HPWD Approves Rule 5 Enforcement Policy,
Suspends Penalties for Two Years
Friday, February 24, 2012 By Mary Jane Buerkle
Many area producers with irrigated land can breathe a little more easily for at least the next two years, as the High Plains Underground Water Conservation District Board of Directors on Tuesday established a two-year moratorium on the enforcement policy and penalties associated with a rule amendment approved last summer.
The two-year suspension does not mean that the rules are not currently in effect, but that producers will not be penalized in 2012 and 2013 for exceeding the district's allowable groundwater production rate, failing to install meters on new wells and/or well systems, or not reporting their groundwater production as specified in the District's Rule 5.
The HPWD Board also approved an 18-month study in which an agricultural stakeholder advisory group will assist district staff in determining a methodology to define areas in the district where the Ogallala Aquifer cannot produce more than 15 acre-inches per acre yearly and to evaluate the potential for alternative reporting methods.
The HPWD's Rule 5 has come under increased scrutiny recently as producers have raised concerns about the potential scope and economic impact of the new regulations, which went into effect January 1. The HPWD board approved the rules in order to meet their 50/50 Desired Future Condition for underground water resources within the HPWD service area.
The PCG Board of Directors voted unanimously in January to submit requests for information and recommendations for changes to Rule 5, including suggestions on allowing permanent alternative metering systems, governance related to the size of the HPWD board and the activation of county advisory committees, and exceptions to the contiguous land rules. The PCG board also requested a moratorium on the implementation of Rule 5 for 2012.
PCG also has created a Water Advisory Committee to monitor and recommend additional changes to the HPWD rules. Selected members of that committee also will serve with HPWD's agricultural stakeholder advisory group.
Comparing possible profits from South Plains crops for the 2012 season will be the focus of a Texas AgriLife Extension Service workshop set for 9 a.m.-3 p.m. March 20 at the Texas AgriLife Research and Extension Center, 1102 East Farm-to-Market 1294, Lubbock.
"Each year, we offer producers the tools, data and skills they'll need to find the potential profitability of alternative crops here on the South Plains," said Dr. Jackie Smith, AgriLife Extension economist at Lubbock.
He said only one workshop will be offered this year and he urges producers to take advantage of it. The workshop will offer printed proceedings, crop budgets, a CD of Excel crop budgets, breakeven tables, reference files and Internet links to participants.
"Workshop attendees will essentially be getting instruction on everything they'll need to make sound crop decisions before the tractor ever enters the field," Smith said.
"We have designed the support material so producers can easily use the spreadsheet on their own computers," he said. "The Excel spreadsheet will also let users examine the impact of different crop-share rental or cash-lease arrangements on the landlord's and renter's net income."
Other topics will include input price trends and projections for 2012 along with basis, cash contracts and forward pricing using futures and options.
The workshop is funded through a grant from the Texas State Cotton Support Committee. Smith said the grant enables the workshop team to develop a crop-budget projection tool, conduct the training workshop, keep updated data and make the information readily available to producers.
"Producers can use their spreadsheet to fine-tune their own cost analysis to make accurate comparisons of the dollar potential of cotton, grain-sorghum, corn, peanuts and other crops," he said. "In all, there are four cotton budgets and 23 for other crops that can quickly be evaluated with expected input costs and projected crop prices."
Smith said participants will also be introduced to the iPhone/iPad app the team developed for producers to use in the field.
AgriLife Extension risk management specialists Jay Yates and Jeff Pate of Lubbock will assist Smith with the workshops.
Individual registration is $20 by check at the door. The fee includes lunch and refreshments.
To RSVP or for more information call Smith or Viki Bartlett at 806-746-6101.
China, Economy, Weather Keys in
NCC's 2012 Outlook
In the Annual Meeting's joint session of delegates, National Cotton Council Vice President of Economics and Policy Analysis Dr. Gary Adams said U.S. cotton's 2012 outlook will be influenced primarily by China's national reserves stocks, uncertainty over the general economy and weather developments in the Southwest Ð where the year is not starting out as normal, particularly in Texas and Oklahoma.
Adams said the NCC sees a potential 2012 US cotton crop of 18.30 million bales, with 17.51 million upland bales and 783,000 extra-long staple bales. When combined with international 2012 production of 101.1 million bales, the world crop for 2012 is estimated at 119.4 million bales. Regarding 2012 US offtake, the NCC sees exports expanding to 12.9 million bales and mills consuming 3.5 million bales versus the current marketing year's 3.4 million bales.
The NCC sees 2012 world mill use of 113.8 million bales, an increase of 3.5% from 2011, but Adams said, "growth of this magnitude will only be achieved with competitive pricing and a rebuilding of the textile pipeline." Barring some major production problems Ð which is still a possibility given La Nina Ð global production is projected to exceed consumption and allow world ending stocks to build to 64.1 million bales.
"While that is a level comparable to 2006-09, it is important to remember that as much as 30% of those stocks could be held in China's government reserves," Adams said. "By late January, more than 11 million bales have been purchased into the China reserve, with some speculating that total purchases could exceed 15 million bales."
Adams noted that while China's reserves policy is providing short-term support to the cotton market, China's implementation of this policy "is the single largest wildcard in the cotton market."
Regarding prices, he noted that though the forecasted stocks/use relationship is likely to dampen upside price potential, current polyester prices and cotton's need to remain competitive with grains are supportive of prices on the downside.
For the 2012 marketing year, Adams said the strength of cotton demand will hinge on the global economy's overall health and be dependent on cotton prices that are less volatile and more competitive with polyester than what was observed in 2011. He reminded delegates about 2011's sharp price swings saying, "That type of volatility did not serve the interests of any industry segment. Few growers had cotton to sell at those very high prices. Some textile mills were caught up in a wave of panic buying without corresponding yarn orders. Also, cotton merchandisers were caught up in the fallout from the dramatic price swings as sales cancellations and arbitrations sharply increased."
Additional details of the 2012 Cotton Economic Outlook are at http://www.cotton.org/econ/reports/annual-outlook.cfm.
Area Ag Conferences Scheduled
The following area ag conferences have been scheduled for February and early March:
February 27 Ð Irrigation Strategies, Moore County Ð Contact Marcel Fischbacher, County Extension Agent-AG, 806-935-2594.
February 28 Ð Sandyland Ag Conference, Seminole Ð Contact Terry Millican, County Extension Agent-AG, 432-758-4006.
February 29 Ð Gray County Ag Conference, Pampa Ð Contact Brandon McGinty, County Extension Agent-AG, 806-669-8033.
February 29 Ð Ag Production Meeting, Turkey Ð Contact Josh Brooks, County Extension Agent-AG, 806-259-3015.
March 1 Ð Alternative Crops Conference, Bailey County Coliseum, Muleshoe Ð Contact Curtis Preston, County Extension Agent-AG, 806-272-4584.
March 1 Ð Improved Forages, Wheeler Ð Contact Kenneth Brdecko, County Extension Agent-AG, 806-826-5243.
March 1 Ð Beef 2015 Nutrition, Wildorado Ð Contact Michael Wilkes, County Extension Agent-AG, 806-267-2692.
March 2 Ð Wildlife Range Health, Silverton Ð Contact Nathan Carr, County Extension Agent-AG, 806-823-2522.
March 2 Ð Armstrong County Ag Conference, Claude Ð Contact Whitney White, County Extension Agent-AG, 806-226-3021.
March 5 Ð Grain Sorghum Conference, Perryton Expo Ð Contact Scott Strawn, County Extension Agent-AG, 806-435-4501.
March 6 Ð Range Recovery Workshop, Post Ð Contact Greg Jones, County Extension Agent-AG, 806-495-4400.
If you have another conference to add to this list, please call PCG at (806) 792-4904 and ask for Mary Jane Buerkle or email firstname.lastname@example.org. A complete conference list is at http://www.plainscotton.org/agconferences.html.