2005/2006DISASTER ASSISTANCE UPDATE

Friday, August 3, 2007                             By Shawn Wade

      As of today there is littleto report about the 2005/2006Crop Disaster Program except that USDA is still inthe process of writing and finalizing the regulations that will governimplementation of the program.

      Based on conversations withCongressional staff and personnel within the USDA Farm Service Agency itappears that sign-up for the crop loss portion of the program is unlikely tooccur before the end of September. Once final rules are agreed upon, it willsimply take some time to complete the final software revisions, distributeinformation to State and County offices and train FSA personnel to implementthe program.

      Such an open-ended timelinemeans growers and agricultural lenders eager to know when the ball will getrolling will have to wait a little longer, or at least until USDA decides toofficially announce the implementation timeline.

 

HIGHPLAINS CROP ON TRACK DESPITE BELOW
AVERAGE TEMPERATURE TREND IN 2007

Friday, August 3, 2007                             By Shawn Wade

      With the month of Augustnewly arrived, the 2007 High Plains cotton crop continues to look good in thefield and is supporting a cautiously optimistic outlook among producers.

      A number of factors haveplayed pivotal roles in the development of the 2007 crop, which is generallyregarded as being in good shape but not quite where growers would prefer it tobe.

      After planting in theneighborhood of 3.1 million acres to cotton, farmers across the High Plains arestill seeing a lot of potential in the crop. In order for all that potential tobe realized however the area still needs a little extra boost from MotherNature when September and October roll around.

      Following the above normalrainfall pattern that lingered in the area early in the season, July's openweather was a welcome change. July temperatures were marginally below normal,but still helped the crop make up some of the ground it lost early on.

      Another positive factor isthat this year's crop has been relatively stress free thanks to the aboveaverage rainfall and below normal temperatures. This allowed growers to save aconsiderable amount of money on irrigation expenses and many didn't feel theneed to turn on wells until just recently.

      This year's early Augustsnapshot indicates things are looking good, even though most crop watcherswould likely admit to expecting far less cotton than usual to be ready forharvest aid treatments in late-September and early-October.

      The success or failure of the2007 crop will not hinge on how the crop has pulled through the challengespresented up to this point. As always the High Plains will rest its fortunes onwhat happens from this point forward.

      Summing up what the cropneeds is fairly simple. A few timely rains, seasonal August temperatures and anextended period of above average temperatures and sunny days after Labor Daywould be a welcome finale to another challenging High Plains cotton productionseason.

 

JUNE MARKETING/PRICEFIGURES RELEASED

Friday, August 3, 2007                             By Shawn Wade

      Asthe 2006 cotton marketing year eased to a close earlier this week, USDA'sNational Agricultural Statistics Service released the July Agricultural Pricesreport containing Upland cotton price and marketing information for the monthof June.

      Accordingto the July report, the Average Price Received by farmers for Upland cotton inJune rebounded slightly from May's sharp decline and came to rest at 46.4 centsper pound. Marketing figures for the month went the opposite direction,however, settling at an estimated 1.067 million bales.

      IncorporatingJune's numbers moves the 2006-marketing year's Weighted Average Price Receivedcalculation down slightly to 47.32 cents per pound - 4.68 cents below theUpland cotton base loan rate of 52 cents per pound. Cumulative Upland cottonmarketings through June 2007 total 14.473 million bales according to the USDANational Agricultural Statistics Service.

      Thismonth's marketing figures reinforce the fact that the 2006 Counter-cyclical program(CCP) payment rate for Upland cotton will be 13.73 cents per pound, the maximumallowed under the 2002 Farm Bill.

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

      Thefollowing table shows the average price received each month by farmers and theassociated weighted average price based on prices and cumulative marketingsfrom August 1, 2006 through June 30, 2007.

Average Price Received for2006-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

1,067

14,473

46.40

47.32

July

n/a

n/a

46.80*

n/a

Source: National AgriculturalStatistics Service; * = preliminary