CCC Implements Reduced Maximum Monthly
Storage Credit Rates For Cotton August 28

Friday, August 28, 2009                             by Shawn Wade

      When Congress approved the 2008 Farm Bill one of the cotton industry's goals was to include language in the bill that would shore up the legislative authority for providing cotton storage credits when the Adjusted World Price of cotton dips below the base loan rate of 52.00 cents per pound.

      Part of this statutory, shoring up process was a planned reduction in the maximum storage credit amount that the Commodity Credit Corporation (CCC) would provide under the provisions.

      The first of these planned reductions goes into effect today, August 28, with the implementation of a maximum cotton storage credit rate of $2.39 cents per bale per month. The lower credit rate equates to a ten percent reduction from the previous $2.66 maximum credit rate established by CCC in 2006.

      The new $2.39 maximum monthly storage credit rate will remain in effect for the 2009, 2010 and 2011 crop years. After that the 2008 Farm stipulates a further reduction to $2.12 beginning with the 2012 marketing year.

      Only producers with cotton stored at a warehouse with a monthly storage credit charge above the new $2.39 CCC maximum credit allowance have a potential to be impacted by this change. Cotton stored at warehouses with monthly storage rates that are below the new $2.39 maximum storage credit limit will be unaffected by this week's changes.

      Digging deeper, it appears that there are two scenarios where producers with cotton in warehouses charging monthly storage fees above the CCC maximum storage credit amount would be impacted.

      The first would be in the event a producer sells loan cotton that can be redeemed under conditions where storage credits are available. In this situation the grower would most likely see a slightly lower offer price from a buyer for the cotton they are selling to account for the difference between actual accrued storage charges against the cotton and the amount of the CCC storage credit available.

      The second situation is in the case of a CCC loan forfeiture that occurs when storage credits are available. In a loan forfeiture situation CCC takes possession of the bale and pays all of the charges on the warehouse receipt that are owed against the bale including charges for receiving, compression and storage.

      After taking possession, USDA will then seek reimbursement of these expenditures by billing the producer for the charges, excluding only storage charges equal to the amount of the available cotton storage credit.

      Until passage of the 2008 Farm Bill, cotton storage credits had been provided under discretionary authority assigned to the Secretary of Agriculture. It is hoped that codifying the storage credit provision in the farm bill will prevent future attempts to reduce or eliminate the credits through the Congressional budgeting process.

      Since storage credits are only triggered when cotton prices are extraordinarily low, they help growers market their crops at competitive prices and facilitate the orderly sale and marketing of U.S. loan cotton. By helping keep U.S. cotton competitive in the market, storage credits help minimize cotton loan forfeitures and reduce overall loan program expenditures by USDA.

 

2009 High Plains Event Calendar

Event:

Date:

Plains Ginners Assn. Annual Meeting

 

September 1 – Reese Technology Center

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

September 16 – Reese Technology Center

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

 

 

Industry Field Days:

Date:

Texas AgriLife Extension Center – Lubbock, Centennial Celebration

 

September 17 – Registration begins at 10:00 a.m.

Americot / NexGen Field Day

 

September 22 – corner of 146th Street and Martin Luther King Blvd., Lubbock

 

Monsanto/D&PL Field Days

 

September 22 – Consultant

September 23 – Producer

 

Bayer CropScience/Fibermax Field Days

 

October 1

October 2

 

All-Tex Seed Field Day

October 7

 

September To Provide Three Waste Pesticide
Collection Opportunities In Texas Panhandle

Friday, August 28, 2009                       by Roger Haldenby

      The Texas Commission on Environmental Quality has announced upcoming collections of Agricultural Waste Pesticides.

      The TCEQ organizes free, regional collections of unwanted or unused (waste) pesticides throughout the state as part of the Agricultural Waste Pesticide Collection program.

      The free collections, conducted rain or shine, give agricultural producers who use pesticides in Texas an opportunity to dispose of unwanted products that may pose a hazard to them, their families, and their surrounding farming and ranching communities. The program is strictly voluntary and no one is required to participate. All this is done at no expense to them.

      The participants do not have to identify themselves. However, there is a short survey in which the participants are asked questions such as: 1. "What county are you from?"; 2. "How long has your waste been stored?"; 3. "How did you hear about today's event?"; 4. "What type of material are you bring in today?"

      The reason for asking the participant the fourth question - regarding the type of material brought in - is to determine how to properly handle it. Read about safely rinsing and recycling agricultural chemical containers at:

http://www.tceq.state.tx.us/assistance/AgWaste/rinsed-containers.html

      With collection hours from 8:00 am to 1:00 pm, the next scheduled collection events in PCG's area are:

Monday, September 14, 2009 - Moore County

Moore County Gin, 11800 US Hwy 287, Dumas, TX (six miles north of Dumas on Hwy287). Contact Moore County Extension Agent Marcel Fischbacher at 806-935-2594, or mhfischbacher@ag.tamu.edu, for more information.

Wednesday September 16, 2009 - Deaf Smith County

Deaf Smith County Bull Barn, 108 Dairy Road, Hereford, TX. Contact Deaf Smith County Extension Agent Rick Auckerman, at 806-364-3573, or r-auckerman@tamu.edu, for more information.

Monday October 12, 2009 - Lubbock County

Crop Production Services, 880 Industrial Drive, Slaton, TX. Contact Lubbock County Extension Agent Mark Brown at 806-775-1680, or cm-brown@tamu.edu, for more information.

Wednesday October 14, 2009 - Gaines County

Agriliance, 101 Loop Hwy (US 83), Seagraves, TX. Contact Gaines County Extension Agent Terry Millican at 432-758-4006 ext. 238, or gaines@ag.tamu.edu, for more information.

 

Pre-Registration Window For 57th WTACI
Annual Conference Closes September 1, 2009

      The 57th Annual Agricultural Chemicals Conference, organized by West Texas Agricultural Chemicals Institute, has been scheduled for Wednesday, September 16, 2009.

      The conference will take place at the Reese Technology Conference Center located at 9801 Reese Boulevard North (West 4th Street) Lubbock, Texas.

      Conference planners are encouraging attendees to take advantage of the WTACI's on-line registration process at: http://wtaci.tamu.edu/registration.html

      A brochure version of the 2009 WTACI Program and Registration Form in PDF format is also available and can be downloaded at: http://wtaci.tamu.edu/pdf/09program.pdf

      The pre-registration fee for this year's conference is $75 for registrations completed on-line or postmarked before September 1. The Day-Of-Conference registration fee for registrations postmarked or completed on-line after September 1 is $95.00 and credit cards will be accepted.

      The WTACI program will also qualify participants to receive a number of CEU credits for holders of Certified Crop Advisor (CCA) and private pesticide applicator licenses.

 

August 27 Upland Cotton AWP Announcement

      The Department of Agriculture's Commodity Credit Corporation announced the adjusted world price (AWP) for Strict Low Middling (SLM) 1-1/16 inch (leaf grade 4, micronaire 3.5-3.6 and 4.3-4.9, strength 25.5-29.4 grams per tex, length uniformity of 79.5-82.4 percent) upland cotton (base quality), adjusted to U.S. quality and location, the fine count adjustment (FCA), the coarse count adjustment (CCA), and the loan deficiency payment rate that will be in effect from 12:01 a.m., Eastern Time, Friday, August 27, 2009, through midnight, Eastern Time, Thursday, September 3, 2009.

 

UPLAND COTTON ANNOUNCEMENT

August 27, 2009

                                                                                                   Cents/lb.

Adjusted World Price (AWP)                                                       46.13

Fine Count Adjustment (FCA) 2008 Crop                              0.00

Fine Count Adjustment (FCA) 2009 Crop                              0.00

Coarse Count Adjustment (CCA)                                                    0.00

Loan Deficiency Payment Rate                                                    5.87

 

This week's AWP, FCA, and CCA are determined as follows:

FE Price                                                                                    62.50

Adjustments:

         Avg. costs to market                             -13.07

         SLM 1-1/16 inch cotton                - 3.30

Sum of Adjustments                                                                 -16.37

ADJUSTED WORLD PRICE                                                46.13

                                                                               2008          2009

Loan Schedule Premium
for SM 1-1/8" Cotton                                               1.75           1.55

Market Premium for SM 1-1/8" Cotton:

         FE Fine Count Price                    65.03

         FE Price                                       - 62.50

Less Market Premium
(cannot be less than zero)                                               2.53           2.53

FINE COUNT ADJUSTMENT
(cannot be less than zero)                                      0.00           0.00

FE Price                                                                                   62.50

FE Coarse Count Price                                                           - 64.28

Adjustment to
SLM 1-1/32 inch cotton                                                             - 5.30

COARSE COUNT ADJUSTMENT
(cannot be less than zero)                                                                 0.00

      The Food, Conservation, and Energy Act of 2008 provides that the AWP may be further adjusted if the Secretary determines adjustment is necessary to 1) minimize potential loan forfeitures, 2) minimize accumulation of Government stocks, 3) ensure free and competitive marketing of upland cotton, both domestically and internationally, and 4) ensure an appropriate transition between current-crop and forward-crop price quotations. No adjustment has been made this week.

      Because the AWP for the period is less than 52.00 cents per pound, which is the base quality loan rate, the loan repayment rate during this period is equal to the AWP, adjusted for the specific quality and location. The loan repayment amount will be further adjusted by the application of a storage credit, and interest will be waived.

      Because the AWP is less than the 2008-crop loan rate, cash loan deficiency payments (LDPs) will be paid to eligible producers who agree to forego obtaining price support loans with respect to the 2008 crop. The payment rate of 7.54 cents per pound is the difference between the base loan rate of 52.00 cents and the AWP.

      The next announcement of the AWP, FCA, CCA, and LDP The next announcement of the AWP, FCA, CCA, and LDP rate for upland cotton will be on Thursday, September 3, 2009, at 4:00 p.m., Eastern Time.