek opportunities to improve the package as the full House and the Senate take up the bill."

Memphis merchant noted that NCC had communicated strong support for supplemental Agriculture Market Transition Act payment "at the ’99 rate" to be distributed as soon as possible as way to address farmers’ needs. NCC economists estimate House bill will provide payment to cotton farmers of 6.7 cents prior to Oct. 1.

Cottonseed assistance also would be paid before Oct. 1 under House plan. First handlers of ’00 crop of cottonseed would receive supplemental payment equal to 84.7% of payment made just few weeks ago on ’00 cottonseed crop.

"We appreciate the House action in finding a mechanism for timely payments in the form of market loss assistance and cottonseed and oilseed assistance," Echols said.

American Farm Bureau President Bob Stallman said, "We are going to work with the Senate to improve the situation for agriculture. The case can be made that, with higher input costs, the situation in agriculture has not improved." He said aid package should be at least $7 billion, and any upturn in farm income was restricted largely to livestock producers.

NCC and AFBF were among 6 farm groups that wrote committee members before vote to say more than $5.5 billion would be needed considering fuel, oil, electricity, fertilizer and pesticide costs were expected to rise by $2 billion to $3 billion this year.

NCC: US Textiles Crisis Threatening Nation’s Cotton Infrastructure

NCC analysis shows that US cotton infrastructure is being undermined because of US textile industry’s economic crisis.

NCC Vice President Dr. Mark Lange, who authored report, said surge in imported cotton products to US has decimated US textile mills. Results are harming textile workers and ancillary industries and damaging natural fiber producers and rural economy as US cotton growers face prices well below USDA’s estimated cost of production.

Report said it is imperative that US agricultural and trade policy recognize fundamental economic relationship between US textile and cotton production sectors. Policies are needed that can address imbalances wrought by external economic forces or distortions in foreign industrial policies that damage US manufacturing and agricultural interests.

Report notes that US mill cotton use, which declined from 11.4 million bales in ’97 to 9.5 million bales in ’00, is projected at only 8.5 million bales for ’01. This reduction comes as imports of foreign-manufactured textile and apparel products made from foreign cottons are growing at staggering rate. These averaged 5.6 million bale equivalents between ’93 and ’96 but soared to 10.6 million bale equivalents in ’00.

Lange said US textiles are in this calamitous state despite being world’s most efficient textile industry. For example, although number of active US spinning positions has fallen by more than one-half in past 20 years, cotton pounds used per position have increased 7-fold, from 200 pounds in ’80 to estimated 1,400 pounds by ’00.

Ergonomics Action Plan Deadline Set for September

Labor Secretary Chao has set deadline of September to reveal course of action on ergonomics. Congress, under Congressional Review Act (CRA), voted in March to overturn Occupational Health and Safety Administration ergonomics rule that was finalized in November ’00.

Labor Department will hold "public forums" in Washington, DC, July 16-17; Chicago July 20; and California July 24 to answer "basic questions" surrounding issue. Written comments are due Aug. 3.

Chao has already held about 40 stakeholder meetings with labor and industry. She dealt with questions concerning what constitutes ergonomics injury; how to determine if injury is work-related; and what are most useful and cost-effective types of government involvement to address workplace ergonomics injuries (e.g., rulemaking, guidelines, or issuance of "best practices" to avoid musculoskeletal disorders).

Following principles will be used to guide Labor Department development of new framework: prevention, sound science, incentive-driven, flexibility, feasibility and clarity. If department chooses to pursue another regulation, it cannot be substantially same as previous rule, according to CRA.

Trade Promotion Authority Supported

Group of farm and food industry organizations called for launch of new round of negotiations within World Trade Organization and for Congress to grant President Bush Trade Promotion Authority (TPA). TPA would allow up or down vote on trade agreements, without opportunity for amendments. Coalition, known as AgTrade, is made up of more than 100 agricultural organizations. Ag Secretary Ann Veneman joined group to show Administration support for effort.

Cotton Sales Exceed 8 Million Bales

Net cotton export sales for week ending June 14 were approximately 81,500 bales (480 lb.), slightly more than 10,000 bales higher than previous week’s sales, raising total ’00-01 sales to approximately 8.1 million. Sales total at same point in ’99-00 marketing year was about 7.6 million bales.

Shipments for week were 138,000 bales, bringing total exports to date to approximately 5.63 million bales, down from 6.14 million at comparable point in ’99-00 marketing year.

Mid-South Cotton Producers to Share Innovations With Southeastern Peers

Mid-South cotton producers will host Alabama, Florida, Georgia, South Carolina, North Carolina and Virginia cotton producers July 7-12 as part of NCC/FMC Producer Information Exchange (P.I.E.) program.

Program, managed by NCC’s Member Services staff and supported by grant to The Cotton Foundation from FMC Corp., helps America’s cotton producers become more efficient by speeding adoption of proven technology and innovative farming methods.

Participants will begin tour in northeast Louisiana on July 9 with visit to Jay Hardwick’s cotton farm and Panola Company cotton operation in Newellton and then get individual tours of various cotton farming operations in area. On 10th, they participate on additional individual cotton farm tours in Lake Providence, LA, area.

Among other activities scheduled are Delta Council’s insight into Delta cotton production and agriculture; overview of Delta Research & Extension Center’s research and tour of Delta Branch Experiment Station; and visits to area farms in Washington County, MS, and to Ray Makamson’s farm in Itta Bena, MS.

P.I.E. program features 3 other tours. Producers from Oklahoma, Texas and New Mexico will visit operations in Arizona and California July 21-27; producers from Arizona and California will tour Texas’ High Plains and South Texas, Aug. 4-9; and producers from Arkansas, Louisiana, Missouri, Mississippi and Tennessee will travel to Georgia and Alabama, Aug. 18-23.

Effective June 22-28, ’01

Adj. World Price, SLM 11/16      33.70 cents*
Coarse Count Adjustment          0.00 cents
Current Step 2 Certificate Value 0.70 cents
Mktg. Loan Gain Value            18.22 cents

*No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. N. Eur.      47.35 cents
Forward 3135 c.i.f. N. Eur.      47.34 cents
Coarse Count c.i.f. N. Eur.      45.92 cents
Current US c.i.f. N. Eur.        53.35 cents