NCC, CCI Presentations Highlight PCG Meeting;
PCG Board Adopts 2005-06Budget

Friday, July 15, 2005                                  By Shawn Wade

      National Cotton Council VicePresident John Maguire presented a comprehensive update on Washingtonlegislative issues to the Plains Cotton Growers, Inc. Board during theorganization's quarterly Board of Directors meeting July 13.

      During his remarks Maguireprovided some insight into the NCC's overall strategy to maintain the integrityof the 2002 Farm Bill during the current 2005-2006 Agriculture Appropriationsbudget development process and into the 2007 Farm Bill debate. He alsodiscussed the potential timetable and impact of the recent WTO DisputeSettlement Panel (DSP) findings against several aspects of the current U.S.cotton program and specifically the finding that the Step 2 program constitutedan illegal export subsidy.

      Maguire reported that thecotton industry has expressed its opposition to the USDA recommendation thatthe Step 2 program be terminated immediately. The industry will now take itscase to Congress, which has the final authority to deal with Step 2.

      Maguire stressed that untilCongress acts the Step 2 program continues to operate as always. He added thatit appears Congress and the Administration are leaning toward budgetreconciliation legislation to be considered this Fall as the vehicle for anylegislative changes regarding the Step 2 program.

      He noted that the NCC isdedicated to working with PCG and other industry segments to achieve thelongest possible phase-out period for the program in order to provide all partsof the industry an opportunity to adjust to life without Step 2.

      Following Maguire's report,Cotton Council International Assistant Executive Director David Collinspresented the PCG Board with a report on the international cotton promotionactivities performed under the Cotton USA banner.

      Collins, who is originallyfrom Lubbock, noted that since its inception in the late 1980's the Cotton USAprogram has fueled a significant increase in the demand for products producedfrom US grown cotton and has also contributed to an increase in the demand forcotton overall in foreign markets.

      Collins said that the CottonUSA program relies on a mixture of industry generated funds and Market AccessProgram (MAP) funds provided through the auspices of the current U.S. farmprogram. He explained that cotton is only one of several commodities thatreceive MAP funds.

      Collins noted that CCIutilizes a combination of direct consumer advertising and promotions, designedto stimulate demand for U.S. cotton, and a variety of material sourcing andtechnical assistance programs to encourage the initial selection of U.S. cottonby consumers, manufacturers and retailers. All of these programs he explained,stress the overall value package that is associated with purchasing U.S. rawcotton.

      Collins reported that theimpact of the Cotton USA program has mirrored in many respects the results ofdomestic promotion efforts of U.S. cotton growers through Cotton Incorporated.

      Since 1989 Collins noted thatthe percentage of non-U.S. consumers who say they would show a preference forproducts made from U.S. cotton has doubled worldwide moving from around 25percent in 1989-90 to more than 50 percent in 2004.

      PCG Executive Vice PresidentSteve Verett brought the Board up to date on a number of other issues ofinterest to the High Plains. Verett discussed the status of several itemsinvolving the Federal Crop Insurance Program as well as providing a Texaslegislative update.

      Among the issues discussedwere the status of proposed program modifications involving the deferredappraisal period for non-emerged seed, plans for future discussion of cottonskip-row provisions following completion of an RMA study on that subject earlierthis year, and the importance of maintaining a reasonable "Practical to Replant"definition and guidelines for companies to make replant determinations.

      During his report the PCGBoard agreed to go along with an RMA proposal to shorten the Upland cotton lateplanting period for Texas counties with May 31, June 5 and June 10 FinalPlanting dates. Texas counties impacted by this change are predominatelylocated in the High Plains production region.

      Inother business the PCG Board adopted a 2004-2005 operating budget of$688,152.80 to support the organization's ongoing legislative, regulatory andcotton research programs. PCG began its new fiscal year July 1.

 

TTU Releases Step 2 Impact Study

Friday, July 15, 2005                                  ByRoger Haldenby

      Dr. Samarendu Mohanty,Associate Professor with Texas Tech University's Department of Agricultural andApplied Economics recently announced that the TTU Cotton Economics ResearchInstitute (CERI) has prepared, and made available online, a new briefing paperon the potential impact from elimination of the Step 2 program.

      To find the latest TTU CERIStep 2 analysis, along with other interesting reports and studies on worldtrade, economics and cotton marketing, go to: http://www.ceri.ttu.edu/policy

 

2004 Ave. Price Received CalculationOn Track
To Create Maximum 2004 CCP Payment

Friday, July 15, 2005                                  By Shawn Wade

      Based on USDAfigures the 2004 Upland Cotton Weighted Average Price calculated through May2005 stands at 42.77 cents per pound. With only the historically slow marketingmonths of June, July and August yet to be reported, the 2004 Counter-cyclicalpayment rate will most likely be the maximum 13.73-cents allowed by currentprogram rules.

      The 2004Counter-cyclical payment rate authorized under the 2002 Farm Bill will be basedon the 12-month Weighted Average Price Received by growers. For cotton the12-month Weighted Average Price will reflect price and marketings for the 2004marketing year. The 2004 cotton marketing year began on August 1, 2004 and endsJuly 31, 2005.

      The followingtable shows the average price received each month by farmers and the calculatedweighted average price based on estimated cumulative marketings and pricesreported by the National Ag Statistics Service through January 2005.

 

 

Monthly Average Price Receivedfor

2004-crop Upland Cotton ThroughMay 2005

(Weighted by Marketings)

 

Marketings

Prices

 

(000's of Running bales)

(cents per pound)

 

Monthly

Cum.

Monthly

Weighted

August

1,215

1,215

53.70

53.70

September

537

1,752

49.30

52.35

October

923

2,675

49.50

51.37

November

1,437

4,112

44.40

48.93

December

2,292

6,404

40.70

46.09

January

3,698

10,102

39.60

43.72

February

1,847

11,949

39.00

42.93

March

1,354

13,303

41.50

42.78

April

934

14,237

43.10

42.81

May

559

14,796

42.00

42.77

June

na

na

40.70*

na 

Source:National Agricultural Statistics Service; * = preliminary

 

 

Industry Caucuses Identify Producers To
Represent Texas In CB and CI Posts

Friday, July 15, 2005                                  By Shawn Wade

      Representatives from TexasCertified Producer Organizations met in Austin July 14 to make recommendationsto the Secretary of Agriculture for Members and Alternates to serve on theCotton Board (CB) and also selected a new mix of representatives to representTexas on the Cotton Incorporated (CI) Board of Directors.

      During the Caucus first andsecond choice recommendations for one Cotton Board Member and Alternateposition allocated to be filled by High Plains producers were forwarded to theSecretary of Agriculture.

      The Cotton Board position iscurrently being filled by Hale County cotton grower Ronnie Hopper with FloydCounty cotton grower Compton Cornelius serving as the Alternate. Both of theseindividuals are eligible to serve an additional term in their current positionsand were recommended as the first choices for their respective positions.Swisher County cotton producer Barry Evans and Floyd County producer JohnDunlap were submitted as second choice member and alternate, respectively, forthe Cotton Board position.

      During the CottonIncorporated Caucus the High Plains region appointed Lubbock County producerGerry Hilburs to serve on the Cotton Incorporated Board of Directors, fellowLubbock County producer Eugene Bednarz was named to the Alternate positionbehind Hilburs.

      Three other CottonIncorporated Board positions were also up for renewal at the Caucus. CurrentCotton Incorporated Directors Lexie Fennell (Lamb County) and James Brown(Bailey County) were reappointed with their Alternates Travis Mires (DawsonCounty) and Brad Heffington (Lamb County), respectively. Fellow CottonIncorporated Board member David Pearson (Dawson County) was also reappointedwith new Alternate Dahlen Hancock (Lubbock County).