Cotton's Week: August 29, 2003

Cotton's Week: August 29, 2003

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Unjustified Criticism Expected to Intensify

During the first week of September leading up to the World Trade Organization Ministerial in Cancun, Mexico, the familiar attacks on the US cotton program are expected to intensify, according to NCC President Mark Lange.

"A flurry of media attention from journalists and broadcasters suggests that the attacks on our cotton program are being orchestrated in an effort to single out cotton from the rest of agriculture for an early phase-out of domestic support and export credit assistance," Lange said.

As a result, NCC is working with the Office of the US Trade Representative and members of Congress who will be in Cancun to ensure that agricultural provisions are negotiated in a package, that the Doha Round is completed on schedule and that no commodity is singled out of the agriculture program for unfair treatment.

Lange said, "NCC staff is providing US officials with information to counter the persistent misrepresentations of the US cotton program."



NCC Trade-Related Action Alert Remains Active

In an Action Alert dated Aug. 6, NCC leaders were asked to contact their respective Congressional delegations to urge them to sign a letter to President Bush requesting that the Administration take 3 specific China-related actions: (a) initiate the China textile safeguard, (b) reject any tariff preference levels in the Central American Free Trade Agreement and other free trade agreements and (c) maintain US textile tariffs in the Doha Round of trade talks.

Chairman Bobby Greene said, "It is important that both the House and Senate letter have a large number of signatures by Cotton Belt and textile area members." Congress returns to Washington the first week of September. The Action Alert, a copy of the letter for which signatures are requested and information about how to contact each member can be found in the members only section of the NCC’s web site - www.cotton.org/membersvcs/safeguard.cfm.



July Mill Consumption Annualized at 7.05 Million Bales

Cotton consumption in US textile mills for the 4 weeks of July was 225.6 million pounds, for a seasonally adjusted annualized rate of 7.05 million 480-lb. bales, according to the Commerce Department. Last year’s July annualized rate was 8.7 million bales. Commerce also raised the 5-week June estimate 1 million pounds to 307.4 million, resulting in a seasonally adjusted annualized rate of consumption of 6.64 million bales against last year’s June annualized rate of 7.94 million bales.

The Commerce Department’s estimate of both upland and ELS consumption of cotton by US mills, when adjusted to represent the complete ’02-03 crop year, is approximately 7.2 million bales. This level of mill use, when combined with an export number of approximately 11.9 million bales, would imply ending stocks of 5.6 million bales for the ’02-03 crop year, slightly higher than Commerce’s estimate of 5.5 million bales for stocks on hand. USDA’s August estimate of ending stocks was 5.5 million bales. USDA’s next supply and demand estimates are scheduled for release Sept. 11.



Mississippi Regions Fall Short in Eradication Vote

A follow-up referendum was held to continue the Boll Weevil Eradication Program in 2 regions of Mississippi, with a two-thirds majority needed for passage.

The Mississippi Boll Weevil Management Corp. reported that 861 eligible ballots were cast in the repeat referendum by growers in the region 1A counties of Leflore, Quitman, Sunflower, Tunica and west Tallahatchie, with 65.95 percent favoring the program.

Growers in the Region 1B counties of Bolivar, Coahoma and Washington cleared the two-thirds requirement, with 68.85% approving the referendum.

John Swayze of Benton, MS, president of the Mississippi Boll Weevil Management Corp. board, said the board is reviewing all options for future actions. "We are committed to eradicating boll weevils in Mississippi," Swayze said. "We believe it is essential for keeping our costs down and our state competitive with other areas that are weevil free."



Gins, Warehouses Reminded to Protect PBI Tag

As the ’03 harvest season approaches and demands are put on the receiving and shipping of cotton bales, the bale tag subcommittee of the Joint Cotton Industry Bale Packaging Committee issued a reminder to gins and warehouses concerning the visibility and readability of the Permanent Bale Identifier (PBI) tag.

Subcommittee Chairman Shane Stephens, Greenwood, MS, cooperative official, pointed out that domestic mills rely on a machine-readable PBI tag to manage bale receiving and laydown.

"Problems can occur when the tags are removed or covered when bales are readied for shipment," Stephens said. "For that reason, gins are reminded to make sure tags are affixed in a permanent manner and the identifier number is not obscured.

"Similarly, because of the importance to customers of the PBI tag, warehouse shipping crews should make every effort to keep the PBI tag visible and machine-readable even if the warehouse uses an internal warehouse bale number."



CCI Receives $3.36 Million in Market Development Funds

USDA announced allocation of its FY03-04 Foreign Market Development funds, with Cotton Council International receiving $3.36 million, an increase of 10% over the previous year.

The funds, available Oct. 1, will be directed to market development activities in priority markets for US cotton fiber, including China, South Asia, Thailand, Vietnam, Indonesia, Turkey and Mexico. Funds also will be used to support US-manufactured cotton product promotion in the Caribbean Basin and Andean regions.



India Delegation Concludes US Trade Mission

Cotton Council International (CCI) took an optimistic view about future US cotton purchases as the members of an Indian Special Trade Mission concluded their US tour. Team members said they expect insights gained into the US cotton production and marketing system to strengthen the US cotton position in the Indian market. CCI anticipates signing new COTTON USA licensees and Cotton Gold Alliance partners in the wake of the tour.



SJV Farmers, USDA Launch Air Quality Improvements Initiative

San Joaquin Valley Farmers and USDA’s Natural Resources Conservation Service (NRCS) are partnering on a new air quality initiative that includes newer diesel engines, conservation tillage, chipping farm wastes in lieu of burning and treating rural roads to reduce dust. Collectively these practices are estimated to result in a 723-ton reduction in particulates that could otherwise result in PM-10, a type of air pollution.

Funded through NRCS’ Environmental Quality Incentives Program (EQIP), the air quality effort began in ’98 with just $294,000 and 35 cooperating farmers. This year, the program will involve 510 farmer contracts and $5.5 million of EQIP funds. This is the 6th year for the air quality effort, and the project was able to expand its scope due to last year’s reauthorization and expansion of EQIP, a part of the ’02 farm bill.

"Despite the greatly expanded resources, however, there were still twice as many EQIP applications for air quality assistance as available funds could accommodate," said Roger Isom of the California Cotton Ginners and Growers Assn. "This clearly indicates a huge willingness among Valley farmers to participate in a voluntary, collaborative process."

New aspects of the air quality program include incentive funds for conservation tillage to reduce trips across the field and also funds to replace older diesel engines with newer, more efficient and cleaner burning ones.



California Announces Pink Bollworm Rule Change

Cotton producers in California’s San Joaquin Valley will be allowed to forego burial of shredded, uprooted cotton stalks in response to growers wanting to lower costs through reduced or minimum tillage because of a change in the pink bollworm program announced by the California Pest Control Board.

Jim Rudig, director of the grower-funded pink bollworm program within the California Department of Food and Agriculture, said the pest control board and program managers considered changes in the crop destruction scenario at the request of producers who are looking at ways to reduce costs.

Growers must still shred and uproot cotton stalks after harvest, but with a permit from their local county commissioner, they can bypass burying shredded residue. Relaxing crop burial rules could save up to three passes across a field.

Rudig said concerns about air pollution restrictions on agriculture and by allowing growers to make fewer passes could have an impact on PM10 emissions. Plus, he said, widespread use of Bt cotton in Southern California has lowered the threat of pink bollworms moving into the San Joaquin Valley.

The rules will be relaxed on a yearly, permitted basis and any native pink bollworm finds in the reduced-tillage area will result in revocation of the permit for not only that field and section but adjoining sections as well.



NASS Plans Agricultural Resource Management Survey

Cotton is one of 5 crops included in the Agricultural Resource Management Survey on production practices and costs conducted by USDA’s National Agricultural Statistics Service (NASS).

The survey gathers information on crop production practices, chemical applications and pest management practices from October through December. According to NASS, results will help in the development of agricultural production practices that improve productivity for farm operations and ensure a safer, cleaner working environment.

Survey responses are confidential.



Shipments Continue to Exceed Previous Year

Net export sales for the week ending Aug. 21 were 108,400 bales (480-lb.), resulting in total ’03-04 sales of over 3.3 million bales. Total sales at the same point in the ’02-03 marketing year were approximately 3.9 million bales. Total new-crop (’04-05) sales are 93,000 bales (480-lb.).

Shipments for the week were 136,100 bales, bringing total exports to date to 701,000 bales, ahead of the 490,400 bales at the comparable point in the ’02-03 marketing year.



Prices Effective August 29-September 4, 2003

Adjusted World Price, SLM 1 1/16

46.76 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

2.36 cents

Marketing Loan Gain Value

5.24 cents

Import Quotas Open

 0

Step 3 Quotas (480-lb. bales)

 0

*No Adjustment Made Under Step I
 
Five-Day Average
 
Current 3135 c.i.f. Northern Europe

60.20 cents

Forward 3135 c.i.f. Northern Europe

 No Quote

Coarse Count c.i.f. Northern Europe

58.88 cents

Current US c.i.f. Northern Europe

62.56 cents

Forward US c.i.f. Northern Europe

 No Quote

 
Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-June)

42.87 cents

**

**August-July average price used in determination of counter-cyclical payment

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