Cotton's Week: January 30, 2004

US cotton producers intend to plant 14.76 million acres of cotton this spring, up 9.5% from ’03, according to the NCC’s 21^st Annual Early Season Planting Intentions Survey.

Upland cotton intentions are 14.55 million acres, an increase of 9.3% from ’03 plantings of 13.30 million acres. Extra long staple (ELS) intentions of 212,000 acres represent an 18.6% increase. The results were announced at the NCC’s 65^th Annual Meeting in New Orleans.

With average abandonment, total upland and ELS harvested area would be about 12.94 million acres. Applying each state’s trend yield to its ’04 projected harvested acres generates a crop of 18.50 million bales, 17.93 million bales of upland and 561,000 bales of ELS cotton. This compares to ’03’s total production of 18.22 million bales, according to USDA’s January estimate.Cottonseed production for ’04 is projected at 6.78 million tons, up from 6.69 million last year.

The NCC survey was mailed in mid-December to about one-third of the cotton producers across the US.

Dr. Gary Adams, the NCC’s vice president of economics and policy analysis, said as growers consider their ’04 planting decisions, they are comparing prices for cotton, corn and soybeans that are substantially higher than the loan value.

“In fact, as growers enter the coming season, prices are at their highest levels since the beginning of the ’98 planting time,” Adams noted. “Final acreage decisions will be based on expected returns of cotton and competing crops, but also must take into account agronomic considerations such as crop rotation.”

The NCC joined a number of textile and fiber organizations in the adoption of several trade priorities that will be communicated to the Administration, Congress and all candidates for public office during ’04. The action was taken during a Jan. 29 meeting of textile, fiber and other manufacturing principals in Greenville, SC.

NCC Chairman Bobby Greene said, “This recent action is essentially a reaffirmation of the policy priorities supported by a broad textile/fiber coalition during ’03, which continues to have a strong focus on China and its use of currency manipulation, non-performing loans and other unfair trade practices to maintain international market dominance. Recognizing China’s capacity to produce textiles, apparel and other manufactured goods, we think it is very important for the US to continue to make timely use of World Trade Organization (WTO) China textile safeguards.

“It would be even more beneficial to both countries to engage Chinese officials in bilateral negotiations on an agreement to ensure Chinese textile imports do not cause serious market disruption that require repeated use of the WTO textile safeguard provisions. If we cannot find a way, through comprehensive agreements and retention of US textile tariffs, to hold Chinese imports to a reasonable level, there will be no way to retain a viable US textile industry and enter into meaningful agreements with other trading partners.”

NCC President and CEO Mark Lange said, “Trade issues remain at the very top of our agenda, along with farm policy. The scheduled removal of textile quotas at the end of this year assures that imported apparel and home products will continue to capture ever larger shares of the US consumer market. A recently completed NCC study indicates that the only realistic way for us to underpin the US fiber and textile industries is to influence the source of textile product imports which, in turn, bears on the source of their textile and fiber content.”

Lange said US dependence on its Western Hemisphere neighbors for cut-and-sew operations is already extensive and will continue to grow. “Of the 6.5 million bales of cotton currently consumed by US mills, more than 4.5 million is accounted for by yarns, fabrics or components that are shipped to neighboring countries for one or more manufacturing steps before returning to the US retail market.” The study suggests that within 4 years less than 1 million bales of US mill cotton consumption will be entirely US “dirt-to-shirt,” Lange said.

Chairman Greene said, “This understanding of the vital role of international trade to the future of the US cotton industry explains the priority we place on trade policy as well as our interest in maintaining dialog with the Administration and Congress on trade matters.”

The coalition “platform” calls on candidates for office to: commit to the continuation of quota restraints on Chinese imports of textiles and apparel; support enhancements to an extension of the Berry Amendment and other federal buy-American purchase requirements; opposefree trade agreements that contain unnecessary loopholes to the requirement to use signatory country fiber, yarn, thread, fabric and fabric dyeing, finishing and printing; oppose any reduction of US textile and apparel tariffs through the WTO and any weakening of US trade laws regarding unfair trade practices; and supportfull enforcement of US trade laws to aggressively address illegal trade activities and remedy violations.

Domestic textile mills consumed 253.1 million pounds of cotton in December (5 weeks) for a seasonally adjusted annualized rate of 6.62 million 480-lb. bales, according to the Commerce Department. Last year’s December annualized rate was 7.80 million bales.

The November (4-week month) estimate of domestic mill use of cotton was lowered by 2.5 million pounds to 233.4 million. The revised seasonally adjusted annualized rate of consumption for November is 6.57 million compared to last year’s November rate of 7.61 million bales.

Using the latest figures from the Commerce Department, calendar ’03 mill use is estimated to be 3.29 billion pounds or 6.85 million bales. This is down from calendar year ’02’s use of 7.67 million bales.

Based on Commerce estimates from Aug. 1-Jan. 3, projected total pounds consumed during crop year ’03-04 would be 2.96 billion pounds or 6.17 million bales. USDA’s latest estimate of ’03-04 crop year mill use is 6.2 million bales.

Preliminary January domestic mill use of cotton and revised December figures will be released by the Commerce Department Feb. 26.

David Stanford, a cooperative official from Lubbock, TX, was elected president of Cotton Council International (CCI) for ’04. He was named during CCI’s board meeting at the NCC Annual Meeting in New Orleans.

Stanford, who is vice president of the Marketing Division at Plains Cotton Cooperative Assn., also serves on the boards of the NCC, the American Cotton Exporters Assn., the Texas International Cotton School and The Seam. He succeeds Robert A. Carson, Jr., a producer from Marks, MS. Carson becomes CCI board chairman, succeeding William B. Dunavant, III, a merchant from Memphis, TN.

Other CCI officers elected for 2004 are: 1st vice president Gary W. Taylor, merchant, Cordova, TN; 2^nd vice president David L. Burns, producer, Laurel Hill, NC; and treasurer Michael M. Adams, cooperative official from Greenwood, MS. Mark D. Lange of Memphis, TN, was elected secretary and Allen A. Terhaar of Washington, DC, was re-elected assistant secretary.

CCI elected 5 new directors for ’04: David L. Hand, cooperative official, El Paso, TX; R. Dale Grounds, merchant, Richardson, TX; William G. Winburne, merchant, Phoenix, AZ; Mark D. Williams, producer, Farwell, TX; and Clyde T. Sharpe, producer, Yuma, AZ.

Re-elected directors include: Robert W. Norris, cooperative official, Bakersfield, CA; Gail Kring, crusher, Lubbock, TX; Thomas S. (Sid) Brough, ginner, Edroy, TX; Robert W. Glassman, ginner, Fresno, CA; Jerry D. Rowland, manufacturer, Winston-Salem, NC; Eduardo L. Esteve, Jr., merchant, Dallas, TX; Rodger C. Glaspey, merchant, Fresno, CA; Adolph Weil, III, merchant, Montgomery, AL; Cliett A. Lowman, III, producer, Kingsville, TX; Larry R. McClendon, producer, Marianna, AR; Ted D. Sheely, producer, Lemoore, CA; Vance C. Shoaf, warehouseman, Milan, TN; Owen J. (Trey) Hodges, III, manufacturer, Columbus, GA; Lawrence E. Starrh, producer, Shafter, CA; James L. Webb, producer, Leary, GA; and Lonnie D. Winters, cooperative official, Lubbock, TX.

The House Agriculture Committee reviewed the potential impact of recent temporary guest worker proposals on the agriculture sector in a hearing that included witnesses representing the major sectors of the industry and those concerned with US immigration policy.

In speaking of the current H-2A temporary agricultural visa process, Committee Chairman Goodlatte (R-VA) said, “ … I hear first-hand from producers who have to deal with a costly, time-consuming and flawed program. Many producers simply cannot afford the time and cost of complying with the H-2A program. However, in order to find and retain the legal workers these employers depend on for the viability of their operations, they have no alternatives.”

Goodlatte has introduced HR 3604, the Temporary Agricultural Labor Reform Act, a bipartisan bill that will reform the H-2A guest worker program. Ranking Member Stenholm (D-TX) also was an original co-sponsor of the legislation, along with 32 other Members of Congress.

Goodlatte said the bill would encourage illegal farm workers to participate legally in the guest worker program. Potential workers would be required to return to their home countries and apply for the program legally from there. “This would both provide a legal, temporary workforce that employers can call on when insufficient American labor can be found, and help ensure that those temporary workers entering the country are not threats to our national security.”

President Bush recently announced a proposal for reforming US immigration laws. The plan outlined a temporary worker program but also included more far-reaching reforms to the entire US immigration system.

US cotton producers intend to plant 14.76 million acres of cotton this spring, up 9.5% from ’03, according to the NCC’s 21^st Annual Early Season Planting Intentions Survey.

Upland cotton intentions are 14.55 million acres, an increase of 9.3% from ’03 plantings of 13.30 million acres. Extra long staple (ELS) intentions of 212,000 acres represent an 18.6% increase. The results were announced at the NCC’s 65^th Annual Meeting in New Orleans.

With average abandonment, total upland and ELS harvested area would be about 12.94 million acres. Applying each state’s trend yield to its ’04 projected harvested acres generates a crop of 18.50 million bales, 17.93 million bales of upland and 561,000 bales of ELS cotton. This compares to ’03’s total production of 18.22 million bales, according to USDA’s January estimate. Cottonseed production for ’04 is projected at 6.78 million tons, up from 6.69 million last year.

The NCC survey was mailed in mid-December to about one-third of the cotton producers across the US.

Dr. Gary Adams, the NCC’s vice president of economics and policy analysis, said as growers consider their ’04 planting decisions, they are comparing prices for cotton, corn and soybeans that are substantially higher than the loan value.

“In fact, as growers enter the coming season, prices are at their highest levels since the beginning of the ’98 planting time,” Adams noted. “Final acreage decisions will be based on expected returns of cotton and competing crops, but also must take into account agronomic considerations such as crop rotation.”

SOUTHEAST                           3,038                 3,102                2.1%AL                                      525                   640                21.8%FL                                        94                    78              -16.9%GA                                   1,300                1,221                -6.1%NC                                      810                  840                  3.7%SC                                      220                  234                  6.2%VA                                        89                   90                  1.2%
MID-SOUTH                            3,575                  3,945                   10.3%AR                                       980               1,141                 16.4%LA                                       525                  630               20.0%MS                                    1,110               1,172                   5.6%MO                                       400                 411                  2.8%TN                                        560                 591                  5.5%SOUTHWEST                             5,870                 6,621                  12.8%KS                                          90                 130               44.4%OK                                        180                 169                -6.1%TX                                      5,600               6,322                 12.9%WEST                                             821                     879                      7.0%AR                                         215                 243                 12.9%CA                                         550                 562                   2.2%NM                                          56                  74                 31.5%
TOTAL UPLAND                       13,304                14,546                       9.3%
TOTAL ELS                                     179                      212                    18.6%AZ                                             3                      5                 83.3%CA                                          150                  185                 23.0%NM                                             6                     6                   5.6%TX                                            20                   16                 -20.3%
ALL COTTON                              13,483               14,759                         9.5%