WTO ARBITRATION PANEL SETS AWARD LEVEL
IN BRAZIL CASE; CROSS-RETALIATION NOT AUTHORIZED

Friday, September 4, 2009                              by Shawn Wade

      The fact that a World Trade Organization Arbitration Panel limited the amount of retaliatory tariffs Brazil is entitled to impose on U.S. goods to roughly ten percent of Brazil's original request was a welcome development in the latest chapter of the long-running Brazil WTO saga. The WTO panel's decision was issued August 31 and included a maximum compensation level of roughly $295 million, based on 2005 data.

      Delving further into the report shows that the arbitration award figure is comprised of two components: the impacts of U.S. export credit guarantee programs ($147 million) and the impacts of U.S. cotton support programs ($147 million).

      The WTO Panel adopted a formula approach that requires the parties to conduct calculations to determine whether Brazil can cross-retaliate against intellectual property rights of U.S. companies. The WTO award is far less than the $2.7 billion in authority requested by Brazil with no cross-retaliation authorized at this point.

      From a U.S. perspective, the downside of the report is that the award amount the WTO panel derived is still approximately ten times more than the level suggested by the U.S. Trade Representative (USTR) during the panel's deliberations.

      Determining the exact level of retaliation Brazil will be entitled to impose from this point forward will be determined at meetings to be held in late September.

      In a National Cotton Council statement on the decision, NCC Chairman Jay Hardwick said, "We are pleased that the arbitration award is far less than requested by Brazil, that the Panel provided no award with respect to the Step 2 cotton program, and that Brazil is not authorized to cross-retaliate at this time. This award, however, is based almost exclusively on 2005, the peak of U.S. cotton production, and doesn't consider any U.S. policy changes made in the 2008 farm bill."

      The NCC notes that the U.S. cotton program and export credit guarantee programs have changed considerably since 2005. The NCC further states that since 2005 U.S. cotton production is down 45 percent and the export credit guarantee program is operating at no net cost.

      NCC President Mark Lange said that it was time the WTO began looking at current market and subsidy conditions around the world and seriously consider the market impact of increased cotton production in countries like Brazil, India and China that have occurred as U.S. cotton production and support have fallen.

      "Today's [U.S.] programs," concluded Hardwick, "cannot possibly be determined to be causing injury in the world market."

      The NCC statement notes that the U.S. cotton industry will continue to work with USTR and others during the next phase of the process to ensure that the many changes previously made to U.S. commodity programs are better understood by the WTO.

 

EPA APPROVES MONSANTO PLAN TO
REMOVE ORIGINAL BOLLGARD TECHNOLOGY FROM MARKET

Friday, August 31, 2009                            

      The U.S. EPA has approved an amendment to the registration of Bollgard¨ cotton that will allow the planting of Bollgard¨ varieties in the 2010 growing season, and provides detail on the steps necessary to facilitate the final discontinuation Bollgard¨ varieties in the U.S.

     According to Monsanto the transition is necessary to maintain the long-term effectiveness of biotech traits in cotton that control key insect pests by moving away from a single mode of action to a dual modes of action on Bt cotton products.

     Under the EPA approved plan, all sales of Bollgard¨ cotton varieties intended for planting in the spring of 2010 must be completed by September 30, 2009.

     The EPA has determined that Bollgard varieties may only be approved for planting in Alabama, Arkansas, Florida (north of Tampa), Georgia, Kentucky, Louisiana, Maryland, Missouri, Mississippi, North Carolina, South Carolina, Tennessee, Texas (excluding the ten prohibited panhandle counties of Dallam, Sherman, Hansford, Ochiltree, Lipscomb, Hartley, Moore, Hutchison, Roberts and Carson) and Virginia.

      Bollgard seed will not be sold for planting in Arizona, California, Colorado, Kansas, Oklahoma and New Mexico in 2010 because pink bollworm eradication programs are under way, or EPA determined that there was very little to no Bollgard planted in these states in previous years.

     Monsanto plans to have a number of people who will be working closely with farmers, retailers and others to provide local information on Deltapine variety performance and to help growers understand the varieties that may be best suited for their farms in these restricted areas.

     Information regarding the allocation process, ordering, invoicing, GPOS reporting, delivery and licensing/replanting will be posted at http://www.deltapine.com or http://www.monsanto.com/cotton.

 

SEPTEMBER 3 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, September 4, 2009, through midnight, Eastern Time, Thursday, September 10, 2009.

 

 

UPLAND COTTON ANNOUNCEMENT

September 3, 2009

                                                                                                   Cents/lb.

Adjusted World Price (AWP)                                                       46.06

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                                                    5.94

 

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

FE Price                                                                                    62.43

Adjustments:

         Avg. costs to market                             -13.07

         SLM 1-1/16 inch cotton                - 3.30

Sum of Adjustments                                                                 -16.37

ADJUSTED WORLD PRICE                                                46.06

                                                                               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                    64.46

         FE Price                                       - 62.43

Less Market Premium
(cannot be less than zero)                                               2.03           2.03

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

FE Price                                                                                   62.43

FE Coarse Count Price                                                           - 64.23

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 10, 2009, at 4:00 p.m., Eastern Time.

 

 

 

2009 HIGH PLAINS EVENT CALENDAR

Event:

Date:

Yoakum County Crop Tour

 

September 9

Crosby County Crop Tour

September 10

 

Lamb County Crop Tour and Harvest Aid Meeting

 

September 11

Moore/Sherman Counties Cotton Tour

September 14

 

Cochran County Crop Tour

September 15

 

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

September 16 – Reese Technology Center

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

Texas AgriLife Extension Center – Lubbock, Centennial Celebration

 

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

Floyd County Ag Tour

 

September 22

Motley/Dickens/Briscoe/Hall Counties Crop Tour

September 29

 

 

Industry Field Days:

Date:

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

 

 

Waste Pesticide Cleanup Dates:

Information:

 

September 14 - 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 (mhfischbacher@ag.tamu.edu) for more information.

 

September 16 - 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 (r-auckerman@tamu.edu) for more information.

 

October 12 - Lubbock County

Crop Production Services, 880 Industrial Drive, Slaton, TX

Contact Lubbock County Extension Agent Mark Brown at 806-775-1680 (cm-brown@tamu.edu) for more information.

 

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 (gaines@ag.tamu.edu) for more information.