Cotton's Week: February 28, 2003

Cotton's Week: February 28, 2003

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Payment Limit Commission Seeks Comments

The Commission on the Application of Payment Limitations for Agriculture is seeking comments on the payment limit provisions in the Farm Security and Rural Investment Act of ’02. The Commission, authorized in this bill, is chaired by Dr. Keith Collins, Chief Economist for USDA, and includes appointees from the House and Senate Agriculture committees and the Secretary of Agriculture.

Specifically, the Commission is seeking comments on the impact of further payment limits on farm income, land values, rural communities, agribusiness infrastructure, planting decisions and commodity prices. Additional comments are sought on the feasibility of improving the application and effectiveness of payment limits and the expected response from farmers if more stringent limits are implemented.

The NCC is preparing responses, which are due by March 24. Comments can be mailed to: Payment Limit Commission Comments, USDA/FSA/EPAS, Stop 0508, 1400 Independence Ave., SW, Washington DC 20250-0508, or emailed to payment.limit.comm@wdc.usda.gov. The NCC has posted a PDF file of the Federal Register notice on its site. 



No Immediate Results Reported in US-China TRQ Discussions

US-China discussions, including cotton agricultural tariff rate quota issues (TRQs), have produced no immediate results. However, US officials received a promise from China’s highest political level to deal with the US complaints about the restrictive application of TRQs as well as promise at the staff level to have another meeting on the issue within a matter of weeks.

The first promise reportedly was made to US Trade Representative Zoellick by incoming premier Wen Jiaobao during a Feb. 17 meeting, and the 2nd one was made by a vice minister of trade on Feb. 21. These commitments are counter to the position taken by China’s State Development and Planning Commission (SDPC), which plays an important role in allocating TRQs for agricultural products. SCPC officials had made it clear that they have no interest in changing the current system for allocating TRQs.

These discussions between US and Chinese officials follow complaints that have been lodged by NCC leaders over a period of months, the most recent occurring on Feb. 10 when Bill Dunavant, III, President of Dunavant Enterprises, and Tom Smith, Chairman of AMCOT, met with Ambassador Zoellick to underline the seriousness of the problem for the US cotton industry.



EPA’s Efforts on FIFRA-ESA Gain NCC Support

NCC expressed support for EPA’s efforts to ensure that implementation of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) is in compliance with the requirements of the Endangered Species Act (ESA).

The ESA contains a process that requires consultation between the Fish and Wildlife Service (FWS) or National Marine Fisheries Service (NMFS) and agencies undertaking actions that may affect listed species. A number of lawsuits have been filed alleging that EPA has not consulted with FWS and NMFS, and at least one federal district court has found EPA failed to consult on possible effects of 48 named pesticides on species of salmon. One notice of intent to sue implicates the entire EPA pesticide program.

EPA issued an Advance Notice of Proposed Rulemaking (ANPR) requesting comments on development of a program to ensure implementation of FIFRA is in compliance with the ESA. The NCC has expressed support for development of a timely, predictable process which will ensure that critical crop protection products are available for use according to label instructions developed by regulators and registrants through the registration process. The American Farm Bureau, CropLife and others also are filing detailed comments and will remain involved in the process of developing a formal consultation process.

The NCC and other groups believe the new procedures will benefit the public, farmers, ranchers and registrants and lead to better protection for listed species.



JCIBPC Calls for Study of Specification Review

At its meeting in Memphis, the Joint Cotton Industry Bale Packaging Committee (JCIBPC), chaired by Keith Pendergrass, ginner from Donalsonville, GA, called for the panel’s Executive Committee to study a specifications review process. The initial study, conducted by a special subcommittee appointed at the JCIBPC’s ’02 meeting in Atlanta, covered the committee’s entire program, including the way existing specifications might be modified. The goal of a review is to ensure that all approved materials meet the industry’s current packaging needs.

At this year’s meeting, NCC staff provided the JCIBPC an updated list of approved packaging manufacturers, and the panel agreed that posting the list on NCC’s web site is appropriate. Dale Thompson, the NCC’s manager, marketing and processing technology, also reported that the use of polypropylene and wire remained the predominant bale packaging materials.

For ’03, the JCIBPC approved a plastic strapping system and an automatic wire-tying system. It also approved continued testing of 1) plastic strapping, 2) several woven polypropylene bags and 3) non-woven, 100% cotton bagging (a 200,000-pattern trial).



January Mill Use at 7.35-Million Bale Annualized Rate

Cotton consumption in domestic textile mills for January (5 weeks) totaled 331.1 million pounds for a seasonally adjusted annualized rate of 7.35 million 480-lb. bales, according to the Commerce Department, matching the January ’02 rate. The December (5 weeks) estimate of domestic mill use was lowered by 3.8 million pounds to 297.3 million, for a seasonally adjusted annualized rate of 7.80 million bales.

Using the latest figures from the Commerce Department, calendar ’02 mill use is 3.69 billion pounds or 7.68 million bales, compared with calendar year ’01’s use of 7.99 million bales.

Based on Commerce estimates from Aug. 1, ’02, through Feb. 1, projected total pounds consumed during crop year ’02-03 would be 3.62 billion pounds or 7.54 million bales. USDA’s latest estimate of ’02-03 crop year mill use is 7.6 million bales.



Average Farm Price Information Available on NCC Web Site

Because of a new provision in the Farm Security and Rural Investment Act of ’02 and the use of the season-average farm price for calculating counter-cyclical payments, new information has been added to NCC’s web site. The report is located in the Economics and Prices section of the web site (www.cotton.org).

The report provides background information on counter-cyclical payments, how the season-average farm price is calculated and the relationship between farm price and the New York nearby futures contract. Tables are also included that track farm price and marketings in terms of marketing/crop year.



FSA Says April 1 Deadline for Updating Bases, Yields Won’t Change

USDA’s deadline for updating bases and yields as a part of the new farm legislation is April 1, and farmers missing the deadline may be left out, according to Farm Service Agency (FSA) Administrator Jim Little.

June 1 is the deadline for signing contracts.

Little noted the last time bases and yields were established as part of farm legislation was in 1985. On each farm bill since then, those yields have carried over.

Producers planning to update bases and yields may want to consider using the Base and Yield Analyzer Internet tool available at www.fsa.usda.gov/pas/farmbill/tools.asp. If electing to update yields, producers will be required to provide all production records for ’98-00. For cash-leased land, FSA requires a copy of the lease agreement if available and proof of lease payment. If no written lease agreement is provided, the landowner must sign for zero shares.

Producers who have dropped, added, purchased, sold or otherwise changed their farming operation need to be prepared to report these changes to the FSA office.

Producers must certify any ’02 crop plantings or land use changes not previously reported.



Pesticide, Biotechnology Project Participants Clarified

The report on the Cotton Pesticide Registration and Education Project and the Cotton Biotechnology Registration and Communication Project in the Feb. 21 issue of Cotton’s Week transposed the participating companies. Cotton Foundation members contributing equally toward the cost of the pesticide registration project with the NCC are Bayer CropScience, Dow AgroSciences LLC, Monsanto Co., Syngenta Crop Protection and Valent USA. The six Cotton Foundation members contributing equally to defray biotechnology project costs with the NCC are Bayer CropScience, Delta and Pine Land Co., Dow AgroSciences LLC, Monsanto Co., Stoneville Pedigreed Seed Co. and Syngenta Crop Protection.



Still Time to Provide Census Data

USDA’s National Agricultural Statistics Service (NASS) says ’02 Census of Agriculture response rates are lagging, but producers still have time to return their forms. To get a time extension, more information or assistance in completing census forms, producers may call 1-888-4AGSTAT (424-7828).

Every 5 years the census gathers data that 1) provides information for local and state agricultural investment decisions, 2) helps local, state and national representatives and agencies make informed agricultural policy decisions, 3) helps the US compete for its share of the global agriculture market and 4) ensures quick access to vital local statistics in the event of a natural disaster or possible homeland security threat.



’03 Cotton Town USA Applications Now Available

For the 2nd year, the Cotton Town USA program will support local communities that rely on cotton production as a cultural and economic cornerstone. The program is part of Cotton Counts, a NCC consumer awareness campaign aimed at improving the understanding of and attitudes toward US cotton. That effort is supported by a Bayer CropScience grant to The Cotton Foundation.

The Cotton Town USA program awards $10,000 grants to 3 towns that demonstrate in their application essay how they would use the money to support a community improvement project. Last year, Floydada, TX, Stamford, TX, and Dermott, AR, were chosen from more than 80 applicants.

For more information on the program and/or to obtain an application, contact www.cottonexperts.com or call 630-505-1100. Applications must be submitted by July 1, and winners, chosen from a panel consisting of National Cotton Women’s Committee and industry representatives, will be announced in November.



Cotton Registers Stronger Export Sales Week

Net export sales for the week ending Feb. 20 were 284,200 bales (480 lb.), almost 28% higher than the previous week, producing total ’02-03 sales of almost 9.3 million bales. Total sales at the same point in the ’01-02 marketing year were approximately 10.6 million bales. New crop (’03-04) sales are 625,100 bales.

Shipments for the week were 183,500 bales, bringing total exports to date to 5.2 million bales, down from 6.0 million at the comparable point in the ’01-02 marketing year.



Prices Effective February 28-March 6, 2003

Adjusted World Price, SLM 1 1/16         46.38 cents*
Coarse Count Adjustment                  0.00 cents
Current Step 2 Certificate Value         5.83 cents
Marketing Loan Gain Value                5.62 cents
Import Quotas Open                                 4
Step 3 Quotas as of 1/31(480-lb.s bales)    437,672 

* No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. Northern Europe     59.42 cents
Forward 3135 c.i.f. Northern Europe       No Quote
Coarse Count c.i.f. Northern Europe     55.44 cents
Current US c.i.f. Northern Europe       65.25 cents
Forward US c.i.f. Northern Europe          No Quote


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