Cotton's Week April 6, 2001

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Senate Budget Increases Funds for Agriculture

Senate increased to $9 billion amount of funds to be made available to agriculture for the 2001 crop. Amendment offered by Sen. Blanche Lincoln (D-AR) increased spending level by $4 billion from level adopted by Senate three days earlier. Sen. Lincoln stated, "With input costs like fertilizer skyrocketing, I knew that farmers couldn't accept less in assistance than they received last year."

Lincoln's amendment was intended to increase emergency funds for 2001 to amount requested by thirty-two major farm organizations in earlier letter to Senate Budget Committee, a group which included the National Cotton Council.

During earlier debate Senate considered and accepted (by 51-49 vote) amendment by Sens. Grassley (R-IA), Miller (D-GA) and Domenici (R-NM) to add $5 billion in FY01 and $58.5 billion in FY02-11 to agriculture baseline. Sens. Johnson (R-SD) and Conrad (D-ND) offered amendment, rejected on 47-53 vote, which would have added $8 billion in FY01 and $88 billion for FY02-11. Sen. Lincoln's first attempt to add $9 billion for FY01 for agriculture also failed to gain approval.House and Senate resolutions now will go to Conference Committee to be reconciled. NCC Chairman James Echols, Memphis, TN, merchant, voiced appreciation to Congress for its action.

"There has been a good, full debate on agriculture issues and both houses of Congress have recognized that agriculture needs additional funding," Echols said. "The Senate's action is compatible with earlier steps taken by the House to make funds available. Although the exact amount of additional funds is not finally established, the efforts of the representatives in both houses to respond to agriculture's needs are encouraging."

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House Approves Estate Tax Repeal

House approved legislation, reported by Ways and Means Committee March 29, which would phase-out and ultimately eliminate estate tax in '11. Beginning in '11, spouses who inherit more than $3 million and others who inherit more than $1.3 million would pay capital gains taxes on any increase in value from time asset was acquired by deceased until sold by heir. Members rejected alternative to exempt estates with $2 million ($4 million for married couples) from estate tax beginning in '02 and gradually increase exemption to $2.5 million ($5 million for married couples) in '10. Current exemption is $675,000 increasing to $1 million in '06.

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NCC Submits Appropriations Requests

Continued need for economic assistance, boll weevil eradication, pink bollworm programs and international market development were among priorities cited by NCC in separate letters to House and Senate Agricultural Appropriations subcommittees setting out industry's funding requests for FY02.

With committees set to begin work on appropriations, letter reminded members of serious economic circumstances throughout agriculture and reiterated need for emergency economic assistance for '01 crop. Letter encouraged Congress to continue support for longer-term projects designed to enhance profitability, such as successful completion of boll weevil eradication program, control of pink bollworm, new technology developed through research and demand building export programs, including Marketing Assistance Program, Foreign Market Development Program and Export Credit Guarantee Program.

Letter stated that industry's long-term viability depends on effective farm policy without unreasonable eligibility restrictions or limitations on benefits, including marketing loan and adequately funded 3-step competitiveness provisions; investment in development and application of scientific principles; and aggressive market development activities. Letters also called for funding for aflatoxin work, ginning research, ginning specialist, precision agriculture and agricultural genetic activities, among other items. Full text of letters is available in members only section of

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Cotton Sales Below Previous Week

Net export sales for week ending March 29 were 111,400 bales (480-lb.), more than 40% lower than previous week's sales, as Turkey cancelled contracts for about 53,000 bales. Total commitments for '00-01 now stand at almost 7 million. Total sales at same point in '99-'00 marketing year were about 6.98 million bales. Shipments for week were almost 169,000 bales, bringing total exports to date to almost 4 million bales.

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Hawks Gets President's Nod

According to announcement, President will nominate James R. Moseley to be Deputy Secretary of Agriculture and Bill Hawks to be Undersecretary for Marketing and Regulatory Programs. Moseley, an Indiana corn and hog operator, served as assistant secretary in '90-92 and as USDA's advisor to EPA from '89-90. Undersecretary has responsibility for day-to-day operations of USDA.

Hawks, recommended by Sen. Cochran (R-MS), is managing partner of Hernando, MS- based farming operation producing soybeans, wheat and corn. He has farmed cotton. He served in Mississippi State Senate from '94-99. Under Secretary for Marketing and Regulatory Programs has responsibility for AMS Cotton Division and APHIS among others.

"I'm elated to see a fellow Mississippi farmer in this important position," NCC Vice Chairman Kenneth Hood, Gunnison, MS, producer, said. "Bill will be able to make decisions that can help shape our destiny and ensure a better future for agriculture."

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NCC Calls for GSM 102 Maintenance

In letter to Agriculture Secretary Ann Veneman, NCC Chairman James Echols cautioned Department that latest proposals on Export Credit Guarantee Program (GSM 102) being considered in international negotiations would make program ineffective for US exports of cotton and other commodities. Letter estimated that proposals being considered within Organization for Economic Cooperation and Development (OECD) could reduce annual US cotton exports around 500,000 bales annually and have detrimental impact on prices.

Citing concerns over increased fees, shortened terms and restrictive repayment requirements, Echols stated, "As currently structured, the OECD agreement appears to undermine a central export program of the United States while providing no corresponding reductions in subsidy programs operated by our competitors. This result would place the United States at a disadvantage entering another round of multilateral agricultural trade negotiations."

Echols urged Secretary to ensure that viability of GSM 102 program is maintained.

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Sorghum Recommendations Heard

Grain sorghum producers presented recommendations to House Agriculture Committee. Proposals for future policy include equalizing grain sorghum loan rate with corn loan rate; maintaining current loan rate for oilseeds and increasing all other loan rates by 5%; continuing market loan but re-aligning rates between crops and adjacent counties; revising beneficial interest to allow producers to receive LDP as of date producer lost beneficial interest; continuing fixed, decoupled payments (AMTA) at '99 rates and using same base and yields as currently employed; requiring producers to certify planted acres to remain eligible for loans and payments; and establishing crop specific counter-cyclical payment, in addition to fixed payment, to be triggered by county or regional prices or income. Crop would have to be planted to be eligible for counter-cyclical payment. Hearings will continue week of April 23 when Congress returns from Easter recess.

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Air Quality Task Force Urges EPA to Defer Farmers from Clean Air Act Permitting

USDA Agriculture Air Quality Task Force (AAQTF) approved resolution asking Agriculture Secretary Veneman to request that EPA Administrator Whitman defer production agriculture from federal permit program (Title V) until EPA, in conjunction with USDA, has appropriately defined, based on sound science, applicability of Clean Air Act (CAA) requirements to agriculture. This includes determining emission factors for agricultural sources and calculating their potential to emit. Where data are insufficient for these determinations, agencies should develop and support research to achieve these objectives.

EPA also was urged to: 1) withdraw requirement that California repeal state law excluding agriculture from permitting requirements until EPA has addressed first recommendation and 2) expeditiously implement "Voluntary Incentive-Based Compliance Program" recommended for controlling particulate matter from farms in nonattainment areas, proposed by AAQTF in '99.

Task Force document says imposition of permitting requirements would be devastating to agriculture and overall farm economy. Formal decision-making process should be established to determine appropriate way to classify agriculture for CAA and regulatory purposes. If agriculture is classified appropriately almost no farming operations would require permits.

Kelley Green, Texas Cotton Ginners; Roger Isom, California Cotton Ginners; Dr. Calvin Parnell, Texas A&M U.; and Dr. Phil Wakelyn, NCC; are AAQTF members. Task Force was required by '96 farm law and appointed by Secretary of Agriculture to advise USDA and EPA.

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CBI Summit Sourcing Event Successful

Sourcing CBI Summit, held in Coral Gables, FL, was first event to bring together leaders of cotton's apparel supply chain from US yarn/fabric suppliers, through CBI apparel manufacturers, to US importers and retailers. Sponsored by Importer Support Program of Cotton Board, and managed by CCI and Cotton Incorporated, summit provided excellent marketing platform to expand exports of US-made cotton yarns and fabrics, and for sourcing US cotton-rich garment packages out of CBI. Summit brought together 300 industry executives, including 80 US apparel importers such as Kohl's, Eddie Bauer, Gap, Liz Claiborne, Target, Levi's, Mast Industries, Nordstom's, Ralph Lauren and Wal-Mart; approximately 125 CBI fabric formers and garment manufacturers; and 80 US cotton textile mill executives.

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Confidence Seen in Increased `01 Biotech Plantings

Farmers are significantly increasing their planting of biotech crops for '01 according to USDA's annual planting survey. Biotech soybeans lead way with 9% increase, 54% in '00 to 63% this year. Cotton biotech acres will go from 61% to 63% with corn decreasing slightly from 25% to 24%.

Of particular significance is overall increase in soybean acreage to 76.7 million acres. If realized, that will be largest planted area for soybeans on record. For full survey visit:

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Survey Reveals Opinion on Biotech Enhanced Foods

New survey by Pew Initiative on Food and Biotechnology reveals that Americans know little about biotech enhanced (BE) foods, are uncertain about their safety and change their views about safety when more information about widespread use of BE foods is provided.

Survey determined that 46% of consumers do not know what to think about safety of BE foods. Those who do have definitive opinion, however, are evenly split on safety of BE foods, with 29% of respondents stating they believe BE foods are safe and 25% of respondents stating they believe BE foods are unsafe. Despite uncertainty, views about safety do not seem to be strongly held. After hearing that more than half of foods on supermarket shelves are biotech enhanced, 1 in 5 of those who initially said BE foods are unsafe changed their minds.

"Despite heated national debate about agricultural biotechnology, most Americans do not have strong or well-informed opinions about this new technology," said Mike Rodemeyer, executive director of Pew Initiative on Food and Biotechnology. "Essentially, public opinion is `up for grabs' because this new technology has moved faster than the public's ability to fully understand it and its implications."

Announcement of survey findings marks launch of Initiative, new effort committed to bringing reliable information to national debate about agricultural biotech. University of Richmond project is funded by Pew Charitable Trusts.

Further information about Initiative and its initial survey, "Public Sentiment About Biotechnology enhanced Food," is available at

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Effective Apr. 06 - 12, '01

Adjusted World Price, SLM 1 1/16 ..... 37.14 cents*
Coarse Count Adjustment .............. 0.00 cents
Current Step 2 Certificate Value ..... 0.71 cents
Marketing Loan Gain Value ............ 14.78 cents
*No Adjustment Made Under Step 1

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Five-Day Average

Current 3135 c.i.f. Northern Europe ...50.99 cents
Forward 3135 c.i.f. Northern Europe ...52.28 cents
Coarse Count c.i.f. Northern Europe ...48.40 cents
Current US c.i.f. Northern Europe .....53.75 cents
Forward US c.i.f. Northern Europe .....56.00 cents

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