Cotton's Week: January 21, 2005

Cotton's Week: January 21, 2005


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Johanns Confirmed as Ag Secretary

The Senate confirmed Mike Johanns as agriculture secretary, making the former Nebraska governor the first new Cabinet member in President Bush's second term. Johanns, 54, whose nomination was approved unanimously on a voice vote, replaces Ann Veneman, who has been named chief of the United Nations Children's Fund, or UNICEF.

Johanns, who grew up on an Iowa dairy farm, will head the fourth largest Cabinet department, as measured by government spending, with a ’05 budget of $84 billion and a payroll of 113,000 employees. He will manage a wide variety of programs including farm programs, food stamps, food safety and school lunches. The agriculture secretary, who is paid $175,000 a year, also oversees the US Forest Service.

Johanns was expected to meet with senior USDA officials Jan. 21 and on Jan. 24 is expected to meet with reporters for the first time and address employees at the department's headquarters, a spokeswoman said.

The Senate also confirmed Education Secretary Margaret Spellings and plans to confirm Carlos Gutierrez as commerce secretary on Jan. 24 and Condoleezza Rice as secretary of state on Jan. 26.

Importers Group Opposes China Safeguard

The US Assoc. of Importers of Textiles and Apparel (USA-ITA), which filed a lawsuit against the government challenging its authority to consider China safeguard petitions based on threat, filed a legal brief opposing the government’s motion to dismiss the case.

The USA-ITA’s response came as speculation swirled around whether the government would appeal a 2-week old temporary injunction. A Justice Dept. spokesman has repeatedly said over the past 2 weeks that Justice was reviewing whether to file an appeal.

USA-ITA, which represents J.C. Penney and Liz Claiborne, sued 5 federal agencies in the US Court of International Trade in Manhattan on Dec.1, claiming the government violated its own published regulations as well as the Administrative Procedures Act and exceeded its authority over safeguard petitions. The association is seeking a permanent injunction to thwart any action by the federal interagency Committee for the Implementation of Textile Agreements (CITA) to limit the anticipated onslaught of Chinese imports this year based on the threat of harm to the domestic industry.

Senior Judge Richard Goldberg issued a preliminary injunction on Jan. 3 and ordered the Bush Administration to temporarily stop reviewing pending threat-based petitions or accept new petitions. The Justice Dept. argued in its motion to dismiss the case that the court lacks jurisdiction to consider USA-ITA’s complaint because the safeguard petitions under review have not been decided. It also said USA-ITA does not have the right to challenge CITA’s deliberations and has not exhausted the administrative remedies provided by the government to challenge the safeguard petitions.

In December, 5 US textile mills filed an Amicus brief, which argued that enjoining CITA from conducting such investigations would cause irreparable injury, including plant closings and job losses when members of USA-ITA shift their orders for textile and apparel products to China.

China Trade Concessions Sought

On his final trip to China before leaving office, US Commerce Secretary Don Evans urged the Beijing government to take a number of steps to improve its trade relations with the United States. He emphasized the need for China to float its currency, which many US manufacturers, including textiles, see as an unfair trade advantage for its exports undercutting US prices and closing out exports from other countries. Evans called for “free flow of capital, free trade, market-driven and market-determined exchange rates.” He also said he did not think the Chinese government’s plan to impose duties on its textile and apparel exports would do much good as the proposed levies of 3 to 8 cents on the value of products is too small.

“I just don’t think the steps of putting a few cents tax on exports or a few of the other steps discussed are going to have any meaningful impact,” Evans said. China has said it will impose export duties on 148 categories of textile products in a step to offset the impact of the removal of import quotas by World Trade Organization members.

Combest to Address ACP Session

Former House Agriculture Committee Chairman Larry Combest will address producer leadership and guests at the American Cotton Producers (ACP) meeting held in conjunction with the NCC’s Annual Meeting, Jan. 27-31 in Washington, DC - a forum expected to draw 700 industry leaders.

Combest, who is with the consulting firm, Combest/Sell, will share his views on how the 109th Congress will deal with budget reconciliation issues as they pertain to the ’02 farm law. His firm will be assisting the NCC and several other agriculture groups on this difficult policy matter and will help share the groups’ concerns on the need to preserve the current farm law’s integrity.

NCC President/CEO Mark Lange said that protecting US cotton’s interests in the current farm legislation will continue to be a challenge, and the NCC will continue seizing every opportunity to convey to the Administration and to lawmakers just how important that law is to each US cotton producer, to the entire industry’s infrastructure and to the Cotton Belt economy.

“There is concern that when Congress addresses the budget deficit this year, there will again be attempts to compromise farm law,” Lange said. “We will continue to emphasize the fact that farm program expenditures have been under spent by $17 billion during the first three years of the farm bill. We also will remain steadfast in monitoring WTO negotiations to ensure our commodity’s farm program components are not unfairly targeted.”

NCC Chairman Woody Anderson said this year’s actions by Congress and the Administration, as has been the case so many times before, “will affect how our industry can compete in the world marketplace. It is appropriate that some of the convention’s speakers will provide an inside view of Washington politics and describe how business is conducted within the Beltway.”

Those speakers include Sen. Thad Cochran (R-MS), Appropriations Committee chairman; Dr. Larry Sabato, a political analyst and the Robert Kent Gooch Professor of Politics at the U. of Virginia; Communications Strategist Torie Clarke; and Rep. Mike Ross (D-AR), who will address the National Cotton Ginners Assoc. annual meeting.

FSA County Committee Election Guidelines Announced

Ann M. Veneman announced new uniform guidelines for conducting USDA Farm Service Agency (FSA) CountyCommittee elections. The ’02 farm law authorized development of uniform guidelines to govern the FSA County Committee election process. The guidelines are designed to increase the participation of minority and women producers.

"These guidelines reflect months of work by USDA and comments by many minority and producer organizations," Veneman said. "These guidelines are intended to make the election process for County Committees more accessible to all producers, especially minorities and women."

On Aug. 17, ’04, the USDA published a list of proposed guidelines in the Federal Register for public comment. The adopted provisions pertaining to the FSA County Committee election process include:

  • Requires that ballots be mailed directly to FSA state offices to apply only at the request of one candidate, or when the Secretary determines that this procedure is necessary in any specific County Committee area. In all other cases, voters will return their ballots to their respective county offices. Ballot opening and counting will be fully open and accessible to the public, with 10 days advance notice of the date and time of the vote tabulation.
  • If no valid nominations are filed, the Secretary may nominate up to 2 individuals to be placed on the ballot. If the Secretary does not exercise this authority, then the State Committee may nominate up to 2 individuals to be placed on the ballot. If neither the Secretary nor the State Committee chooses to exercise their authority, then the respective CountyCommittee shall nominate 2 individuals to be placed on the ballot.
  • County Committees annually will review the local administrative area (LAA) boundaries to ensure the fair representation of Socially Disadvantaged Producers (SDA) in the area, with sufficient time allowed for public input of proposed LAA boundary changes prior to FSA State Committee review. In specific instances, FSA Headquarters in Washington, DC, may conduct further review of LAA boundary changes if further review is sought by either the public or deemed appropriate.
  • FSA county offices shall actively locate and recruit eligible candidates identified as SDA farmers and ranchers as potential nominees for the County Committee elections using any reasonable means necessary, including the development of partnerships with community based organizations.
  • Allows for the release of voter names and addresses to candidates. All other eligible voters only will be entitled to review a list of the voter names.

FSA will incorporate the new guidelines into regulations governing CountyCommittee elections. Individuals may nominate themselves or others as candidates for seats on County Committees. In addition, eligible candidates can be nominated by any community-based, faith-based or other organizations in the county or area during the nomination period. Groups representing SDA producers will be encouraged to nominate eligible individuals.

Nominations and elections are open to all eligible candidates and voters without regard to race, color, religion, national origin, age, sex, marital status or disability. Eligibility for voting is open to all who demonstrate participation or cooperation in FSA programs and who register at their local FSA Service Center.

Export Sales Report Delayed

Due to the Martin Luther King, Jr. holiday and the Presidential inauguration, the export report originally scheduled for release Jan. 20 will not be released until Jan. 24.  The Jan. 28 Cotton’s Week issue will have the results of 2 weeks of exports.

Prices Effective January 21-27, 2005

Adjusted World Price, SLM 1 1/16

36.89 cents


Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

3.77 cents

Marketing Loan Gain Value

15.11 cents

Import Quotas Open


Step 3 Quotas (480-lb. bales)


ELS Payment Rate

 52.08 cents

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

 51.93 cents

Forward 3135 c.i.f. Northern Europe

 No Quote

Coarse Count c.i.f. Northern Europe

 49.70 cents

Current US c.i.f. Northern Europe

 55.70 cents

Forward US c.i.f. Northern Europe

 No Quote

2003-04 Weighted Marketing-Year Average Farm Price  
Final Marketing Year Average Price

 61.80 cents


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