- NCC Joins in Call for Additional Congressional Funding
- NCC Scheduled for Farm Program Hearings
- Input Costs Will Pressure Farm Profitability
- US Stocks Raised, World Stocks Lowered in USDA Report
- Imported Textile, Apparel Damaging US Mill Interests
- Push for Full WTO Round Moves Forward
- Survey Indicates Continued Acceptance of Biotechnology
- NCC Urges No GMO Labeling Law in Mexico
- Senators Seek Permanent Status
for DOJ Ag Concentration Post
- Glickman Joins DC Law Firm
- Export Commitments Hit 5.6 Million Bales for Week
- Effective Feb. 9-15, '01
- Five Day Average
NCC Joins in Call for Additional Congressional Funding
NCC joined with 22 other farm groups in letter to House Ag Chairman Combest (R-TX) and Senate Ag Chairman Lugar (R-IN) requesting they urge Budget committees to provide additional agricultural funding authority "equal to at least the same level of emergency economic loss assistance" that was provided for '00 crop.
According to letter, new funding request would be in addition to Congressional Budget Office projections for farm program outlays for each fiscal year. Groups urged Lugar and Combest to seek additional funding when they make recommendations to Budget committees regarding "funding requirements for agriculture over the next 10 years."
"We believe that agriculture's funding requirements under both the current farm bill and its successor need to be addressed in the FY02 Budget Resolution," the farm groups stated. "To facilitate the development of new farm legislation, it is important for the budget resolution to provide sufficient funding to enable the authorizing committees to develop effective agricultural policies. In addition to farm income support and conservation compliance, these policies include rural development, research and export programs, as well as a program to compensate producers for voluntary conservation practices."
While groups stated request would "add significantly to projected outlays for agriculture programs," they said additional funding is needed to give Ag committees "sufficient flexibility in the budget to provide adequate economic loss assistance and to write effective long-term farm legislation."
Additional funding authority would equal amount expended for emergency farm assistance in '00, including supplemental farm program (AMTA) payments, oilseed and dairy indemnity payments and assistance to producers of various specialty crops. In addition, groups asked that funding authority "be provided for livestock disease eradication efforts and to offset the cost of compliance by the agriculture sector with conservation/environmental regulations."
NCC Scheduled for Farm Program Hearings
NCC is scheduled to testify as House Ag Committee Chairman Combest (R-TX) opens round of farm program hearings. Subject to confirmation, NCC Executive Committee Chairman Robert McLendon will present cotton industry views before committee Feb. 15.
Rep. Combest wants committee members to have time to question representatives of various farm and commodity organizations who will testify at hearings, which will be held from mid-February through March. Committee will hear from agricultural economists on Feb. 14.
Senate Agriculture Committee may begin similar hearings near end of February or early March.
Input Costs Will Pressure Farm Profitability
USDA Chief Economist Keith Collins reported that farm input costs - which escalated faster in last year than any other time in US history - will continue to pressure farm profitability in year ahead. In report to Philadelphia ag promotion group, Collins said farm input costs rose record $7 billion to $8 billion in last year due largely to higher diesel fuel costs, interest expenses and labor costs.
Energy costs will remain problem for growers in '01, he said, because even though diesel costs may equal last year's $1.45/gal., fertilizer prices are running about $350/ton for anhydrous ammonia, triple that of few years ago. Fertilizer costs are tied to natural gas prices, which, in mid-December, were 5 times greater than year earlier, he noted, and fertilizer industry idled about half of its nitrogen capacity. However, natural gas prices have eased about 40% in last month, enough for at least 2 fertilizer plants to resume operations starting next week.
Overall, "the U.S. farm sector is suffering its third weakest market since World War II," Collins said, with prices for many commodities hovering near 15 to 25-year lows.
US Stocks Raised, World Stocks Lowered in USDA Report
USDA's February estimates of US cotton situation for '01 showed decrease in expected mill use and exports, which caused increase in expected ending stocks. Report left US crop estimate at 17.2 million bales.
Projected raw cotton imports were down from previous month to 30,000 bales. USDA lowered expected mill use 100,000 bales to 9.7 million and exports 300,000 bales to estimated 7 million bales. Projected ending stock of 4.5 million bales represents corresponding stocks-to-use ratio of 26.9%.
USDA's February report lowered expected world crop 370,000 bales to 88.1 million. Largest change occurred in India (-400,000). This latest estimate includes 2 million-bale jump in Chinese production reported by China National Statistics Bureau. Projected world mill use was reduced 110,000 bales to 92.1 million. Significant reductions were made in US (-100,000) and Europe (-60,000). Changes now put expected ending stocks at 37.27 million bales, down from previous month's estimate of 37.39 million bales. This has corresponding stocks-to-use ratio of 40.5%.
Imported Textile, Apparel Damaging US Mill Interests
Calendar year cotton use in US mills has fallen from 11.3 million bales in '97 to estimated 9.9 million for '00, NCC economists said in recent economic update. During calendar '00, imported cotton textile and apparel products reached equivalent of 15.9 million bales.
US retail purchases of cotton textile and apparel are estimated at 20.9 million bale equivalents, giving imports 76% market share in '00. However, NCC economists estimate that 5.9 million bale equivalents of 15.9 million are US cotton and cotton products returning as finished goods.
US exports of cotton textile products reached equivalent of 5 million bales in '00, with 90% shipped to Mexico, Canada or countries of Caribbean Basin. Much of that product eventually returns to US as finished products. Thus, foreign cotton in imported cotton products is estimated at 10 million bale equivalents, or 48% of US retail cotton consumption. Total US imports of cotton textile and apparel increased from 10.5 million bale equivalents in '97 to 15.9 million in '00.
Council economists estimate that foreign cotton content in imported textile products rose from 7.1 million bale equivalents in '97 to 10 million bale equivalents in '00. Strength of US dollar continues to pose serious problem as imported textiles and apparel displace domestic products on US retail shelf space.
Push for Full WTO Round Moves Forward
Mike Moore, Director General of World Trade Organization, will visit Washington, DC, in late February to continue pitch for full round of WTO trade negotiations. WTO has scheduled full ministerial meeting in Doha, Qatar, in mid-November, which could provide springboard for full round of negotiations.
Currently, only agriculture and services sector are actively engaged in multilateral negotiations. However, WTO officials caution that many countries will not negotiate meaningfully on agriculture unless they can open new markets for their exporters in other sectors at same time. In recent address in Australia, Moore commented, "We need trade-offs that only a wider negotiating agenda can provide. Capitals and leaders must engage; show the flexibility that is necessary."
Need for broad round was echoed by Ag Secretary Veneman during her confirmation hearing. In general, officials believe that agriculture fares better in context of broad multi-sector negotiations.
Survey Indicates Continued Acceptance of Biotechnology
With first-hand knowledge of value and benefits biotechnology delivers to their farms and to consumers around globe, US farmers are again poised to plant large share of cotton, corn and soybean acres with biotech seed in '01.
Report from 13 leading agricultural and commodity organizations, including NCC and Council for Biotechnology Information, showed adoption of biotech products in cotton industry within past few years has been rapid and widespread. Annual USDA Cotton Varieties Planted reports show plantings of biotech varieties have increased from 13% of total cotton acreage in '96 to 70% in '00.
Louisiana cotton producer Donna Winters is among farmers who have seen value of biotechnology on her Lake Providence farm. "Biotechnology has proven to be a vital tool," she said. "Products like Bt cotton allow us to apply fewer pesticides to the crop. This reduced chemical use and the fact that we now make fewer trips over our fields with equipment are big pluses for the environment. These products also improve our efficiency tremendously. Economically and environmentally, I don't think either American farmers or consumers can afford to lose access to the products of biotechnology."
NCC Urges No GMO Labeling Law in Mexico
NCC joined Biotechnology Industry Organization and several food and agriculture groups in call to prevent mandatory labeling of biotech food law in Mexico. In letter to Secretary of State Powell, and copied to Ag Secretary Veneman and US Trade Representative Zoellick, Powell's immediate intervention was asked when President Bush visits Mexico in March.
Mexican Senate unanimously approved addendum to country's general health code that would require biotech goods to be labeled as "transgenic" or as product containing biotech ingredients. Proposal is under review by Mexican Chamber of Deputies with action expected in March.
Letter spelled out huge ramifications to US farmers, food companies, biotech industry and others and said proposal is not based on sound science, would confuse Mexican consumers and would create negative precedent for NAFTA. It also pointed out that American Medical Association issued statement in December saying there is "no scientific justification for special labeling of genetically modified foods."
Senators Seek Permanent Status
for DOJ Ag Concentration Post
Two farm state senators introduced bill that would give farm families, rural communities and consumers permanent advocate in Department of Justice with respect to economic concentration. Bill, introduced by Sens. Harkin (D-IA) and Lugar (R-IN), would require US Attorney General to continue high level Justice position for oversight of economic concentration in agriculture.
Last year, Senators secured appointment of special counsel to Justice, who specifically looked out for family farm and rural interests. Department then created similar post to assist Assistant Attorney General of Antitrust Division. Bill as introduced would ensure this position remains within department regardless of which administration is in office.
Glickman Joins DC Law Firm
Former Ag Secretary Glickman joined Akin, Gump, Strauss Hauer & Feld, one of major lobbying and law firms in Washington. He will advise clients on food and food safety, health, biotechnology and international trade. Glickman, Democratic member of House before heading USDA, signed on as partner in public law and policy practice group.
Export Commitments Hit 5.6 Million Bales for Week
Total export commitments through week ending Feb. 1 were almost 5.6 million bales, approximately 728,000 bales lower than total sales for same period in '99-00 marketing year. Shipments were 2.7 million bales, increase of approximately 5.5% over last year's amount for comparable point in '99-00 marketing year. Outstanding commitments as of Feb. 1 were about 2.8 million bales, down from 3.7 million bales previous year.
Effective Feb. 9-15, '01
Adj. World Price, SLM 1 1/16 ..... 48.03 cents* Coarse Count Adjustment ..... 0.00 cents Current Step 2 Certificate Value . 4.54 cents Marketing Loan Gain Value ..... 3.89 cents Import Quotas Open ..... 1 *No Adjustment Made Under Step 1
Five Day Average
Current 3135 c.i.f. Northern Europe ..... 61.86 cents Forward 3135 c.i.f. Northern Europe ..... No Quote Coarse Count c.i.f. Northern Europe ..... 58.02 cents Current US c.i.f. Northern Europe ..... 67.00 cents Forward US c.i.f. Northern Europe ..... No Quote