Happy New Year !!


Plains Cotton Growers, Inc.


PCG Ready to Build onSuccessful 2004

LUBBOCK, December 31, 2004                 By Shawn Wade

      The past yearhas been one of tremendous change for the Texas High Plains. In fact, it seemsthat just about everything that could possibly change did.

      Through itall High Plains cotton producers have accomplished more than many thoughtpossible in the field and on the legislative and regulatory issues that affectthem. Mother Nature and a change in the weather provided the biggest surpriseand helped push 2004 production beyond expectations.

      Producers,working together through Plains Cotton Growers, helped secure beneficialdisaster assistance legislation, protected the key components of the 2002 FarmBill and worked to lay the groundwork necessary to protect agricultureŐsinterests.

      At thestate level, future debate on issues ranging from water to the budget andschool finance reform will be shaped by the efforts PCG put forth in 2004.

      At thefederal level, budget issues will ultimately shape the debates important to cotton.Federal issues on the horizon include the start of the 2007 Farm Billdevelopment process, preserving and expanding conservation program funding anddealing with the delivery of farm programs, crop insurance, and conservationprograms.

      PCG has stayedon top of these issues and is preparing to build on the successes achieved in2004. Production-wise the 2004 crop is expected to be a record-setter, despitethe prolonged effort of moving it from field to bale.

      As ÓCottonYearsÓ go, 2004 will probably go unsurpassed in the record books for decades tocome. For a new generation of cotton farmers the 2004 crop year will beremembered as a once in a lifetime event.

      Despite theblessings that were received by many, the 2004 crop year was far from perfect.The same weather patterns that blessed the 41-county PCG service area with thesecond-highest rainfall amount ever recorded, also left destruction as well.

      A trulysignificant event in 2004 was the passage of a 2003/2004 Disaster Assistancebill by Congress in the days leading up to the November elections.

      Timelyeffort to secure crop disaster assistance to help cotton producers on the TexasHigh Plains is always a top priority on the Plains Cotton Growers agenda.

      Followingthe Summer of 2003, when the area was devastated by multiple hail storms thatdestroyed nearly one million acres of cotton, efforts were redoubled andresulted in a 2003/2004 disaster assistance program.

      As usuallyhappens with such legislation things moved quickly once a suitable catalyst wasidentified in the Florida hurricanes. Plains Cotton Growers was ready to actand played a significant role in final passage of the bill.

      The versionof the legislation that eventually passed was introduced by Congressman RandyNeugebauer of Lubbock and includes both yield and quality loss components basedon the crop disaster assistance programs approved for the 2000, 2001 and 2002crops.

      Thedisaster debate seemed to be a culmination of a gut-wrenching 2004 electioncycle for the High Plains. The election cemented the fact that High PlainsCongressional representation would never be the same as two cotton friendlycandidates were forced to square off against one another with the ultimate loserbeing the strength of cottonŐs voice in the halls of Congress.

      On arelated note, PCG is also looking forward to working with new District 11Representative Mike Conaway of Midland to look after the significant cottoninterests he represents in the southern part of the PCG service area.

      Perhaps themost visible change that occurred in the area was the change brought about byMother Nature with what we hope to be the end of the areaŐs recent droughtcycle.

      Because ofthis change, the High Plains has a great abundance of cotton to sell in 2004.What the area missed was a supply-altering trigger that could keep prices up.In fact the lack of any area suffering a significant production shortfall isone of the most eye-catching characteristics of the 2004-crop worldwide.

      For U.S.cotton producers the significant drop in worldwide cotton prices isnŐtsomething they have to bear alone thanks to the multi-layered support systemprovided by the 2002 Farm Bill.

      Instead ofhoping the extra pounds they produced are enough to offset the lower price,U.S. cotton growers know they have the full protection of the Commodity CreditCorporation marketing loan program providing them a price floor on every poundof cotton they produce.

      Themarketing loan program also has mechanisms, such as Loan Deficiency Payments,that enable U.S. cotton to be price competitive, find a place in the market andnot hang around to become a drag on world prices in 2005.

      Add in thesupport provided through the 2002 Farm BillŐs Direct- and Counter-cyclicalsupport programs and U.S. cotton growers have the tools necessary to workthrough the current situation.

      For cottonproducers 2004 has been a year of hard work, handsome rewards and, at times,bittersweet farewells.

      Just as theorganization worked hard to be in the right places at the right times in 2004,PCG is ready to tackle the challenges of 2005 and be the advocate the HighPlains cotton industry needs to remain successful.