Congress Moving Forward; Farm Bill Budget
Set To Include $10 Billion In New Funds

Friday,February 29, 2008                         By Shawn Wade

      A meeting of highlevel Democratic leadership from the House of Representatives and Senate earlythis week ended with a tentative agreement to seek an additional $10 billionfor the farm bill and instructions to the Chairmen of the Agriculture, Ways andMeans, and Finance Committees to “get it done.”

      Following the meetingHouse Agriculture Committee Chairman Collin Peterson, (D-MN) said he willcontinue working closely with the Agriculture Committee’s ranking member, Rep.Bob Goodlatte (R-VA), and the Administration to find agreement on how the $10billion in additional funds could be secured.

      The pending March 15expiration of farm bill funding authority and the release of new budgetprojections from the Congressional Budget Office were key motivators and theprimary reason for the meeting earlier this week.

      The meeting wasattended by House Speaker Rep. Nancy Pelosi (D-CA), Senate Majority LeaderHarry Reid (D-NV), Peterson (D-MN) and Senate Agriculture Chairmen Tom Harkin(D-IA), House Ways and Means Committee Chairman Rep. Charles Rangel (D-NY), andSenate Finance Committee Chairman Max Baucus (D-MT),

      Since that time Rep.Goodlatte has reaffirmed his willingness to work with Chairman Peterson todevelop a bill that both Congress and the Administration can agree to support.

      Unfortunately forCongressional leaders and Agriculture Committee members wanting to develop a compromisewith the Bush Administration on farm bill funding issues, USDA Deputy Secretaryof Agriculture Chuck Conner failed to provide much hope that compromise waspossible when he reiterated the Administration’s position that only programcuts would be deemed acceptable to pay for increases elsewhere.

      Such a hard linestance probably will not set to well with High Plains members of the HouseAgriculture Committee, Rep. Randy Neugebauer (Lubbock) and Rep. Mike Conaway(Midland) who have both issued statements in recent weeks noting the importanceof getting the farm bill completed.

      Equally comforting toHigh Plains agriculture interests is the strong language both area Congressmenhave used regarding the importance of the Administration getting on board withthe bipartisan compromise that Congress will ultimately develop once thefunding details are finalized.

      Both Neugebauer andConaway have clearly indicated that if the Administration carries out the vetothreat, despite the bipartisan efforts of Congress, they would ultimately actin the interest of their district and their agriculture constituents.

      In regard to how theextra funding would be used, it is important to note that commodity programparticipants aren’t expected to directly benefit from the additional funding.Instead the main benefit of the additional funds will be paving the way towarda final agreement and passage of the bill.

NCC Chairman: WTO Negotiations
Could Undermine Farm Bill Efforts

Friday,February 29, 2008                        

      National Cotton Council Chairman Larry McClendon reiterated the NCC’scommitment to continue working closely with Congress to ensure final passageand implementation of the farm bill and a successful conclusion to the WorldTrade Organization (WTO) Doha negotiations.

      However,McClendon warned that WTO negotiations could still overshadow the U.S. cottonindustry’s two-year effort to deliver sound policy in the new U.S. farmlegislation.

      Henoted the U.S. agricultural community has been largely supportive of its tradenegotiators’ aggressiveness in the WTO Doha Round – including gong alongwith significant proposed cuts in domestic agricultural support programs putforward by the U.S. – as long as the resulting gains in market access areat least as large as the sacrifices in the safety net for U.S. producers.

      TheNCC chairman called on USDA to provide U.S. agriculture with a clear analysisof exactly what gains U.S. agriculture can expect in market access under thecurrent draft negotiating texts under consideration by the WTO.

      Onthe farm bill, McClendon said the farm bills in the House and Senate largelyreflect the provisions sought by the cotton industry and that the Council hasurged Conferees to include reforms that are part of the House or Senate billsin the final bill.

      TheArkansas ginner said the Council also has strongly urged Conferees to continueto reject proposals by the Administration and others for more extreme changesto Adjusted Gross Income (AGI) means tests and to gradually phase-in thechanges that will be made in these areas to allow growers, land owners andlenders to adjust to the new rules and regulations.

 

2007-CROP HIGH PLAINS COTTON QUALITY SUMMARY

 

 

Week Ending February 28, 2008:

 

Office

Bales

Color

Leaf

Staple

Lamesa

50,688

21-31

2.91

35.85

Lubbock

53,710

21-31

2.81

36.08

 

Mike

Strength

Uniformity

Bark

Lamesa

4.11

29.09

80.66

22.7%

Lubbock

4.05

29.28

80.71

10.1%

 

 

Season Totals To Date:

 

Office

Bales

Color

Leaf

Staple

Lamesa

1,443,820

21+

2.44

35.99

Lubbock

3,722,758

21+

2.49

36.01

 

Mike

Strength

Uniformity

Bark

Lamesa

4.19

29.66

80.79

8.3%

Lubbock

4.06

29.54

80.62

3.5%

Source: USDA AMS Cotton Division

 

Upland Cotton Average Price Received by
Growers ThroughJanuary 2008

Friday,February 29, 2008                         By Shawn Wade

      Cumulative Upland cotton marketings for the first sixmonths of the 2007-marketing year totaled 7.916 million bales according toinformation released February 29 by the USDA National Agricultural StatisticsService.

      According to USDA estimates January2008 cotton marketings totaled 1.839 million bales with an average sellingprice of 60.7 cents per pound. So far the 2007 Upland Cotton Weighted AveragePrice calculated through January 2008 stands at 55.14 cents per pound.

      January prices continued toreinforce the fact that prices are steadily moving upward, although no one hasyet been able to determine where the move is likely to end or how much of aneffect it might have on the final 2007 Counter-cyclical Program payment rate.

      With the first six months of themarketing year now past, the calculated 2007 Weighted Average Price is 3.14cents above the 52-cent threshold where 2007-crop Counter-cyclical paymentrates begin to drop. The preliminary mid-month price reported for February 2008was 60.7 cents per pound.

      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 throughJanuary 31, 2008.

      The 2007Counter-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 2007marketing year. The 2007 cotton marketing year began August 1, 2007 and endsJuly 31, 2008.

Average Price Received For 2007-crop Upland Cotton
(Weighted by Marketings)

 

Marketings

Prices

 

(000's of Running bales)

(cents/Lb.)

 

Monthly

Cum.

Monthly

Weighted

August

1,762

1,762

44.90

44.90

September

373

2,135

52.00

46.14

October

949

3,084

55.20

48.93

November

1,464

4,548

57.00

51.53

December

1,529

6,077

59.20

53.46

January

1,839

7,916

60.70

55.14

February

n/a

n/a

60.70*

n/a

Source: National Agricultural Statistics Service;* = preliminary

 

Want the facts aboutthe U.S. farm policy. Get what you need at:

www.farmpolicyfacts.com

 

Cotton Inc To Offer Free CottonMarketing Workshop; Reserve Your Spot Today

      Getyour calendars out and plan to attend this year’s “Cotton Price Risk Managementand Pricing Strategies Seminar” sponsored by Cotton Incorporated, incooperation with Plains Cotton Growers, Inc.

      Thefree seminar is designed to help producers develop and sharpen their individualcotton marketing skills and develop market-based strategies for managing pricerisk for the 2008 marketing season.

      Thisyear’s workshop will be held on Wednesday, April 2, 2008 at the Holiday InnHotel & Towers, located at 801 Avenue Q in Lubbock. The workshop will runfrom 8:30 a.m. through 5:00 p.m. Lunch will be provided to all workshopparticipants.

      Workshoptopics include: “Why are options on cotton futures critical to your business?”;“What can options do for you and how?”; and, “Actionable hedging strategies.”

      Instructorsfor this year’s seminar will be retired Texas A&M Extension Economist Dr.Carl Anderson and Mr. Mike Stevens of Swiss Financial.

      Theprogram will also include a 2008 Production Cost Outlook by Dr. John Robinsonof Texas A&M University; a Market Outlook by Cotton Marketing SpecialistDr. O.A. Cleveland; a presentation on hedging Counter-cyclical payments byKelli Merritt, from CropMark, Inc., in Lamesa; and a session on practicalapplication of the skills and information provided during the workshop byCotton Specialist Mike Stevens.

      Forinformation about the conference contact Jeanne Reeves at Cotton Incorporated(919-678-2370) or Shawn Wade at Plains Cotton Growers, Inc. (806-792-4904).

      Registrationis required for the conference and participants can register by telephone oremail. Telephone registrations should be directed to Kay Wriedt (919-678-2271).Email registrations should be addressed to: kwriedt@cottoninc.com

 

PCG’s 2008 Seed CostCalculator

      Anupdated version of the 2008 Plains Cotton Growers Seed Cost Calculator is nowavailable. Growers interested in comparing prices for their 2008 planting seedoptions can download the calculator at http://www.plainscotton.org.

      The2008 version includes 129 conventional, Roundup Ready, Roundup Ready FLEX,Liberty Link, Bollgard and Bollgard II and Widestrike varieties, as well asnumerous stacked gene versions of these technologies that will be available forsale in West Texas in 2008. Should information on additional varieties becomeavailable, an update to the spreadsheet will be developed and posted on PCG'swebsite.

      ThePCG calculator is an interactive Microsoft Excel spreadsheet that allowsproducers to calculate an estimated cost per acre, for both seed andtechnology, based on published suggested retail prices.