LUBBOCK, October 31, 2003 By Shawn Wade
The Texas CottonAssociation’s 2003 West Texas Cotton Flow Marketing meeting provided HighPlains cotton merchants, shippers and transportation suppliers an opportunity toget a better picture of the rapidly accelerating 2003 cotton marketing season.
One of the mostanticipated parts of the meeting is the annual crop update, presented by Dr.Randy Boman, Texas Cooperative Extension Cotton Specialist for the High Plains.
Dr. Bomanreported that through the end of October roughly 10 percent of the area’sestimated 2 million bale crop has moved thorugh the Lubbock and Lamesa USDACotton Classing Offices.
Estimates of thearea’s overall harvest progress stand at roughly 25 percent as the combinationof favorable harvest weather and improved cotton prices have encouragedproducers to move forward with harvest operations.
Otherpresentations at the TCA meeting included a Washington Update from AmericanCotton Shippers Association Executive Vice President and Chief Counsel NealGillen; an ACSA Update from the organization’s 2nd Vice PresidentJohn Mitchell of Cargill Cotton, Cordova, Tennessee; a presentation from TexasTech Agricultural Economics Professor Dr. Sam Mohanty entitled, “A GlobalPerspective on the Cotton Market”; and a panel discussion which includedreports from the warehouse, railroad, steamship, truck and shipper segments.
Also released atthe meeting was the 2003 shipping commitments report, by month, for West Texas/Oklahoma cotton. TCA Executive Vice President Bob Poteet, reported that current2003 shipping commitments, beginning with the month of November, totaled688,831 bales.
Poteet noted thatUSDA’s October 30 weekly cotton export report that revealed net upland sales of1.428 million bales for the previous week was not reflected in the TCA report.
The USDA exportreport caught many industry observers off guard as trade expectations for theweekly sales report ranged from 400,000 to 600,000 running bales.
Market reactionwas somewhat unexpected considering the bullish nature of the export number.
Instead ofpushing the recent upsurge in cotton futures prices to new highs, the endresult appears to be a market correction that many in the trade have beenexpecting.
Even though itmay take a few days to sort out, trade observers note that market fundamentalshave not changed for the worse and are, in fact, somewhat stronger given therecent export sales figure and continued uncertainty over the size of theChinese crop.
LUBBOCK, October 31, 2003 By Shawn Wade
The Non-InsuredCrop Disaster Assistance Program (NAP) provides growers with much neededprotection against crop losses that result from natural disasters on crops forwhich no federal crop insurance is offered.
Sign-up deadlinesfor some crops are rapidly approaching and producers are encouraged to completetheir paperwork in a timely fashion to be eligible for NAP benefits in 2004.Contact the county Farm Service Agency Office for more information.
Producers whoalready have coverage on 2003 NAP crops may choose to continue coverage on thesame crops in 2004 if the application service fee is paid by the applicationclosing date. A new CCC-471, application for coverage, does not require asignature when applying for continuous coverage of the same crop or crops.
Producers whochoose to add or delete a crop from the previous year’s NAP coverage or changecrop shares must timely file a new CCC-471 and pay a service fee.
Producers who had2003 NAP coverage are reminded to complete the following to qualify forbenefits:
The NAP programprovides coverage similar to the protection available through the Federal CropInsurance Catastrophic Risk Protection Plan of insurance.
By Steve Verett, PCG Executive Vice President
One of the leading critics ofU.S. agricultural policy in recent months has been the New York Times
Numerous New York Times
Two weeks ago an editor fromthe New York Timesspent a few days in Lubbock, ostensibly to learn about the U.S. cotton industryand how the U.S. cotton program really works. Hours of discussions withproducers and knowledgeable representatives from industry and academic arenaswere invested in good faith to communicate the other side of the supportpicture.
The end result of those manyhours of discussions was a New York Times’ editorial entitled, “The Fabric of Lubbock’s Life”.
In it the New York Times
Unfortunately for the NewYork Times, it appearsthat a little more attention should have been paid to the world cotton marketthe past two weeks instead of devoting all their efforts to repackaging oldarguments for the wholesale elimination of U.S. farm programs.
So what has changed since theNew York Timeseditorial writer spent his time on the Texas High Plains, politely taking notesand “talking” with the real people of West Texas?
The answer is simple –nothing but the market.
The same market, which the NewYork Times says iseasily manipulated by the rich at the expense of the poor, has reacted quicklyto the fundamentals that drive all markets in the end – Supply and Demand.
The good news for the NewYork Times is thatthe higher cotton prices they say will remedy the economic woes of the cottonproducer in Burkino Faso have arrived.
In fact, all of the thingsthey say would happen when world cotton prices increase are occurring. Cottonproducers in Burkino Faso, Benin, and even the United States, are getting morefor the cotton they produce. The cost of U.S. farm programs is going down,saving the U.S. taxpayer millions of dollars. And, the overall effect on theconsumer is likely to be negligible, after all there is only about a dollar’sworth of cotton in a pair of jeans.
Reality has poked a huge holein the New York Times’ argument that U.S. cotton programs were solely responsible for lowcotton prices. The bitter pill the New York Times
No doubt subsidies help ourcotton producers meet the higher costs of production that exist in thiscountry, but government support of agriculture does so much more. It primes theeconomic engine and keeps all parts of the U.S. agriculture industrycompetitive in a drastically uneven global marketplace.
Farm programs at their mostfundamental levels support the infrastructure of this nation’s agriculturalbase. They encourage environmental stewardship and promote cleaner air andwater by helping producers afford the increased costs associated with growingcrops using environmentally friendly technology. They also help guarantee asafe and reliable food and fiber supply for the U.S. citizenry.
Following the money leads toa realization that agricultural subsidies only help make up the differencebetween production costs and world market prices and rarely stay in theproducer’s pocket. Instead, subsidies do exactly what they are designed to do;allow producers to pay for the goods and services required to produce a crop inthe U.S. and support the infrastructure of their industry.
For the Lubbock area, cottonprogram dollars support agricultural product and service providers, churches,school districts, hospitals, car dealerships, restaurants and on and on. ForLubbock a healthy cotton industry continues to be a source of pride andeconomic reliability.
Farm programs exist becauseour population believes that a healthy U.S. agriculture sector is important tothe long-term viability and security of this country.