USDA Announces 2014 Cotton

Loan Rate Differentials

Tuesday, April 15, 2014             From the Farm Service Agency

The U.S. Department of Agriculture's Farm Service Agency recently announced the 2014-crop loan rate differentials for upland and extra-long staple cotton. The tables of these loan rate differentials are available on the FSA website at http://go.usa.gov/2Vp.

The differentials, also referred to as loan rate premiums and discounts, have been calculated based upon market valuations of various cotton quality factors for the prior three years. This calculation procedure is identical to that used in past years. The Commodity Credit Corporation (CCC) adjusts cotton loan rates by these differentials so that cotton loan values reflect the differences in market prices for color, staple length, leaf, extraneous matter, micronaire, length uniformity and strength.

The 2014-crop differential schedules are applied to loan rates of 52.00 cents per pound for the base grade of upland cotton and 79.77 cents per pound for ELS cotton. The loan rate provided to an individual cotton bale is based on the quality of each individual bale as determined by Agricultural Marketing Service classing measurements.

Further program information is available from Tiffany Arthur at (202) 720-4284 or by e-mail at tiffany.arthur@wdc.usda.gov.

 

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Participants Praise COTTON USA Brand

and Retailer Leadership Summit

Friday, April 11, 2014              From Cotton Council International

Cotton Council International's first global COTTON USA Brand and Retailer Leadership Summit in Berlin, Germany, brought together leaders from top global brands, retailers and sourcing companies to examine the latest developments in the apparel and home textile industry.

Attendees from Europe, Asia and North America said they were impressed by the quality of the speakers, and 79 percent of the attendees agreed that the event assured them that sourcing cotton and cotton-rich products is a viable long-term business decision.

CCI tailored the event specifically for top decision-makers and offered attendees an opportunity to engage with industry experts, trend forecasters and supply-chain innovators on a wide variety of topics ranging from global economic uncertainty and price volatility to increased consumer social awareness and shopping habits, responsible sourcing and traceability solutions.

Engaging speakers increased the audience's understanding of the complexities and flow of raw material production, supply chain dynamics and consumer marketing. Eighty-two percent of participants said that the COTTON USA Brand and Retailer Leadership Summit provided "a better understanding of the U.S. and global cotton markets" and the "complexity of the cotton value chain" and that attending the conference clearly will benefit their business.

The conference followed two former European Brand and Retailer conferences in 2009 and 2011 and represented the start of a global brand and retailer event to be held at different locations in the future, a new area for the COTTON USA program.

(PCG EDITOR'S NOTE: Dahlen Hancock of Ropesville participated as a presenter at this event.)

 

Online Price Basis Tool Available

From AgriLife Extension

Wednesday, April 9, 2014      By Blair Fannin, AgriLife TODAY

It's not as flashy as watching contract futures prices trade from red to green on the weekday exchange, but knowing the price basis for a commodity is an important aspect of marketing for agricultural producers, according to experts with the Texas A&M AgriLife Extension Service.

To help producers get a firm handle on price basis in a particular region of Texas, AgriLife Extension has an online tool available at http://basis.tamu.edu that lists the different price basis for corn, cotton, sorghum, soybeans and wheat.

"Price basis is the difference between a cash price and the futures price of a particular commodity on a given futures exchange," said Dr. Mark Welch, AgriLife Extension grains economist in College Station, who along with Emmy Williams, AgriLife Extension program specialist, College Station, provide weekly commodity basis prices in different districts throughout Texas.

"Producers need to be aware of basis," Welch said. "The futures price that you might be seeing may or may not necessarily reflect the actual local price you will receive. While the futures price might be up, the local basis price might be weak."

Welch said price basis is part of the curriculum offered during the annual Master Marketer program, for which the 2015 program is set to be held in January in Amarillo.

"Basis is the pliers of your marketing toolbox," Welch said. "It doesn't tell you everything, but basis conveys important information about fundamental supply and demand. You can't do without it. You have to have it."

For more information about the Master Marketer program, visit http://agecoext.tamu.edu/programs/marketing-programs/master-marketer-program/.