Below Normal August Temps and Slow
September Start Lowers CropExpectations

LUBBOCK, September 10, 2004                By Shawn Wade

      Anabnormally cool and cloudy August did little to ease producer concerns overtheir chances to fully develop the tremendous potential struggling to berealized in the cotton fields of the Texas High Plains.

      Sofar, 2004 has been quite a roller coaster ride for producers who saw MotherNature help them overcome numerous obstacles early in the season. Since thatsomewhat rocky start, late Spring and early Summer weather patterns have putthem in an uncharacteristically favorable moisture position due to timelysummer rainfall.

      Manyproducers have wondered if the below normal August temperatures that taggedalong with all that moisture would slow development and keep them from turningpotential into reality.

      Accordingto the National Agricultural Statistics Service it appears those concerns canbe laid to rest. The NASS September Crop Production Report increased estimatesfor the 2004 Texas cotton crop across the board.

      Thestate forecast increased from a record–setting estimate of 6.3 million bales onAugust 1 to an even more impressive 7 million bales on September 1.

      Narrowingthe focus down to the Texas High Plains region tells the same story. Looking atcrop reporting districts 1-N and 1-S the High Plains crop is expected to comein at 4.22 million bales, up from last month's 3.89 million bale forecast. Thisis a net change of 330,000 and reflects what in hindsight can only be describedas extremely favorable growing conditions.

      Withno change in projected harvested acreage, the increased production figure ispurely a factor of increased yield expectations based on the field surveysconducted at the end of August. Yield estimates increased from 742 to 761pounds in district 1-N and from 498 to 535 pounds in district 1-S.

      Despitethe excellent prognosis provided by the NASS report, the consensus from bothproducers and cotton experts is that it is still too early to tell if the cropwill match the snapshot taken at the end of August.

      Onething most do agree on, however, is that pulling together all the ingredientsneeded for the crop to come out as predicted is likely, but could still turnout to be a tricky proposition.

      Probablythe most asked question among producers concerns the effect of low nighttimetemperatures on the cotton plant's ability to mature bolls and maximize fiberquality characteristics like staple length and micronaire.

      Onthe staple side of the quality equation, adequate moisture levels and thegenetic potential of current varieties should assure the region of good toexcellent length measurements on the majority of the crop.

      Themicronaire side, however, is not so easy to get a handle on. A generally coolerweather pattern seems to point toward the 2004 crop having lower micronairevalues than were recorded in recent years. That may not be all bad since recentcrops have measured on the higher end of the target micronaire range.

      Accordingto Dr. Dan Krieg of Texas Tech University, even if micronaire readings fallsomewhat from recent years, the majority of the crop should still comfortablyfall in the base micronaire range from 3.5-4.9. In fact, he expects most of thecrop could average near the CCC loan chart's premium range (between 3.7-4.2)for micronaire readings.

      Thebiggest potential obstacle to the base micronaire range on a majority of thecrop, according to Krieg, is an early freeze that terminates the crop tooearly.

      Generallyspeaking, cotton plants are relatively unaffected by short durationtemperatures between 45 and 50 degrees Fahrenheit. It is only when nighttimetemperatures drop below this level and stay there for an extended period oftime (6-8 hours per day over 6-8 consecutive days) that micronaire developmentis significantly effected.

      Luckily,very few areas have encountered this type of nighttime low. The few areas thathave recorded temperatures in the low 40s over the past week experienced themonly briefly and may or may not have suffered as a result.

      Thebottom line is that with a few more weeks of favorable weather the 2004 HighPlains crop can still meet the high expectations many have set.

      Thatthe 2004 crop will reach the 4.22 million bales forecast on September 1 is nota foregone conclusion. Any remaining concern voiced by producers simplyreflects the recognition that the 2004 crop is still a crop on verge.

      Whetherit is on the verge of greatness or disappointment will be determined by MotherNature and nobody else.

 

WTO Panel Releases Brazil Ruling To Public;
Mixed Results Guarantee U.S. Appeal

LUBBOCK, September 10, 2004                    By Shawn Wade

      An initialreading of, and press reports on, the content of the long-awaited release of aWTO dispute panel's findings in the cotton subsidy case brought by Brazilagainst the United States appears to be a mixed bag of wins and losses for theU.S.

      Brazil won onmany aspects of its complaint while the U.S. prevailed in part of its defenseof certain program components that provide "decoupled" programpayments. Interestingly, while the panel found injury, it declined to find thatcurrent U.S. support programs threaten to cause "serious prejudice"to Brazil's interests in the near future. The impacts of this part of thedecision remain unclear.

      Importantly,several portions of the U.S domestic support program for cotton were deemed tohave suppressed prices during the 1999-2002 time period.

continued

 

      What does itmean?First of all there will be no immediate impact on the current U.S. farmprogram. Secondly, the release of the report begins the appeal process, whichis expected to be completed in 90 to 100 days.

      The following isthe good, the bad and the ugly as determined by the WTO panel.

      The Good. The panel determined thatthe following components of the 1996 and 2002 Farm Programs had no adverseaffect on world prices and were/are allowable under the terms of thecurrent WTO Agreement on Agriculture: Direct Payments (2002 Farm Bill),Production Flexibility Contract (PFC) payments (1996 Farm Bill), cropinsurance. No additional action or changes were directed/recommended by thepanel on any of these program components.

      The Bad. Several U.S. programcomponents were found to have had the effect of suppressing prices in the worldmarket during the time period in question.

      U.S. programcomponents falling under this heading include: marketing loan program payments(1996 and 2002 Farm Bills), Market Loss Assistance payments (1996) Farm Bill),and Counter-cyclical Program payments (2002 Farm Bill) and Step 2.

      It was thedirection/recommendation of the dispute panel that for each of these programcomponents the United States "take appropriate steps to remove the adverseeffects or withdraw the subsidy".

      The Ugly. The following programcomponents were found to be prohibited subsidies under the WTO Subsidies Code: the GSM 102 and GSM 103 Export Credit programs; the Supplier Credit GuaranteeProgram; and the cotton Step 2 program for both exporters and domestic users.

      The panel'sdirective for each of these programs was for the U.S. to withdraw the subsidy"without delay".

      Analysis of thereport's content and findings has been ongoing at the United States TradeRepresentatives office and is now fully underway by cotton interestorganizations. This effort is being spear-headed by the National CottonCouncil.

      The USTR hasindicated that the U.S. appeal would be pursued vigorously on those pointswhere the panel agreed with the claims and analysis presented by Brazil, sayingthe facts do not show that U.S. farm programs have distorted trade and causedlow cotton prices.

 

FSA Not Likely to Announce Final 2003
Counter-cyclical Payment Rate UntilOctober

LUBBOCK, September 10, 2004                By Shawn Wade

      Responses fromthe Farm Service Agency regarding announcement of the final 2003Counter-cyclical payment rate indicate the agency will wait to receive revisedmarketing and price information from the National Agricultural StatisticsService before doing the final calculation.

      Representativesfrom NASS added that they have pushed forward the date that revised cottonmarketing and price figures are normally released in an effort to get theinformation to FSA as quickly as possible. NASS state offices are in theprocess of revising the monthly information they initially reported based onadditional information it was received during the course of the marketing year.

      The revised NASSschedule indicates final 2003 crop marketing and price information will bereleased in conjunction with the October Crop Production Report on October 12.

 

Calendar of Events

      Septemberis a busy month across the High Plains as growers are given the opportunity toparticipate in a wide variety of Texas Cooperative Extension and industry croptours. In an effort to help producers plan to attend these tours, a list ofcounty crop tours will be included as soon as this information becomesavailable.

 

Date:

Event \ Location \ Directions:

Time:

Sept. 13

Yoakum Co. Farm Tour

Location: Plains Community Building

9:00 a

Sept. 14

Dawson Co. Crop Tour

Location: Busses load at the Dawson Co. Courthouse

8:00 a

Sept. 15

Lynn Co. Ag Tour

Location: Farmer Coop Gin in Tahoka, 8:00 a.m. Registration; 8:30 a.m. Tour Start

8:00 a - Noon

Sept. 16

Terry Co. Farm Tour -

Location: Tour departs from the First Baptist Church parking lot in Brownfield.

9:00 a

Sept. 16

West Texas FiberMax Field Day

Location: Bayer CropScience Cotton Research Farm. 9:30 a.m. Registration; 10:00a.m. Tours Begin, followed by lunch

Directions: FM 40 and FM 1729, 4 miles east of Lubbock on the Acuff Highway

9:30 a – Noon

RSVP Required

To RSVP call

800-777-9249 or contact your Bayer Rep

Sept. 17

Helms Research Farm Irrigation Tour

Location: 2.5 miles south of Halfway

9:00 a

Sept. 22

All-Tex Seed Field Day

Location: TBA

TBA

Sept. 23

D&PL Field Day

Location: Lorenzo

TBA

Sept. 27

Harvest Aid Meeting

Location: Buster's Gin, Ropesville

TBA

Sept. 28

Crosby Co. Crop Tour

Location: TBA

TBA

Sept. 29

AFD Seed Field Day 2004

Location: 1 mile south of intersection of FM 1585 and County Road 2500 (MLK Blvd). From Hwy 87 go 1.5 miles east on FM 1585 to County Road 2500 (MLK Blvd) and turn south 1 mile.

10:00 a -2:00 p

Sept. 30

Stoneville Field Day

Location: TBA

TBA