Lincoln-Hutchinson Proposal Near Match to House-Passed Bill
Sens. Lincoln (D-AR), Hutchinson (R-AR), Miller (D-GA), Helms (R-NC), Breaux (D-LA), Landrieu (D-LA) and others introduced their version of Food Security Act on Nov. 9. Structured to closely match House-approved bill, Lincoln-Hutchinson measure provides fixed, decoupled payments, marketing loan and counter-cyclical income support mechanisms.
Sen. Lincoln stated that proposal could be offered as amendment in committee if chairman’s mark is not modified to include additional funds for commodity title.
Legislation includes important provision for textile industry by eliminating 1.25/lb. threshold for Step 2 program. For growers, loan and fixed payment rates are same as in House bill H.R. 2646 and target prices are at ’95 levels. Loan for ELS cotton is fixed at 79.65 cents per pound. Soybeans and peanuts are included as program crops, with buyout to peanut quota holders.
Base acreage update under Lincoln-Hutchinson bill provides option of most recent 4 years of all acres (including soybeans) or total of production flexibility contract acreage and most recent 5-year average of plantings to soybeans and oilseeds (calculation must not exceed total cropland).
Legislation includes 75% funding increase for conservation programs. Funding increases also are provided for trade, rural development, nutrition and research titles.
Senate Moves Farm Bill Title-by-Title
Senate Agriculture Committee continued work on new farm legislation, unanimously approving forestry, energy, trade, rural development and research titles with no amendments adopted. However, several members expressed concern over "title-by-title" process that could ultimately spend majority of budgeted funds, leaving little for commodity title.
Cotton Belt Senators Lincoln (D-AR), Miller (D-GA) and Hutchinson (R-AR) cited economic crisis in farm country and alerted committee that banks are unwilling to finance ’02 crop without strong guarantee of government assistance. Chairman Harkin (D-IA) stated that committee was not solely commodity committee and urged colleagues to consider priorities in other areas such as rural development, nutrition and conservation.
Sen. Cochran (R-MS) expressed concern over number of new programs that used mandatory funds. Cochran stated funds are going to new, unproven programs instead of critical areas such as commodity title.
Committee action is expected to resume Nov. 13. Remaining titles include conservation, competition, nutrition and commodity. Highlights of committee action thus far:
Trade Title - Doubles existing funding for Market Access Program (MAP) to $190 million annually by end of 5-year bill. Increases Foreign Market Development Cooperator Program (FMD) to $42.5 million within 3 years.
Energy Title – Includes grant and loan program to help establish new farmer-owned renewable energy cooperatives, such as wind, bio-mass or other energy sources. Creates energy audit program that will help farmers and rural Americans find ways to save money and assess their potential for generating renewable energy.
Credit Title - Expands credit opportunities for new and beginning farmers.
Rural Development Title - Provides $100 million for grants and loans to provide telecommunications and broadband access for rural America.
Ag Appropriations Bill Clears Conference
Conference Committee completed work on FY02 agriculture appropriations measure to fund programs of USDA, Food and Drug Administration and Commodity Futures Trading Commission. Report provides $16 billion for agencies, slightly more than Administration’s request of $15.4 billion, but President is expected to sign legislation once House and Senate act on Conference Report.
For cotton, National Boll Weevil Eradication Program received funding approximately equal to $79 million received in FY01 and funding for Pink Bollworm Eradication and Control was increased slightly from $1.6 million provided last year. Additional details will be published in future issue of Cotton’s Week.
Funding for Farm Service Agency salaries and expenses increased by $119 million; Agriculture Research Service is funded at $1.1 billion, increase of $122 million over last year; and conservation operations increased by $66 million.
House Subcommittee Chairman Bonilla (R-TX) and Senate Ranking Member Cochran (R-MS) played key roles in successful completion of work on legislation.
Stimulus Package Approved by Senate Finance Committee
Senate Finance Committee approved economic stimulus package totaling $66.3 billion on 11-10 straight party line vote. Senate is expected to begin debate on legislation week of Nov. 12, and Majority Leader Daschle (D-SD) indicated he hopes to complete work before Thanksgiving recess.
Finance Committee’s version differs dramatically from House-passed bill in that it focuses on increased spending and provisions to expand unemployment benefits and health care subsidies for laid-off workers. Tax relief provisions include payments to individuals who did not fully qualify for previous rebates. Immediate expensing of 10% of qualified investments in capital and property placed in service within next 12 months will be allowed for business, and net operating loss carry back period was extended from 2 years to 5 years, applicable to losses for next 12 months.
Bill also includes $3 billion for agriculture disaster assistance, $3 billion for rural development and clarification of exemption from excise tax on aviation fuel for crop disaster. Andean Trade Preference Agreement, which expires in December, would be extended for 6 months.
USDA Estimate Climbs Slightly to 20.18 Million Bales
In its November cotton production report, USDA increased estimate of ’01-02 crop to 20.18 million bales. Estimated upland crop was increased 100,000 bales to 19.56 million, while ELS production was raised 3,000 bales to 618,000. Cottonseed production estimate was raised 28,200 tons to 7.57 million.
Report increased estimated ’01-02 world cotton crop to 96.9 million bales (480 lb.), reduced expected world mill use to 91.6 million bales and increased projected world stocks to 44.4 million bales. This has corresponding world stocks-to-use ratio of 48.5%. Estimates for ’01-02 US marketing year show reduced mill use at 8.1 million bales, increase in exports to 9.4 million and ending stocks of 8.7 million bales for stocks-to-use ratio of 49.7%.
|
US Cotton Crop, ’01-02 | ||||
|
YIELD PER |
5-YEAR |
480- | ||
|
HARV. |
HARV. |
AVG. |
POUND | |
|
ACRES |
ACRE |
YIELD |
BALES | |
|
Thou. |
Lb. |
Lb. |
Thou. | |
|
UPLAND |
||||
|
SOUTHEAST |
3,470 |
724 |
624 |
5,231 |
|
Alabama |
605 |
730 |
582 |
920 |
|
Georgia |
1,490 |
709 |
629 |
2,200 |
|
North Carolina |
975 |
763 |
645 |
1,550 |
|
South Carolina |
296 |
649 |
617 |
400 |
|
Virginia |
104 |
743 |
707 |
161 |
|
MID-SOUTH |
4,565 |
717 |
701 |
6,820 |
|
Arkansas |
1,080 |
778 |
744 |
1,750 |
|
Louisiana |
855 |
578 |
674 |
1,030 |
|
Mississippi |
1,630 |
724 |
753 |
2,520 |
|
Missouri |
395 |
790 |
637 |
650 |
|
Tennessee |
605 |
690 |
592 |
870 |
|
SOUTHWEST |
4,700 |
461 |
478 |
4,510 |
|
Oklahoma |
200 |
504 |
443 |
210 |
|
Texas |
4,500 |
459 |
479 |
4,300 |
|
WEST |
1,003 |
1,340 |
1,171 |
2,800 |
|
Arizona |
278 |
1,260 |
1,253 |
730 |
|
California |
655 |
1,429 |
1,182 |
1,950 |
|
New Mexico |
70 |
823 |
685 |
120 |
|
OTHER STATES |
161 |
584 |
506 |
196 |
|
TOTAL UPLAND |
13,899 |
675 |
642 |
19,557 |
|
ELS |
241 |
1,233 |
1,037 |
618 |
|
Arizona |
7.5 |
960 |
855 |
15 |
|
California |
209 |
1,286 |
1,114 |
560 |
|
New Mexico |
7 |
686 |
664 |
10 |
|
Texas |
17 |
932 |
787 |
33 |
|
ALL COTTON |
14,139 |
685 |
649 |
20,175 |
White House Names Conner to Ag Assistant’s Post
Charles "Chuck" Conner, former aide to Sen. Lugar (R-IN), was named Special Assistant to President for Agricultural Trade and Food Assistance. Conner, who served most recently as President of Corn Refiners Assn., previously served as Staff Director of Senate Agriculture Committee.
Prior to appointment, Conner, member of Bush Administration transition team, also had been considered for top positions at USDA and Office of US Trade Representative.
USTR Textile Negotiator Appointed
Kevin Koonce, legislative assistant to Sen. Helms (R-NC) for last 4 years, was named special textile negotiator for Office of US Trade Representative. In his new position, Koonce will focus on textile trade agreements and negotiations in effort to address industry’s priorities.
According to USTR’s statement, "Koonce will play a critical role in trying to expand overseas markets for US textiles and address the significant disruption recently experienced by the US industry."
USTR noted that approximately 60,000 US textile jobs have been lost in past year.
Beltwide Panelists will Address New Cultural Practices
Altering cultural practices and technologies on today's cotton farms often leads to additional costs that must be considered in making such decisions. Group of innovative cotton producers from across Cotton Belt will address ramifications of implementing different systems in "Cultural Practices Impact Costs," panel discussion scheduled for ’02 Beltwide Cotton Production Conference, Jan. 9-10, in Atlanta, GA.
Attendees will hear from producers who already have gone through trial and error process of changing from long-standing practice and incorporating new tools.
Sampling of reduced airline fares and other information regarding ’02 Beltwide Cotton Conferences is now on line at www.cotton.org/beltwide. Find out what will be presented, register for conference and make travel plans.
NCWC to Boost Benefit Auction, Educational Outreach
Cotton Farming magazine has joined forces with National Cotton Women's Committee (NCWC) to expand "Funding for the Future" benefit auction at ’02 Beltwide Cotton Conferences.
Cotton Foundation special project is supported by magazine’s publisher, Vance Publishing. Proceeds from this and future auctions will be used to support NCWC’s cotton educational campaign across Cotton Belt. NCWC representatives are assisting magazine in soliciting auction items.
Each auction item will have $25 minimum, and maximum of 100 items will be auctioned. Attendees will be able to bid on items at opening night reception, Jan. 8, and on Jan. 9-10 by visiting Cotton Farming booth at Foundation exhibits. Donors should contact Vance’s Alisa Salmons, at (800) 255-5113. Deadline is Jan. 3, and items should be shipped to attention of Janice McRae at NCC, 1918 N. Parkway, Memphis, TN, 38112.
Cotton Sales Higher in Most Recent Week
Net export sales for week ending Nov. 1 were 231,000 bales (480 lb.), almost 6% higher than previous week’s sales of 218,400 bales, raising total ’01-02 sales to almost 7.3 million. Total sales at same point in ’00-01 marketing year were approximately 4.2 million bales.
Shipments for week were 196,100 bales, bringing total exports to date to slightly over 2.4 million bales, up from approximately 1.2 million at comparable point in ’00-01 marketing year.
Effective Nov. 9-15, ’01
Adjusted World Price, SLM 1 1/16 21.29 cents*
Coarse Count Adjustment 0.00 cents
Current Step 2 Certificate Value 3.24 cents
Marketing Loan Gain Value 30.63 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 3135 c.i.f. Northern Europe 35.36 cents
Forward 3135 c.i.f. Northern Europe No Quote
Coarse Count c.i.f. Northern Europe 33.12 cents
Current US c.i.f. Northern Europe 39.85 cents
Forward US c.i.f. Northern Europe No Quote