HOUSEAGRICULTURE COMMITTEE TO BEGIN FULL
COMMITTEE MARK-UP OF 2007 FARM BILL JULY 17

Friday, July 6, 2007                                    By Shawn Wade

      Travelarrangements are being finalized and commodity groups are working outstrategies to ensure their interests are protected and their ideas fullydebated during the House Agriculture Committee's planned July 17 mark-upsession to finalize its version of the 2007 Farm Bill from what is now ahodge-podge of individual legislative titles.

      Bythe end of what is scheduled to be a three-day session ending July 19, HACChairman Collin Peterson plans to have a rock-solid recommendation for the 2007Farm Bill ready to go to the House floor where debate could begin as early asJuly 26.

      PlainsCotton Growers leaders are readying themselves for both debates and havealready hit the ground running. In addition to the organization's July 11 Boardof Directors meeting that will be an important source of guidance heading intothe HAC mark-up July 17, PCG leaders are continually discussing issues with theNational Cotton Council, other cotton industry groups and representatives fromgeneral farm and commodity organizations. Having those discussions now willenhance PCG's efforts to secure the continuation of the effective andpredictable policies of the 2002 Farm Bill.

      Whenit comes to policies impacting cotton, protecting the safety net provisionscontained in the current Commodity Title is of primary importance says PCGExecutive Vice President Steve Verett. He notes that the HAC's Subcommittee onGeneral Farm Commodities and Risk Management voted unanimously to extendprovisions of the current Commodity Title during deliberations late last monththanks in large part to the input of groups like PCG and the NCC.

      Thesubcommittee's recommendation to extend the current program's structure withonly a few minor tweaks was good news for High Plains cotton producers and thecotton industry in general adds Verett.

      Theunanimous vote to extend the provisions of the 2002 Farm Bill was also a strongsignal to farm bill opponents in Congress and the Administration that U.S.agriculture strongly supports the provisions of current farm law and that callsfor significant reform do not represent the position of a majority of theagriculture sector.

      Verettwarns that there is still a considerable amount of work left to be done headinginto the full HAC mark-up session and that a number of issues are expected totrigger additional debate and even undergo some modification. Among the topissues falling in this category are program pay limits and eligibilityguidelines, two of the most misrepresented and often challenged provisions inrecent farm policy debates.

      It isclear that while there is no guarantee that everything will go exactly to plan,the groundwork that has been laid by PCG and others over the past few months ispaying off, says Verett.

      "Theissues driving this debate are largely centered around the budget and there notbeing enough guaranteed money available to do all the things we would want toextend and improve on the current program," concludes Verett. "Through theyears PCG has developed strong relationships with key leaders in Congress andtheir staff members which allow us to effectively communicate cotton's issues.The coming weeks are a culmination of those ongoing efforts and PCG is wellpositioned to represent High Plains cotton producers."

MAYAVERAGE COTTON PRICE PLUNGES;
INCREASES LIKELIHOOD FOR MAXIMUM 2006 CC PAYMENT

Friday, July 6, 2007                                    By Shawn Wade

      TheMay Average Price Received by farmers for Upland cotton plunged 2.5 cents perpound from the previous month while the number of bales marketed during themonth rose slightly to 1.55 million for the month.

      Addingin these new marketing and price figures results in a lowering of theyear-to-date Weighted Average Price Received to 47.39 cents per pound.Cumulative Upland cotton marketings through May 2007 total 13.406 million balesaccording to the USDA National Agricultural Statistics Service.

      Thedownward movement of the Average Price Received significantly increases thelikelihood of the 2006 Counter-cyclical program (CCP) payment rate for UplandCotton being 13.73 cents per pound, the maximum allowed by current law.

      Onlya near miraculous combination of June-July marketings in excess of 6 millionbales and average prices above 60 cents could pull the Weighted Average PriceReceived calculation close to the 52-cent Upland Cotton Base Loan rate, whichis the point where the calculated CCP payment rate for cotton would begin todecline.

      For cotton the12-month Weighted Average Price will reflect price and marketings for the 2006marketing year that began August 1, 2006 and ends July 31, 2007.

      The following table shows theaverage price received each month by farmers and the associated weightedaverage price based on prices and cumulative marketings from August 1, 2006through May 31, 2007.

Average Price Received for 2006-crop Upland Cotton

(Weighted by Marketings)

 

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

1,557

7,882

49.70

47.81

February

1,253

9,135

48.00

47.84

March

1,566

10,701

47.40

47.77

April

1,155

11,856

47.30

47.73

May

1,550

13,406

44.80

47.39

June

na

na

45.10*

na

Source: National AgriculturalStatistics Service; * = preliminary