Cotton's Week November 30, 2001

Senate Action on Farm Bill Delayed

Efforts to secure full Senate vote on new farm bill stalled as lawmakers dealt with other matters, and aides to Majority Leader Daschle (D-SD) indicated debate would not begin on issue before Dec. 3 or 4.

Sen. Daschle convened news conference in which NCC and 31 other farm and lender organizations participated, urging Senate to approve new farm bill "without delay." Groups also made known their support for bill without non-agriculture-related amendments. They pointed out that unencumbered farm bill is only way to get bill passed by Senate and through conference so that Congress can approve final bill this year.

"I don’t think you can emphasize enough the urgency with which we need to address farm legislation," Daschle said. "Today, more than ever before, we need to strengthen the industry that so strengthens us. We need to pass this bill without delay and do it without attaching unrelated measures. It is my firm intention to pass a farm bill this year."

Earlier, President Bush and Ag Secretary Veneman addressed farm bill issue in addresses to Farm Journal Forum.

In his remarks, President called for "generous but affordable" bill that adheres to budget limits and gives farmers safety net without leading to overproduction. "A good farm bill should keep a safety net under our ... producers without misleading (them) into overproducing crops that are already in oversupply. A good farm bill should be generous and affordable (and) should honor the budget limits that Congress has agreed to live by."

Following President’s comments, NCC Chairman James Echols said, "The President seemed to open the door to the process moving forward, provided the bill meets certain priorities that the Administration has established. We agree that a strong safety net that the current law does not have is needed and can be provided under the budget guidelines agreed to by Congress.

"The House has passed a bill that complies with the budget constraints Congress has established, and we continue to support quick action by the Senate so that a bill can be brought to conference and passed before adjournment. Growers and their lenders need the certainty a new bill would provide as they plan for the 2002 crop year."

In related development, Sens. Cochran (R-MS) and Roberts (R-KS) indicated they are completing legislation that could be offered during Senate debate as alternative to bill reported by Senate Ag Committee (formerly S. 1628 but renumbered S. 1721). Details are expected Dec. 3 and will be available at www.cotton.org.

Senate Committee Approves Andean Renewal

Senate Finance Committee approved legislation to renew and expand Andean Trade Preference Act (ATPA). Introduced by Sen. Graham (D-FL), measure would extend ATPA through Feb. 28, ’06, and would provide duty-free treatment to certain apparel products.

Preferential treatment for apparel products would apply only to articles assembled in Andean countries using US-manufactured fabrics containing US yarn or using fabric knit in Andean country using US yarn. Preference for items containing regional-knit fabrics is limited to 70 million square meter equivalents.

ATPA is scheduled to expire Dec. 4. Originally passed in ’91, act provides duty-free treatment to selected products, excluding footwear and apparel, to 4 Andean nations – Bolivia, Ecuador, Colombia and Peru.

Prior to committee action, NCC Chairman James Echols sent letter to Chairman Baucus asking for 6-month extension of current legislation. He also recommended that committee "work with representatives from the US textile industry, the Administration and the Andean region to craft consensus legislation concerning the expansion of Andean trade preferences to apparel products – based on S.525 as introduced by Sen. Graham – with the goal of fostering mutually beneficial relationships between US and Andean firms with minimal adverse impact on the remaining US industry." Letter also stated that "… legislation renewing the ATPA and adding preferences for certain apparel products assembled in the Andean countries … should include the goal of maximizing US content."

During Finance Committee meeting, Chairman Baucus (D-MT) indicated if work on expanded ATPA could not be finished prior to end of this session, he hoped legislation providing 6-month extension of ATPA could be approved to ensure no interruption of trade.

In related development, Sens. Cochran (R-MS) and Roberts (R-KS) indicated they are completing legislation that could be offered during Senate debate as alternative to bill reported by Senate Ag Committee (formerly S. 1628 but renumbered S. 1721). Details are expected Dec. 3 and will be available at www.cotton.org.

House Continues Push for Dec. 6 TPA Vote

House leaders continue to insist that vote on Trade Preference Authority (TPA) will occur on Dec. 6. According to statement by Ways and Means Committee Chairman Thomas (R-CA), legislation granting President broad authority to negotiate trade agreements, subject to Congressional approval, would be modified to address concerns expressed by representatives from textile, citrus and steel production districts.

Cabinet officials also have stepped-up efforts to build support for TPA. Ag Secretary Veneman, Commerce Secretary Evans, Treasury Secretary O’Neill, State Department Secretary Powell and US Trade Representative Zoellick have been actively promoting support for TPA. President Bush has announced his intention to meet with members of House in days leading up to scheduled vote.

President has made TPA one of his top legislative priorities. Authority would allow President to negotiate agreements that Congress could approve or reject, but not amend. Bush told Farm Journal Forum audience that passage of trade authority "sends an unmistakable signal to our trading partners that the Congress and the Administration are united on trade."

Supporters of TPA argue that negotiating partners will not take US positions seriously if they know that Congress has power to amend final agreement.

At issue are negotiations on Western Hemisphere free trade zone, which President hopes to complete by ’05 and new round of World Trade Organization trade liberalization talks to begin in January.

Senate is unlikely to take up fast track legislation this year. Sen. Grassley (IA), ranking Republican on Finance Committee, said that he was dismayed by Senate’s failure to commit to vote this year.

Combest Adds His Support to TPA

House Ag Committee Chairman Combest (R-TX), saying he would work with USDA in securing domestic and trade goals for America’s farmers and ranchers, announced his support for granting President trade promotion authority.

Combest was original co-sponsor of legislation but withdrew support during summer when Administration and committee could not agree on direction of new farm legislation.

Noting President’s earlier remarks about farm legislation (see related article), Combest said, "The president, in almost every aspect, described the House Agriculture Committee farm bill."

In announcing his TPA support, Combest said, "... I will also work to make sure the President is presented a good farm bill that he can sign.

"The President ... expressed his personal commitment that America’s farmers and ranchers will be the beneficiaries of trade promotion authority. (He) reiterated his intention that agriculture remains the cornerstone of his Administration’s trade program and that his commitment to American farmers and ranchers in all aspects – including trade negotiations and now a farm bill – is strong and constant."

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Panel Will Review Competitors’ Practices at Beltwide

Mississippi producer Kenneth Hood will guide discussion on production practices of US cotton’s competitors at ’02 Beltwide Cotton Production Conference, Jan. 9-10, in Atlanta, GA.

Hood, who serves as NCC vice chairman, will moderate panel of US shippers based in Australia, Brazil, China, India and West Africa. Group, representing Dunavant Enterprises, Globecot, Hohenberg Brothers and Paul Reinhart AG merchandising firms, also will review production practices of these overseas countries and how their quality/yields compare with US.

Georgia producer Robert McLendon will lead discussion of cotton nematode management. Mid-South producers John Shackleford and David Wildy and researchers and Extension agents will join McLendon, NCC’s Executive Committee chairman. Panel will talk about combating root-knot and reniform species using resistant cultivars, crop rotations and integrating management of nematodes, weeds and insects. Discussion will include use of precision ag techniques for spot control in high-density nematode areas.

Sampling of reduced airline fares and other information regarding ’02 Beltwide Cotton Conferences is at www.cotton.org/beltwide.

October Mill Use Estimate Placed at 7.7 Million Bales

Commerce Department estimated US textile mill cotton consumption for October (4 weeks) at 304.8 million pounds or seasonally adjusted annualized rate of 7.7 million 480-pound bales. October ’00 annualized rate was 9.49 million bales.

Commerce also revised September (5 week) estimate to 373.88 million pounds, approximately 850,000 pounds below previous estimate. Seasonally adjusted annualized rate of consumption for September is 7.85 million bales, 1.92 million bales below last September’s estimate of 9.77 million bales.

Preliminary November domestic mill use of cotton and revised October figures will be released by Commerce Department Dec. 28.

Coalition Urges Congressional Reform of Immigration Laws

NCC joined 43 agriculture groups in letter to House and Senate urging support for immigration reform legislation. Citing need for adequate, affordable agricultural work force, letter urges support for versions of Wage Equity Act (H.R. 2457, S. 1442) introduced by Rep. Bishop (D-GA) and Sen. Miller (D-GA).

Act addresses labor cost problem by adjusting H-2A program’s Adverse Effect Wage Rate to prevailing wage rate for area and occupation of intended employment.

Agriculture groups’ letter also urges support for Sen. Craig’s (R-ID) AgJOBS legislation (S. 1161), which provides for additional reforms in H-2A program and adjustment in immigration status for certain agricultural workers.

Net Export Sales Near 8.4 Million Bales

Net export sales for week ending Nov. 22 were 248,700 bales (480-lb.), approximately 44% lower than previous week’s sales of 359,200 bales, raising total ’01-02 sales to almost 8.4 million. Total sales at same point in ’00-01 marketing year were approximately 4.5 million bales.

Shipments for week were 166,600 bales, bringing total exports to date to approximately 2.9 million bales, up from almost 1.5 million at comparable point in ’00-01 marketing year.

Effective Nov. 30-Dec. 6, ’01

Adjusted World Price, SLM 1 1/16                26.22 cents*
Coarse Count Adjustment                           0.00 cents
Current Step 2 Certificate Value                  2.06 cents
Marketing Loan Gain Value                        25.70 cents
*No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. Northern Europe              40.29 cents
Forward 3135 c.i.f. Northern Europe                 No Quote
Coarse Count c.i.f. Northern Europe              37.10 cents
Current US c.i.f. Northern Europe                43.60 cents
Forward US c.i.f. Northern Europe                   No Quote