Farm Law Implementation Continues

'14 Cotton Loan Rate Differentials Announced

Modest Costs Claimed of Worker Protection Rule

More Protections Sought for Lesser Prairie Chicken

Brand/Retailer Leadership Summit Praised

Global Textile Industry Meets in Hong Kong

Sales Steady, Shipments Strong

USDA continues to move forward with activities to implement The Agricultural Act of 2014 as the Farm Service Agency (FSA) issued a number of notices related to the new law's implementation.

The Agriculture Secretary announced the start of sign-up for the renewed livestock disaster assistance program. The FSA issued notices to its state and county offices about the 2012 SURE Program sign-up and payment eligibility and payment limitation provisions. USDA also released the schedule of cotton loan premium and discounts for the '14 crop (see next story). The base loan was announced on Feb. 18.

Notice SURE-37 advised offices to prepare for sign-up beginning in May and confirmed that the qualifying loss for SURE, based on the '08 farm law, requires a loss of at least 10% on one crop of economic significance on a farm that is either: 1) located in a disaster county; or 2) if not located in a disaster county or contiguous county, has a loss greater than or equal to 50% of normal production on the farm (expected revenue for all crops on the farm) due to disaster conditions.

Notice PL-260 provides instructions to offices regarding implementation of the new payment limitation and adjusted gross income test provisions of the '14 farm bill. The notice confirms that actively engaged in farming determination requirements are not changed for '14 crops. The date for determination of ownership interest is June 1 and will be used for direct attribution for the entire program year. Substantive change must be bona fide and substantive, and an increase in base acres in the farming operation of 20% from the previous year will qualify for an addition of one person or legal entity unless the state office determines the change qualifies for more than one addition. The transfer of land or equipment also can meet the requirement if certain conditions are met.

The notice specifies that all farm operating plans currently on file are continuous and remain effective for '14 unless revised. The notice provides instructions for applying the revised three-year average adjusted gross income test of $900,000 and provides a table of payment limitations for '14-18. The limitation per legal entity for the ARC, PLC, LDP and MLG programs is $125,000 and there is a separate limitation for peanuts. The new cotton transition payment is subject to a separate $40,000 limitation. There is a new form (CCC-941) that is required for certification of adjusted gross income and consent to disclose tax information.

USDA's Farm Service Agency (FSA) announced the '14 crop loan rate differentials for upland and extra-long staple (ELS) cotton on April 15. On April 16, a revised version of the '14 crop loan rate differentials was re-released due to errors on page 3 of the '14 loan schedule. The revised tables of those loan rate differentials are available on the FSA website at http://go.usa.gov/2Vp. The '14 loan schedule also is posted in the Economics section of the NCC website, www.cotton.org.

The differentials, also referred to as loan rate premiums and discounts, have been calculated based upon market valuations of various cotton quality factors for the prior three years. The Commodity Credit Corp. (CCC) adjusts cotton loan rates by these differentials so that cotton loan values reflect the differences in market prices for color, staple length, leaf, extraneous matter, micronaire, length uniformity and strength.

The '14-crop differential schedules are applied to loan rates of 52.00 cents per pound for the base grade of upland cotton and 79.77 cents per pound for ELS cotton. The loan rate provided to an individual cotton bale is based on the quality of each individual bale as determined by the USDA Agricultural Marketing Service's classing measurements.

Speaking to a conference of the crop protection industry, William Jordan, deputy director for programs at the EPA's Office of Pesticide Programs, said the agency's proposed revisions to its worker protection standard would result in "fairly modest" cost increases for industry that would be outweighed by the benefits of reducing pesticide exposures.

The worker protection standard proposal, released in February, would increase the frequency of mandatory training from once every five years to annually, prohibit children under the age of 16 years from handling pesticides, establish no-entry buffer areas surrounding pesticide-treated fields to prevent exposure, and expand safety training.

Jordan said the agency estimates that the proposed rule to update the worker protection standard would cost nationally between $62 million and $73 million annually – with the cost to large farms approximately $340-400 per year and small farms $130-150 per year.

EPA is estimating that about 3,000 incidents per year could be eliminated if the proposed revisions to the worker protection standard are adopted and followed, resulting in $5 million to $14 million in benefits from preventing acute pesticide exposures.

Jordan was questioned about these estimates, as EPA's preamble to the proposed rule states repeatedly that the agency cannot quantify the benefits of the proposed revisions.

The comment period on the worker protection standard proposal currently is scheduled to close on June 17 but the agency already has been asked to extend the deadline by 90 days.

On April 11, the Center for Biological Diversity, Defenders of Wildlife and WildEarth Guardians stated their intentions to sue the US Fish and Wildlife Service (FWS) over the agency's decision to list the lesser prairie chicken as a threatened species and to issue a special rule limiting potential liabilities for landowners and businesses enrolled in approved conservation plans. The groups want the bird to be listed as endangered, which entails stricter protections under the Endangered Species Act, and say that the conservation plans are inadequate to invoke a special rule.

FWS announced its decision in March to list the bird as threatened and to issue a special rule under Section 4(d) of the Act to reduce the regulatory burdens and litigation risks for parties enrolled in conservation programs. The lesser prairie chicken is found in five states (Texas, Oklahoma, Kansas, Colorado and New Mexico) where oil and gas development, wind farms, electric transmission networks, and ranching/farming could affect the species' habitat.

The primary conservation program for the lesser prairie chicken is a five-state plan developed by the Western Assoc. of Fish and Wildlife Agencies, an interstate regulatory association. However, the environmental groups said the conservation plan sets a population goal that is too low, designates habitat areas that are too small and offers no reasonable expectation of enforcement.

Attendees at Cotton Council International's (CCI) first global COTTON USA Brand and Retailer Leadership Summit in Berlin, Germany were impressed by the quality of the speakers, with 82% of participants saying the Summit provided "a better understanding of the U.S. and global cotton markets" and the "complexity of the cotton value chain" and that attending the conference clearly will benefit their business.

In addition, 79% of the event's attendees (who came from Europe, Asia and North America) agreed that the event assured them that sourcing cotton and cotton-rich products is a viable long-term business decision.

The Summit brought together leaders from top global brands, retailers and sourcing companies to examine the latest developments in the apparel and home textile industry.

CCI tailored the event specifically for top decision-makers and offered attendees an opportunity to engage with industry experts, trend forecasters and supply-chain innovators on a wide variety of topics ranging from global economic uncertainty and price volatility to increased consumer social awareness and shopping habits, responsible sourcing and traceability solutions. CCI found that the Summit's speakers increased the audience's understanding of the complexities and flow of raw material production, supply chain dynamics and consumer marketing.

The Summit, which followed two European Brand and Retailer events in '09 and '11, represents the start of a global brand and retailer event to be held at different locations in the future -- a new area for the COTTON USA program.

Cotton Council International presented US cotton as the responsible fiber source to the audience of brands and retailers at Prime Source, the annual forum for the global fashion industry in Hong Kong on April 1-3. While there, leaders from the global textile supply chain also attended the 3rd annual general meeting of the Global Apparel, Textile, Footwear and Textiles Initiative (GAFTI).

Key themes of both meetings included moving toward a genuinely integrated, sustainable supply chain, tackling challenges such as labor and other rising costs, the rapid evolution of consumer and retail purchasing behavior in the mobile and digital age, future consumer markets and the need for collaborative efforts between retailers and brands and their vendors for stronger partnerships across the supply chain. Speed to market without sacrificing quality or increasing costs was a central theme.

GAFTI focused on the effort to standardize industry compliance measures and best practices for manufacturing. The two conferences called to action participating organizations and companies to work together to see the global textile industry move sustainably into the future.

Net export sales for the week ending on April 10 were 97,900 bales (480-lb). This brings total '13-14 sales to approximately 9.9 million bales. Total sales at the same point in the '12-13 marketing year were approximately 12.4 million bales. Total new crop ('14-15) sales are 1.5 million bales.

Shipments for the week were 306,100 bales, bringing total exports to date to 7.7 million bales, compared with the 9.2 million bales at the comparable point in the '12-13 marketing year.