The House Appropriations Committee's Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Subcommittee, chaired by Rep. Aderholt (R-AL), recently approved its FY16 agriculture appropriations bill. The full Appropriations Committee is expected to consider the bill within the next two weeks.
One of the key provisions included in the bill would direct USDA to allow the use of commodity marketing certificates for purposes of redeeming commodities from the marketing loan program. Loan deficiency payments (LDPs) and marketing loan gains (MLGs) are subject to the overall $125,000 per person or entity payment limitation included in the '14 farm law. This limit applies to the marketing loan program as well as the Agriculture Risk Coverage and Price Loss Coverage programs.
The ability to utilize certificates would not remove the limit for LDPs or MLGs, but would allow the use of certificates when redeeming commodities from the loan. Redemptions using certificates would not count toward the payment limit, but the provision does not alter the rules for LDPs. This provision is necessary to ensure the non-recourse marketing loan program continues to function as intended, especially during periods of low prices -- so that commodities can continue to be actively marketed and flow to the marketplace rather than become locked in the loan and then forfeited to USDA once the loans mature.
The bill also funds a number of important provisions for the industry, including $11.52 million for the joint cotton pests account for the boll weevil and pink bollworm eradication programs, full funding for both the Market Access Program and Foreign Market Development programs to assist with export market promotion activities, and funding for the Agricultural Research Service which includes the cotton ginning laboratories.
The measure also includes a provision to delay any loss of crop insurance premium subsidies if conservation compliance requirements were not met by June 1, '15. Conservation compliance was linked to crop insurance in the '14 farm law, but this provision would delay any penalty for non-compliance until the '17 reinsurance year.
The Senate Appropriations Committee has not yet considered its version of the agriculture appropriations bill.
9 Million US Cotton Acres Seen For '15
In its June acreage report, USDA estimated '15 US cotton plantings at 9.00 million acres, down 18.5% from '14. Upland planted area is estimated to have declined 18.4% to 8.85 million acres. Extra-long staple (ELS) producers planted 148,000 acres, down 22.9%. USDA's June projection is down 551,000 acres from their initial '15 estimate released in March.
Regionally, upland area in the Southeast is reduced by 18.1% to 2.19 million acres. All the region's states show declines with the greatest seen in Florida(-20.6%) and Georgia(-20.3%).
Planted acres are expected to decline 23.5% in the Mid-South with the greatest percentage losses expected for Tennessee(-38.2%) and Missouri(-30.0%). If current estimates are realized, area planted to cotton in Arkansas(240,000 acres), Louisiana(130,000 acres), and Tennessee(170,000 acres) would reach record lows.
In the Southwest, estimated planted area is 15.3% less at 5.48 million acres. Oklahomais the region's only state expected to see a planted acres increase, 4.2% more to 250,000 acres. The greatest decline in terms of percentage and actual acres is expected in Texas (-16.1%) to 5.20 million acres. Kansas is expected to see 6.5% less acreage for an estimated 29,000 planted acres.
Estimated upland area in the West is expected to be 35.6% less at 161,000 acres. All the region's states are expected to decline with the largest decline expected in Arizona (-46.7%) at an estimated 80,000 planted acres. Producers in New Mexicoplan to plant 30,000 acres (-30.2%) while those in Californiaintend to plant 51,000 acres (-10.5%).
USDA sees ELS plantings of 148,000 acres, 22.9% less than '14. New Mexicois unchanged from '14 with an estimated 5,000 planted acres while Arizona is expected to see a 20% increase in ELS plantings to 18,000 acres. Texas and California are projected to see declines of 11.8% and 29.0%, respectively.
Following the release of the June acreage report, USDA issued a release stating that the National Agricultural Statistics Service (NASS) will collect updated information in July on '15 acres planted to cotton in Texas.
At the time that NASS was collecting data for the June 30 Acreage report, weather delays left a portion of cotton acres yet to be planted in Texas. If the newly collected data justify any changes, NASS will publish updated estimates in the Crop Production report set for release at noon EDT on Aug. 12.
Sen. Roberts (R-KS) introduced S. 1660 which would make permanent a 50% depreciation bonus on new equipment and property purchases. This would allow businesses to deduct half of the cost of new purchases immediately. Cotton Belt Sens. Blunt (R-MO) and Isakson (R-GA) are co-sponsors.
The bill amends the US tax code to permanently allow businesses to immediately deduct 50% of qualified purchases. It also contains several improvements that encourage business investment. First, it expands the definition of qualifying property under bonus depreciation to include retail and restaurant improvements. Second, the legislation will allow businesses to claim unused Corporate Alternative Minimum Tax credits and use these credits for capital investment.
Similar legislation was introduced in the House by Rep. Tiberi (R-OH) and co-sponsored by Cotton Belt Reps. Abraham (R-LA), Boustany (R-LA), Brady (R-TX), Holding (R-NC), Jenkins (R-KS), Johnson (R-TX), Marchant (R-TX), Nunes (R-CA), Sinema (D-AZ) and Smith (R-MO).
The NCC joined other farm and business groups on a letter to House Ways and Means Committee members urging swift action on the legislation. The letter is on NCC's website atwww.cotton.org/issues/2015/upload/15bonuslet.pdf.
Bonus depreciation was first enacted in '02, and has been extended and allowed to expire multiple times. A permanent increase in depreciation allowances is critical to encouraging more economic growth. More generous depreciation deductions reduce the after-tax cost of investing, encouraging higher levels of investment spending by businesses.
Support Conveyed For Port Transparency
The NCC joined other farm and business organizations on a letter in support of the "Port Transparency Act" (S. 1298). The bill, which was approved by the Senate Commerce, Science and Transportation Committee, wasintroduced by Sen. Thune (R-SD) and includes Cotton Belt Sen. Alexander (R-TN) as a co-sponsor.
The bill, which would be an important first step to truly gain visibility into how US ports are operating, would establish a port performance measurement and reporting program based on sound data, and would enable the responsible federal agencies to prepare meaningful annual reports on the performance and capacity of the nation's key ports. Port performance data that facilitates rigorous analysis of America's port business is an essential element in ensuring the nation's commerce continues to flow efficiently.
The letter, on the NCC's website atwww.cotton.org/issues/2015/upload/15portlet.pdf, noted that when a serious port disruption occurs such as the recent situation at West Coast ports, the effects are far-reaching because: 1) exporters lose customers overseas; 2) perishable products are ruined; 3) manufacturers have to slow down or stop assembly lines because just-in-time inventory becomes impossible to manage; and 4) retail goods are delayed or miss important selling seasons.
Ag Trade Advisory Committees Filled
Agriculture Secretary Vilsack and US Trade Representative Froman announced the appointment of 129 private-sector members to the Agricultural Policy Advisory Committee (APAC) and six Agricultural Technical Advisory Committees (ATACs).
Cotton sector APAC members include: Dale Artho, a Wildorado, TX, producer; Dow Brantley, III, an England, AR, producer; Brenda Morris, a Ocilla, GA, producer; and Gary Adams, NCC president/CEO, Cordova, TN.
Cotton sector members of the Tobacco, Cotton and Peanuts ATAC include: Sledge Taylor, a Como, MS, producer/ginner and current NCC chairman; Michael Quinn, Carolinas Cotton Growers Cooperative, Inc., Garner, NC; Harvey Schroeder, a Frederick, OK, producer representing the Oklahoma Cotton Council; Randy Veach, a Manila, AR, producer representing the Arkansas Farm Bureau; and Michelle Huffman, a NCC economist, Cordova, TN.
"USDA and USTR rely on the individuals who serve on these committees to provide their expert advice on U.S. trade policy and priorities," Vilsack said. "They are an invaluable asset as we work to enact trade agreements and trade policies that deliver the greatest economic benefit for U.S. agriculture and for our nation as a whole. The last six years have been the strongest in history for U.S. agricultural exports, with international sales of American farm and food exports totaling $771.7 billion. Those exports now support more than a million quality American jobs. As we negotiate new trade agreements in Asia and Europe we will rely on APAC and ATAC members' expertise and knowledge to bring home the best possible deals."
Ambassador Froman noted that, "The strength of our trade agenda is dependent on the advice and counsel we receive from our trade advisors. And, now is more important than ever as we pursue the most ambitious trade agenda ever for America's farmers, ranchers and businesses of all sizes. The individuals we are appointing today represent one of the most important sectors to America's export economy and will provide critical advice as we negotiate the Trans-Pacific Partnership, Transatlantic Trade and Investment Partnership, and work to expand export opportunities for American agriculture."
Congress established the advisory committee system in 1974 to ensure a private-sector voice in establishing US agricultural trade policy objectives to reflect US commercial and economic interests. USDA and the Office of the US Trade Representative jointly manage the committees.
The APAC provides advice and information to the Agriculture Secretary and the US Trade Representative on the administration of trade policy, including enforcement of existing trade agreements and negotiating objectives for new trade agreements. The ATACs offer technical advice and information about specific commodities and products.
These committees' members will serve until June 15, '19, and be supplemented by additional appointments over the next four years. Applications are encouraged at any time and will be reviewed periodically for additional appointments.
The 11-member class of the NCC's '15-16 Emerging Leaders Program completed the first of three training sessions. While in Memphis, TN, and St. Louis, MO, they received communication skills and professional development instruction, a NCC orientation and an agribusiness briefing.
The '15-16 class includes: PRODUCERS -- Rafe Banks, Clarkedale, AR.; Brandon Brooks, Phoenix, AZ; Matt Coley, Vienna, GA.; Paul Minzenmayer, Rowena, TX; and Brad Williams, Burlison, TN; GINNERS -- Phillip Kidd, Edmonson, TX; and Todd Waters, Pantego, NC; MERCHANTS -- Cory Barnes, Cordova, TN; and Ken Burton, Montgomery, AL; WAREHOUSEMAN -- Joe Cain, Bakersfield, CA; and MARKETING COOPERATIVE -- Vicki Dorris, Lubbock, TX.
Sponsored by a grant to The Cotton Foundation from Monsanto, the Emerging Leaders Program provides participants an in-depth look at: 1) the US cotton industry infrastructure and the issues affecting the industry's economic well-being; 2) the US political process; 3) the NCC's programs as well as its policy development and implementation process and 4) Cotton Council International's activities aimed at developing and maintaining export markets for US cotton, manufactured cotton products and cottonseed products.
Bale Specifications Revisions Approved
The Joint Cotton Industry Bale Packaging Committee (JCIBPC) Specifications Review Subcommittee approved revisions to the '14 NCC JCIBPC Specifications for Cotton Bale Packaging Materials (Specifications). The updated Specifications for '15 will be sent to USDA for final review, approval and inclusion as an eligibility requirement for the Commodity Credit Corp. marketing assistance loan program.
The '15 Specifications are the same as the previous year's except for the addition of a modification to the 8 X 8 polypropylene bagging construction in section 2.2.4. of the Specifications. The "Meeting Summary" section notes that two firms were added to the JCIBPC list of approved manufacturers of PET strap for patented z-weld friction technology® and P600 or P361 friction weld technology® strapping devices.
Net export sales for the week ending on June 25 were 91,100 bales (480-lb). This brings total '14-15 sales to approximately 11.6 million bales. Total sales at the same point in the '13-14 marketing year were approximately 11.0 million bales. Total new crop ('15-16) sales are 1.6 million bales.
Shipments for the week were 245,300 bales, bringing total exports to date to 10.3 million bales, compared with the 9.9 million bales at the comparable point in the '13-14 marketing year. With just a few weeks remaining in the marketing year, weekly shipments must average roughly 80,000 bales to reach the USDA projection of 10.7 million bales.
