PCG Estimates 2007-crop Upland Cotton
Counter-cyclical Program Payment Rate

Friday, September 5, 2008                              By Shawn Wade

      A 400,000-bale drop in marketings from June to July, combined with a slight decrease in the average price received for the month, nudged the 2007-crop Weighted Average Price Received by farmers for Upland cotton up to 57.11 cents based on preliminary marketing and price information released by the USDA National Agricultural Statistics Service August 29.

      Based on the preliminary marketing figures reported for the 2007 Upland cotton marketing year by USDA NASS, Plains Cotton Growers, Inc. has estimated the final 2007-crop Upland cotton Counter-cyclical payment rate at 8.62 cents per pound.

      The USDA Farm Service Agency is expected to announce the official 2007-crop Upland cotton Counter-cyclical Payment Rate in early October, after the USDA NASS calculates the final Upland cotton Weighted Average Price Received by farmers.

      Based on the 8.62-cent estimated payment rate calculated by PCG, growers who received the 2007 Upland cotton Advance Counter-cyclical payment of 3.09 cents in February 2008 should expect to receive an additional 5.53 cents per pound when their final 2007-crop Counter-cyclical payment is made.

      The 2007 Counter-cyclical Program's estimated final payment rate of 8.62 cents was calculated by taking the Upland Cotton target price of 72.4 cents and subtracting the Upland Cotton Direct Payment rate of 6.67 cents per pound and then subtracting the higher of the Weighted Average Price Received or the Upland Cotton national base loan rate.

      Cumulative Upland cotton marketings through June 2008 total 11.848 million bales according to the USDA National Agricultural Statistics Service.

      NASS's preliminary 2007-crop marketing data reported through July 31 underscores the dramatic impact that the March cotton market upheaval had on cotton sales. Prior to March, total marketings for the 2007 crop year had actually been some 200,000 bales ahead of the 2006-crop marketing pace reported for the same period.

      Even though prices remained steady following the March upheaval in the cotton futures market, year-end marketings ended up a significant 3.902 million bales below the 2006-crop sales total of 15.750 million bales.

      The following table shows the average price received each month by farmers and the associated weighted average price based on prices and cumulative marketings from August 1, 2007 through the end of July 2008.

      The 2007 Counter-cyclical payment rate authorized under the 2002 Farm Bill will be based on the 12-month Weighted Average Price Received by growers. For cotton the 12-month Weighted Average Price will reflect price and marketings for the 2007 marketing year. The 2007 Upland cotton marketing year began August 1, 2007 and ended July 31, 2008.

Upland Cotton Average Price Received by
Growers Estimated Through July 2008

(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

1.339

9,315

61.90

56.16

March

488

9,803

60.50

56.37

April

486

10,289

62.10

56.64

May

525

10,814

60.50

56.83

June

717

11,531

60.40

57.05

July

317

11,848

59.30

57.11

Source: National Agricultural Statistics Service

FSA Advises Producers To Remember Key
DCP and Disaster Program Dates/Deadlines

Friday, September 5, 2008                              By Shawn Wade

      According to the USDA Farm Service Agency, growers interested in participating in 2008 disaster assistance programs or the 2008 Direct and Counter-cyclical Program (DCP) have two key deadlines to keep in mind.

2008 Disaster Assistance Program

      The first deadline producers need to keep in mind is September 16, 2008, which is the deadline for growers to pay required federal crop insurance and Non-insured Assistance Program (NAP) fees necessary to establish eligibility for the new Permanent Disaster Program included in the Food, Conservation and Energy Act of 2008 (the 2008 Farm Bill).

     Since the 2008 Farm Bill was enacted after the application periods had closed for those programs, producers who did not have NAP or crop insurance coverage in place could not comply with this requirement in order to be eligible. However, the Farm Bill authorizes a waiver that allows producers to pay a fee, called a "buy-in" fee, to be eligible for the new disaster assistance programs.

      After 2008 producers who wish to participate in the new disaster programs will need crop insurance or non-insured crop disaster assistance (NAP) coverage on all crops on all farms in all counties in which they have an interest.

     Payment of the applicable fees by the September 16 cut-off date will allow a producer to be eligible for financial assistance under the Supplemental Revenue Assistance Program (SURE), Livestock Forage Disaster Program (LFP), Emergency Assistance for Livestock, Honey Bees, and Farm-raised Fish (ELAP) and the Tree Assistance Program (TAP).

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      Those who miss this opportunity will not be eligible for 2008 disaster assistance. Producers are also reminded that the payment of the applicable buy-in fee does not provide the producer crop insurance or NAP coverage for the 2008 crop year; it only affords eligibility for the disaster programs.

      The determination of required buy-in fees will be based on the insurability or NAP eligibility of the crop on the sales closing deadline. Therefore, subsequent crops must have coverage or have the buy-in fee collected in order for the producer to maintain SURE eligibility.

      If the producer listed all crops, including the subsequent crops, on the summary of coverage then the producer is considered to have coverage, regardless of the indemnity election made by the producer. If all crops, including subsequent crops, are not listed on the summary of coverage the producer is required to pay the buy-in fee in order to be eligible for SURE.

2008 DCP Sign-up Period

      Producers have until September 30, 2008 to signup in the Direct and Counter-cyclical Program (DCP) for this fiscal year. Participants in the 2008 DCP can expect their final direct payment to be directly deposited into personal bank accounts sometime during the first few weeks of October.

      Producers who did not elect to receive an advance direct payment will receive their entire direct payment for the year in one lump sum after the end of the fiscal year (September 30).

      The direct payment for a crop equals 85 percent of the farm's base acreage times (x) the farm's direct payment yield times (x) the direct payment rate.

      If there are any unearned payments, Commodity Credit Corporation will automatically subtract those amounts from the final DCP payments a producer is about to receive.

 

2008 County Crop Tours and Field Days

      The table below contains a partial listing of the events already scheduled. Growers interested in attending any of these Texas AgriLife Extension events should contact the appropriate County Extension office to request additional details.

      For more information about the industry Field Days listed below contact your local sales representative or dealer.

      If you have information that needs to be added or corrected regarding any of the events already listed or know of a date you would like to have added to this calendar please contact Shawn Wade at 806-792-4904.

2008 High Plains Event Calendar

Event:

Date:

Yoakum Co. Crop Tour

September 9

 

 

Industry Field Days:

Date:

West Texas Agricultural Chemicals Institute Conf., Reese Technology Center, Lubbock

September 10 - For more information go to: http://wtaci.tamu.edu

Monsanto/D&PL Field Days

 

 

 

September 23 – Consultant

September 24 – Producer

PLEASE CALL 740-1600 to RSVP and confirm your attendance

Bayer CropScience/Fibermax Field Days

September 30

October 2

 

Visit PCG on the Web: WWW.PLAINSCOTTON.ORG