Cotton's Week: June 4, 2004

Cotton's Week: June 4, 2004

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NCC to Participate in USDA West African Forum

USDA Secretary Ann Veneman announced details for a regional science and technology ministerial conference June 21-23 in Burkina Faso for 15 West African countries. Co-hosted by USDA and the Burkina Faso government, the conference will build on the Ministerial Conference on Agricultural Sciences and Technology held June '03 in Sacramento.

This conference is an opportunity to share information on technologies, policies and partnerships to increase agricultural productivity in West Africa, Veneman said.

Under Secretary J.B. Penn will lead the US delegation, which includes NCC Chairman Woody Anderson. Anderson has been invited to chair a conference session and will visit the cotton producing area of Burkina Faso to meet local cotton industry leaders. His participation will build on contacts made when Malis Minister of Industry and Trade met NCC leaders in New Orleans at the annual meeting.

In July, at the invitation of NCC, a delegation of West African ambassadors and agriculture ministers, accompanied by USDA and USAID officials, will visit US cotton production, research and promotion facilities to continue the dialogue between West African and US industries designed to identify issues of mutual interest.





Arizona Growers Approve Pink Bollworm Eradication Plan

A majority of Arizona's cotton farmers approved a statewide referendum to approve a proposed pink bollworm eradication program. Of the 655 farmers growers who returned ballots, 79% voted for the program. The 655 growers who voted represented 72% of the possible 910 cotton producers. On the acreage vote, 59% of the voting acreage voted "for" with 51% required for passage.

The passed referendum placed Arizona in a position to move forward with the first phase of the program in '05 if Congress provides finding for the sterile moth program. Funding to trap and treat for pink bollworms throughout Arizona will come from a $32 per acre assessment for growers who are not growing Bt cotton. If a grower plants Bt cotton, he will not be assessed. The technology used to eradicate the pink bollworm will include mapping and trapping, transgenic Bt cotton, pheromone application for mating disruption, and sterile pink bollworm moth releases.

The programs first phase, which began in '02 in far West Texas, in Mexico's Chihuahua State and in south central New Mexico, has reduced pink bollworm populations across this region by about 90%.

Congressional funding is necessary for Arizona to begin an eradication program and is critical for growers in New Mexico, Texas and Northern Mexico to continue with eradication that began in '02. The sterile pink bollworm moths would be reared in a facility in Phoenix operated by California cotton growers.

The US cotton industry is asking Congress for $7.8 million to provide funding for pink bollworm programs. If Congress provides the money, the Arizona program would start next season in eastern Arizona, moving westward.

When Arizona completes its eradication effort, a maintenance program like the one in the San Joaquin Valley would cover about 500,000 cotton acres from Texas to Southern California.





Agriculture Census Data Released

USDA's National Agricultural Statistics Service (NASS) released final data from the '02 Census of Agriculture.

The data released provides consistent and detailed production, economic, demographic and environmental data at the national, state and county level. The census data can be found on NASS's web site at www.nass.usda.gov/census/. Published tables will be available as PDF, CSV and TXT files.





Legislation Introduced to Replace ETI

Foreign Sales Corp. (FSC)/Extraterritorial Income (ETI) Act legislation necessary to repeal programs ruled as illegal subsidies by the WTO in '02 - and which have subjected US exports to countervailing - duties was to be introduced by Ways and Means Committee Chairman Thomas (R-CA) on June 4 and marked up by that panel on June 10. House Majority Leader DeLay (R-TX) indicated he wants to schedule House action the week of June 14. The Senate passed its bill (S. 1637) by a 92-5 vote May 11.

Both bills would replace ETI with a mixture of tax cuts for US manufacturing operations and international tax reforms to assist overseas operations of US multi-nationals. The Senates version allows US firms expanded deductions, while the House is expected to propose an across-the-board rate cut. Reports indicate the House bill will: 1) provide a 3-year transition for the repeal of the FSC/ETI in a tax rate reduction of 3% (from 35% to 32%) for manufacturing operations; 2) include a provision to reduce double-taxation of US-based companies; 3) provide an extension of expiring provisions including the R&D tax credit; 4) allow taxpayer to choose to deduct either state income or sales tax for 2 years; and, allows corporate income earned abroad to be repatriated at a rate 5.25% for 1 year provided the income remains in the US and 5) provides a $10 billion tobacco buyout bill paid for by an extension of the customs user fee.

The legislation will include several revenue raisers to offset costs, but still is expected to cost $25 billion over 5 years and $34 billion over 10 years.





FSA to Launch Electronic Redemption System

USDA’s Farm Service Agency (FSA) will launch the new Centralized Cotton Redemption (CCR) system on July 1, ’04. CCR is an optional electronic method for merchants to redeem upland cotton from loans disbursed by FSA county offices. This process provides the capability of redeeming bales selected from multiple loans in multiple counties in a single, electronic transaction. Payment to the Commodity Credit Corp. (CCC) is made in a single wire transfer of funds based on a CCC electronic invoice for all bales selected by the merchant for redemption. 

CCR also uses the new Electronic Agent Designation (EAD), an electronic CCC-605. With a single signature on the new version of the CCC-605, the producer authorizes an agent to use CCR. This authorization must be provided to the administrative county office so that the bales can be identified as CCR eligible. This paper, CCC-605, is then converted to an EAD when the merchant requests the provider to update the EWR record with the agent’s Holder ID. The merchant who first requests the conversion to EAD retains the paper copy of the CCC-605. The EAD is passed to subsequent agents electronically by updating the EAD Holder ID. Merchants must register as a user of CCR.

This sign-up process can take a minimum of 2 weeks. The buyer signup process may be accessed on the Cotton Online Processing System (COPS) at www.fsa.usda.gov/cotton/. The link is located under the Information tab. If a merchant does not have a COPS User ID, the site may be accessed by signing on as a guest.





Leadership Program Looking for Applicants

NCC will continue to take applications through July 1 from qualified US industry members seeking entry to the ’04-05 Cotton Leadership Class. Those interested in applying can visit the Cotton Leadership Program’s web site at http://leadership.cotton.org to review the program curriculum, eligibility requirements and download the application. The site also includes a contact form which allows users to submit questions, request information and schedule a personal visit with local program alumni.

The program, which is supported by a grant to The Cotton Foundation from DuPont Crop Protection, seeks to identify potential industry leaders and provide them developmental training. During 5 sessions of activity across the Cotton Belt, class participants visit with industry leaders and observe production, processing and research. They also attend the NCC’s annual and mid-year directors’ meetings and visit with lawmakers and government agency representatives in Washington, DC.

The ’03-04 class will visit the nation’s capital the week of June 7. They will meet top Administration officials during visits to USDA, EPA and the White House Executive Office complex. They also will meet their Senators and Representatives and their staff, hold a roundtable discussion with the Senate's Historian and receive briefings from the staff leaders of the House and Senate agriculture committees’ staff leaders.





EPA Panel to Review Refuge, WideStrike

EPA will hold a Scientific Advisory Panel (SAP) for the registration of WideStrike and to review the 95/5 external unsprayed refuge program for Bt cotton.

In the June 8-10 meeting, the panel will review the ecological, human health and environmental risks to registering Dow AgroSciences’ WideStrike cotton, which contains the Cry1F and Cry1Ac proteins designed to reduce worm damage in cotton. The panel also will review the 95/5 external unsprayed refuge option that EPA believed was not effectively preventing resistance management. As a condition for re-registration of Monsanto’s Bollgard cotton in ’01, EPA requested that Monsanto obtain data to provide justification for continuation of this refuge option for Bt cotton. Specifically, the panel will review the impacts of the utilization of alternate hosts as natural refuge, insecticidal overspray impacts and north-south reverse migration of lepidopteron moth flights.

While the majority of cotton producers are believed to use the 80/20 or 95/5 embedded refuge program options, the 95/5 external program is important to cottonseed producers, and is another option for producers to use if they choose.

The NCC has been active in soliciting nominees to sit on this panel, and has been in contact with EPA and biotech companies to help formulate a position for defending cotton growers’ current refuge options.





EU Ends Moratorium with Acceptance of Bt 11

European Union (EU) approval of a biotech sweet corn variety for consumption there proclaimedmarked an end to the de facto 6-year moratorium on the regulatory approval of biotech crops in Europe.

The product, Bt 11, produced by Syngenta, is the first biotech product to be granted a regulatory approval since ’98. The approval was for the import of the sweet corn for human consumption, but is still being denied for cultivation in the EU.

Many European lawmakers and interest groups have called for an end to the US’ WTO case launched against the EU in June ’03. It accused the European moratorium of being a non-tariff trade barrier, thus violating WTO rules. However, many in the US government see no changes in the Europeans’ positions with the implementation of new legislation designed to allow imports of biotech foods to resume so long as they meet the strict tracing and labeling requirements mandated under EU 1829/’03. This legislation creates restrictions on biotech trade that are almost as restrictive as the moratorium itself. Cottonseed products made from biotech cotton will fall under these regulatory rules once approved and require documentation of their exact origins. With no perceived changes in the EU’s willingness to accept biotechnology or provide reasonable justification for refusing imports of these products, the US government is, at this point, not willing to drop its case.

Through coalition efforts, the NCC is supporting the US position against this unfair trade practice, and continues to work with industry to ensure fair trade of cotton and cotton products.





Shipments Stay Healthy

Net export sales for the week ending May 27 were 160,800 bales (480-lb.), resulting in total ’03-04 sales of almost 13.9 million. Total sales at the same point in the ’02-03 marketing year were about 12.5 million bales. Total new crop (’04-05) sales are 1.7 million bales. Shipments for the week were 380,600 bales, bringing total exports to date to 11.0 million bales, ahead of the 9.4 million at the comparable point in the ’02-03 marketing year.


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Prices Effective June 4-10, 2004

Adjusted World Price, SLM 1 1/16

51.07 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

4.90 cents

Marketing Loan Gain Value

0.93 cents

Import Quotas Open

3

Step 3 Quotas (480-lb. bales)

 362,899

ELS Payment Rate

26.69 cents

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

67.91 cents

Forward 3135 c.i.f. Northern Europe

65.34 cents

Coarse Count c.i.f. Northern Europe

63.23 cents

Current US c.i.f. Northern Europe

72.81 cents

Forward US c.i.f. Northern Europe

64.63 cents

 
2003-04 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-April)

62.67 cents

**

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



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