JOHANNS RELEASES BUSH FARM BILL PROPOSAL

Friday, February 2, 2007                            By Shawn Wade

      Secretary of Agriculture MikeJohanns rolled out the Bush Administration's farm bill concept paper earlierthis week and provided an interesting counterpoint for the Farm Bill debate.

      Since detailed analysis ofthe proposal will take some time, the early reactions from Congress andcommodity groups have been understandably mixed. From Congress initialresponses have expressed appreciation for the thought, time and effort thatUSDA put into development of the proposal clearly punctuated with a reminderthat it will be Congress that decides what ultimately becomes part of the 2007Farm Bill.

      Most of the responses alsotake note of the fact that the proposal appears to contain some individualcomponents that merit full consideration.

      "The fact of the matter isthat producers shouldn't take too much of the Administration's proposal toheart," says Plains Cotton Growers, Inc. Executive Vice President Steve Verett. "Ultimately it will be Congress, not the Administration, that writes the 2007Farm Bill and the proposal released January 31 will be viewed as a set of ideason the table for consideration."

      Verett notes that despite thefact that many of the changes proposed by the Administration probably won'tgain much traction, there are some positives to be found.

      He points to two important concepts that are clearly espoused in the proposal. The first is a commitment to support the three main components of the 2002 Farm Bill - the marketing loan and the direct and counter-cyclical programs. The second is the Administration's recognition that additional budget authority will be necessary to meet the new needs they helped identify.

      The Administration proposalwould require approximately $5 billion in new spending authority to be fullyimplemented.

      Specifics of theAdministration's proposal include:

• Maintaining the marketing assistance loan program in its present form with changes in the mechanism used to determine the loan rates for program crops;

• Maintaining the Direct Payment Program with initial changes to the payment rates for cotton and rice to partially offset impact of marketing loan rate adjustments and with increases on some other crop payment rates in the out years;

• Maintain a modified Counter-cyclical payment program with a revenue based trigger and payment rate calculation mechanism;

• Maintain the Federal Crop Insurance Program with a downward revision in the program's loss ratio target and adding the ability to purchase GRP/GRIP insurance policies in tandem with individual Multi-Peril Crop Insurance/Revenue insurance policies; and,

• Modify current Payment Limitation rules by replacing the current 3-entity rule with a single $360,000 payment limitation provision ($110,000 limit on Direct payments, a $110,000 limit on Counter-cyclical payments and a $140,000 limit on marketing loan program benefits).

      Perhaps the only concretething that can be said about the Administration proposal at this time is that someof it warrants further review and it will not be dismissed wholesale as apotential source for positive enhancements to the current program.

      It is also clear that many ofthe proposals, such as the proposed revamping of the loan rate discoverymechanism, are problematic and not likely to be viewed favorably byCongressional farm bill writers.

      USDA Deputy Secretary BruceKnight provided an accurate and insightful comment on what the Administrationproposal "is" and "is not" when presenting the Administration's proposal to anaudience in Sioux Falls, South Dakota on January 31.

      "There still is a great dealof discussion on the specific details raised by the [USDA's] proposed farm billand the bill undoubtedly will go through changes as input is sought on itsideas," Knight said.

      "This is an openingdocument that is meant to open a discussion," he concluded. "We wantto make sure to have substantive discussions on how you can improve farmpolicy."

 

UPLAND COTTON AVERAGE PRICE RECEIVED BY
GROWERS THROUGH NOVEMBER 2006

Friday, February 2, 2007                            By Shawn Wade

      CumulativeUpland cotton marketings for the first five months of the 2006-marketing yeartotaled 6.325 million bales according to information released January 31 by theUSDA National Agricultural Statistics Service.

      That figure is1.432 million bales off the pace set through the same period last season.

      According to USDAestimates December 2006 cotton marketings totaled 2.062 million bales with anaverage selling price of 49.30 cents per pound. So far the 2006 Upland CottonWeighted Average Price calculated through December 2006 stands at 47.35 centsper pound.

      With the firstfive months of the marketing year now past, the calculated 2006 WeightedAverage Price is still almost five cents below the 52-cent threshold where2006-crop Counter-cyclical payment rates would begin to drop although pricesalso continue to show an upward trend. The preliminary mid-month pricereported for January 2007 was 49.50 cents per pound.

      The followingtable shows the average price received each month by farmers and the associatedweighted average price based on prices and cumulative marketings from August 1through December 31, 2006.

      The 2006Counter-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 2006marketing year. The 2006 cotton marketing year began in August 1, 2006 and endsJuly 31, 2007.

 

Average Price Received For2006-crop Upland Cotton
(Weighted byMarketings)

 

Marketings

Prices

 

(000's of Running bales)

(cents/Lb.)

 

Monthly

Cum.

Monthly

Weighted

August

1,970

1,970

45.80

45.80

September

182

2,152

47.30

45.93

October

994

3,146

46.10

45.98

November

1,117

4,263

47.60

46.41

December

2,062

6,325

49.30

47.35

January

na

na

49.50*

na

Source: National AgriculturalStatistics Service; * = preliminary

 

DR. ROY CANTRELL TO HEAD UP MONSANTO
MOLECULAR BREEDING TECHNOLOGY INITIATIVE

Friday, February 2, 2007                            By Shawn Wade

      Dr. Roy Cantrell hasannounced he will be leaving Cotton Incorporated effective March 23, 2007 tobecome the Molecular Breeding Technology Lead for Monsanto.

      Cantrell has been with CottonIncorporated since 2001 and has overseen a dramatic overhaul of theorganization's research programs and priorities as Vice President ofAgricultural Research.

      In addition to guiding theextensive CI research program, Cantrell has been instrumental in implementinginnovative research and developmental programs over the last five and a halfyears that refortified the current, as well as the future of the U.S. cottonbreeding community.

      Two of the key programs hehas helped implement are the "Cotton Incorporated Fellowship" program and CI'scurrent Sustainability Initiative.

      The "Cotton IncorporatedFellowship" program provides financial support for research fellowships in thearea of cotton breeding with the goal of identifying and training the next generationof cotton breeders.

      The CI SustainabilityInitiative is a program designed to set the record straight about what it meansto have a sustainable cotton production system and to educate consumers aboutthe true environmental impact of modern cotton production systems.

      Being a West Texas native Dr.Cantrell is well known to cotton producers across the High Plains region andhis leaving Cotton Incorporated will not go unnoticed.

      Cotton Incorporated officialssay that they intend to work with a consulting firm in a national search forapplicants to fill the vacancy-similar to the process that was undertaken whenDr. Cantrell was hired.

OPPORTUNITIESREMAIN FOR PRODUCERS TO
ATTEND HIGH PLAINS PRODUCTION CONFERENCES

      Helping farmers stay up onthe latest trends in crop production, marketing, and management ideas is thenumber one goal of High Plains crop production conferences. Sponsored by TexasCooperative Extension, the Conferences offer production information forproducers entering the 2007 growing season.

      Conferences are scheduled atmultiple locations throughout the area to provide growers an opportunity toreceive this information without having to travel too far from home.

      By attending the conferencesproducers can also earn continuing education units (CEUs) necessary to maintainprivate and commercial applicator licenses.

      Weather has impacted theschedule for several of this year's conferences and a revised listing ofrescheduled and remaining conference dates and locations appears below.

 

2007 High Plains ProductionConference Schedule

February 6

Sandyland Ag Conference

 

For more information contact Terry Millican, Gaines CEA-AG at 432-758-4006.

February 7

Hale/Swisher Crops Conference

 

For more information contact Michael Dolle, Hale CEA-AG at 806-291-5268.

February 7

South Plains Ag Conference

 

For more information contact Chris Bishop, Terry CEA-AG, at 806-637-4060.

February 27

Caprock Cotton Conference

 

For more information contact J.D. Ragland, Floyd CEA-AG, at 806-983-4912.

March 2

West Plains Cotton Conference

 

For more information contact Chris Edens, Hockley CEA-AG at 806-894-2406.

 

2006-CROP COTTON QUALITY SUMMARY

      Thefollowing is a summary of the cotton classed at the Lubbock and Lamesa USDACotton Division Cotton Classing Offices for the 2006 production season.

 

Week Ending February 1, 2007:

 

Office

Bales

Color

Leaf

Staple

Lamesa

14,786

21+ - 48%

31 - 35%

3.14

35.72

Lubbock

66,947

21+ - 53%

31 - 34%

3.14

35.88

 

Mike

Strength

Uniformity

Bark

Lamesa

3.92

28.84

80.57

30.5%

Lubbock

3.45

28.43

80.42

56.5%

 

Season Totals To Date:

 

Office

Bales

Color

Leaf

Staple

Lamesa

823,383

21+ - 64%

31 - 30%

3.00

35.97

Lubbock

2,977,406

21+ - 54%

31 - 37%

3.13

36.11

 

Mike

Strength

Uniformity

Bark

Lamesa

4.00

29.14

80.68

13.4%

Lubbock

3.77

29.48

80.98

23.0%