Plains Cotton Growers Inc. held its 66th annual meeting at the Overton Hotel and Conference Center on March 28, 2023.

While adversity has had the cotton industry in a chokehold over the past 15 months, the industry’s people continue to prove their grit and resiliency. 

As PCG President Martin Stoerner, producer in Floyd County, mentioned in his speech, “We pivot as farmers, pardon the pun. When something doesn’t work or if something happens outside our control, we pivot and keep going.”

Close to 300 people comprised of producers, extension agents, national cotton organizations, industry representatives and Congressional staff members gathered to hear stories and data from Tyne Morgan, Mark Messura and John Kriesel. 

“West Texas is special,” Tyne began in her agriculture industry outlook. “And not just because my husband is from Plainview.” 

Morgan, host of the U.S. Farm Report, covered commodity planting intentions, weather, markets, policy and more, as she summed up the state of the ag industry on a national and regional scale. However, she ended on a surprising note. 

“That notion we have that farmers aren’t appreciated is not true. While attending a John Deere trade show event, I noticed that the farmers were treated as celebrities. Everyone wanted to talk to them and get their insight. It was incredible.” 

And in terms of all-electric tractors? Morgan visited with John Deere Chief Technology Officer Jahmy Hindman while at this event who stated, “I talked about the 8R tractors. When I ran the numbers on it, if you power that with a lithium-ion battery today, it’s twice the volume, twice the weight, twice the mass, and four times the cost. That just doesn’t pencil.”

Mark Messura, senior vice president of the Global Marketing Supply Division of Cotton Incorporated, discussed the efforts to market cotton worldwide. “Cotton is the natural fiber, but not a natural choice when it comes to purchasing decisions,” he added. He emphasized the need to shift consumer perception when it comes to cotton as it is the most sustainable choice in the marketplace today. 

John Kriesel a retired Army staff sergeant, who fought in Kosovo and Iraq brought us a powerful message on the choices we make when faced with adversity. Kriesel lost both of his legs and two of his closest friends when his Humvee triggered an improvised explosive device (IED). 

“I know that you guys have faced many challenges this past year with the drought and face a lot of uncertainty in this coming crop year,” he said. “But you can still make a choice to have a positive attitude. I tell my story and I look out among you and see a lot of serious faces. Don’t pity me. I am so much happier with my life now after the IED incident than I was before — because I got a second chance at life. I appreciate you and what you do for our nation. Make the choice to see the bright side as you continue to do what you do.”

The farm partnership panel featuring Mark and Bryce Howard from Dallam County and Travis and Landon Mires from Lynn County focused on several issues and ended with a discussion of the future. 

“People are the most critical component of the operation to me,” said Bryce Howard. “They are also the biggest issue I see in the future. I’m focused on fostering a healthy culture for the people in our organization.” 

He’s not alone in that. The people are unmatched in every facet of the cotton industry. The fellowship and gathering of likeminded men and women was good for the soul as we prepare for crop year 2023.

And while we focused on weed control, sustainability, markets and hedging, farm bill policy, future concerns, etc., we also visited, laughed, and caught up with friends we hadn’t seen in a while.

The day we had together is best summed up by Steve Olson, producer in Hale County, who stated during the farm practices panel at the end of the day, “There is nothing better than this way of life we lead.” 

Thank you to all who came and celebrated the Texas High Plains cotton industry with us and to our sponsors who made the entire event possible. 

The El Nino weather pattern could boost yields in the second half of the year for U.S. cotton farmers, who were forced to abandon a big chunk of their cropland in 2022 after one of the worst droughts in years.

While El Nino typically brings dry weather to Asia, with impacts already being felt in Australia, Indonesia and India, it is known for wet weather in parts of North and South America.

The National Weather Service has forecast a more than 50% chance of El Nino forming during the northern summer of 2023.

“If we move into an El Nino pattern, we would see more rainfall in the U.S. and this would mean higher production, higher yields and less abandonment this year,” said Bailey Thomen, cotton risk management associate at StoneX Group.

Last year, more than three-quarters of Texas, which accounts for about 40% of U.S. cotton output, suffered from one of the worst droughts in years.

As a result, U.S. farmers were forced to abandon a record amount of their land, with the resultant supply shortfall driving prices to an 11-year peak in May.

“Last year, Texas had almost 70% abandonment due to drought,” the Texas Farm Bureau said.

However, too much rainfall may prove to be a spoilsport, leading to yield losses and quality downgrades.

“The most crucial part will be when the rains arrive. It will be great if they arrive by April-May,” Kansas-based commodity analyst Sid Love said.

Expectations of higher U.S. cotton output come at a time of weakening global demand for the fiber.

Demand concerns have prompted about 6% decline in U.S. cotton futures CTc1, CTc2 this year, and prices hit a 20-week low this week amid the ongoing banking sector crisis. COT/N

The USDA lowered its 2022/23 world cotton consumption estimates to 110.11 million bales in March, from 110.66 million bales forecast a month ago.

The market will be highly dependent on what happens with the global economy, said Matthew Looney, data scientist at International Cotton Advisory Committee, predicting consumption would remain low into the 2023/24 season.

“China’s recovery is a positive sign while the ongoing banking crisis poses economic risks which could weigh on demand,” said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.

U.S. Cotton Production Affected by Drought https://tmsnrt.rs/3JEqMcW

(Reporting by Ashitha Shivaprasad and Rahul Paswan in Bengaluru; Editing by Naveen Thukral)

This report from the USDA National Agricultural Statistics Service contains the results from the March Agricultural Survey which was conducted during the first two weeks of March 2023. The estimates provided in this report are intended to reflect grower intentions as of the survey period. New acreage estimates will be made based on surveys conducted in June when crop acreages have been established or planting intentions are firm.

Texas Upland cotton is expected to total 6.20 million acres, down 21 percent from last year. Planting of Pima cotton is expected to total 35 thousand acres, 6 percent above 2022. Growers intend to plant 2.05 million acres of corn, down 5 percent from last year. Producers intend to plant 1.45 million acres of sorghum this year, unchanged from last year.

Conservation Reserve Program Sign-up Dates

General sign up for the Conservation Reserve Program (CRP) began February 27 and ends April 7.

U.S. Cotton Trust Protocol 

March 31, 2023 (today!), is the deadline for U.S. cotton producers to enroll their 2023 crop in the U.S. Cotton Trust Protocol.

PCG Annual Meeting Feedback Survey

We value your feedback! Please let us know your thoughts on our 66th annual meeting by taking the survey.

Five Cotton Questions for the Next Farm Bill

Cotton Acres Could Crumble This Year

“In 2011 when the drought was so bad, the gin I am with now produced 48,000 bales. In 2022, we ginned 16,000.” – Todd Straley, Quarterway Cotton Growers

As referenced in previous issues of this newsletter, the 2022-crop is one for the record books — and not one that will soon be forgotten.

“Cotton production has been decimated by drought and extreme heat this year, costing Texas High Plains farmers and other agricultural industries at least $2 billion, according to one estimate,” Jayme Lozano wrote for the Texas Tribune in August of last year. 

Producers in the High Plains region abandoned more than 72% of planted acres due to the persistent drought and utter lack of subsoil moisture. While that’s not something anyone wants to go through, the weather is one of those facets outside a grower’s control. Thankfully, risk management tools through the Farm Bill, in addition to recently administered disaster assistance through “ad hoc” programming, have kept producers afloat especially in a year like 2022 where Mother Nature simply didn’t want to cooperate during the growing season. 

Unfortunately, other segments of the cotton industry don’t have the same risk management tools in place to weather the kind of loss that was experienced in the 2022 cropping season.

According to an August 2022 study from the Texas Tech University International Center for Agricultural Competitiveness, and source of the estimate given above, cotton gins in the PCG service region were projected to lose more than $230 million in working capital. 

In an effort to relieve some of the financial strain and distress of 2022 on the cotton industry, more specifically cotton infrastructure, Plains Cotton Growers made an initial attempt to secure federal disaster assistance for cotton infrastructure in the FY2022-2023 spending package. 

“In a year like 2022, when cotton production volume is extraordinarily low, it negatively impacts every segment of the cotton industry,” said Kody Bessent PCG CEO. “In order to maintain our supply chain resiliency across all cotton segments, we’d like to see our infrastructure colleagues provided with some funding assistance to keep their doors open in 2023, assuming they suffered a loss in 2022.” 

Unfortunately, the federal attempt was thwarted last minute, so PCG pivoted with our best foot forward and brought it to the state Capitol’s attention at the beginning of the 88th Texas Legislature.

The severity of the drought of 2022 on the Texas cotton industry —  specifically cotton infrastructure — due to a lack of production or throughput, has had and will have a long-term effect on not only producers but infrastructure as a whole. 

According to recent analysis by the American Farm Bureau, Texas suffered the most significant weather-related damage to crops of all U.S. states with over $6.4 billion in incurred losses. These losses were primarily made up of $2.9 billion in damages to cotton in 2022 mainly attributed to widespread exceptional drought conditions. 

Furthermore, according to USDA 2022 crop acreage certification data (578 data), Texas planted 7,722,964 acres of cotton in 2022, and failed or did not take to harvest 3,775,591 of those acres — creating an abandonment rate of 49.7%. Compare that to the High Plains region (where on average 60% of all cotton is grown in Texas) experiencing a 72.3% acreage abandonment rate in 2022 — surpassing 2011 failed acreage, the former benchmark for historic drought. 

A budget rider is currently being advocated for in the Texas Senate and House that would establish a one-time block grant program for cotton infrastructure to help ease some of the strain from financial losses credited to the 2022 crop year. 

Assuming this initiative comes to fruition, an entity in the cotton infrastructure segment — located in a county identified by the U.S. Drought Monitor as having a D2 (Extreme Drought) for eight consecutive weeks or D3 (Exceptional Drought) during calendar year 2022 — that experienced a 30% loss or greater in revenue from 2021 to 2022, could receive up to $500,000 in agriculture disaster relief to put toward fixed costs. 

We all need each other in this industry and the 2022-crop year definitely highlights that. PCG will continue to strive to make headway through Congress and our state Legislature to support cotton producers as well as our infrastructure segments during these challenging times. If you have any questions or would like to know how you can support this effort, please call the office: 806-792-4904.

The Plains Cotton Improvement Committee (PCIP) met Thursday, March 23, 2023, to discuss research results in 2022 and plans for 2023. Researchers presented on pest management, plant diseases, variety trials, and more, as they discussed plans for research in the future. 

The committee heard the following presentations:

• Dr. Megha Parajulee, Texas AgriLife Research – “Insect Pest Management in Texas High Plains Cotton.”
  • “I’m excited about this program’s commitment to the research,” said Megha Parajulee, Ph.D. “Every year, more people attend this meeting and it’s great to see everyone eager to participate in this work.” 
• Dr. Jane Dever, Texas AgriLife Extension – “High Plains Replicated Agronomic Cotton Evaluation (RACE) Trials.”
  • Dever presented the Southern High Plains RACE Trials results for the High Plains cotton specialist position, which is currently in the process of being filled following the recent departure of Dr. Murilo Maeda.
• Dr. Jourdan Bell, Texas AgriLife Extension – “Northern High Plains Replicated Agronomic Cotton Evaluation (RACE) Trials.”
  • As extension agronomist Jourdan Bell, Ph.D., discussed research in the northern Panhandle, PCIP Chair Barry Evans stated, “The area north of Interstate 40 has become very important. I’m not sure people realize how much cotton is up there. There is more cotton in that region than in the entire state of Tennessee.” 
• Dr. John Wanjura, U.S. Department of Agriculture, Agriculture Research Service – “Enhancement of Post-Harvest Research on High Plains Cotton Varieties.”
• Dr. Brendan Kelly, Texas Tech University Fiber and Biopolymer Research Institute – “Textile Performance Evaluation of Selected High Plains Cotton Varieties.”
• Dr. Jane Dever and Dr. Carol Kelly, Texas Agriculture Extension Service – “Development of Improved Cotton Germplasm for the High Plains Production Area of Texas.”
• Dr. Terry Wheeler, Texas AgriLife Research – “A Field Screening Program for Resistance to Bacterial Blight.”
• Dr. Terry Wheeler, Texas AgriLife Research – “Reassessing Cotton Variety Resistance to Fusarium Wilt Disease.”
  • Dr. Wheeler presented this research for the position in process of being filled following the recent departure of Dr. Cecilia Monclova Santana.

For more information, visit the Texas A&M AgriLife Research and Extension Center – Lubbock website.

Tyne Morgan, host of the U.S. Farm report will be presenting an agriculture industry outlook at the Plains Cotton Growers Inc. 66th annual meeting.

Morgan is doing what she calls her “dream job.” She’s a Missouri girl who has generations of agriculture rooted in her blood. Through public speaking and various contest teams, she actually plunged into broadcast at the young age of 16, working for the local radio station KMZU in Carrollton, Missouri.

Tyne attended the University of Missouri-Columbia where she majored in Agricultural Journalism, with an emphasis in broadcast, graduating in 2008.

After spending numerous hours on the road as AgDay and U.S. Farm Report National Reporter, in 2014, Tyne was named the first female Host of U.S. Farm Report. She’s only the fourth host of the show, following Orion Samuelson, Max Armstrong and John Phipps. Today, Tyne continues to take a deep dive into the news and issues farmers are facing today, while also sharing stories from across rural America. She’s an award-winning agricultural journalist, receiving NAFB’s prestigious Doan Award twice, most recently in 2022.

More important than any title she holds today, is her title of “Mom.”  Tyne and her husband James (from Plainview, Texas) are raising their two daughters in Orrick, Missouri, where they’re reminded daily the power and grit of a rural community as they volunteer with several organizations and work to give back.

“I admire so much about farmers and ranchers in the Texas High Plans, but what I admire most is the grit and tenacity they show each and every year,” Morgan said. “This past year that was on full display, and it’s an honor to join PCG for the annual meeting. We’ll dig into the news and issues that matter most to cotton farmers in the area, but I’ll also share stories from across the country that showcase the best of agriculture and rural America.”

The annual meeting is March 28, at the Overton Hotel and Conference Center in Lubbock, Texas. Registration for this free event and a buffet breakfast begin at 7:30 a.m. The program starts at 9 a.m. See you next week in Lubbock!

Conservation Reserve Program Sign-up Dates

General sign up for the Conservation Reserve Program (CRP) began February 27 and ends April 7.

U.S. Cotton Trust Protocol 

March 31, 2023, is the deadline for U.S. cotton producers to enroll their 2023 crop in the U.S. Cotton Trust Protocol.

PCG Annual Meeting

PCG’s 66th annual meeting is next week, March 28 at the Overton Hotel and Conference Center. Register online today! 

If Dr. Norman Vincent Peale was writing his incredibly popular book, “The Power of Positive Thinking,” today he would need to add a separate chapter on John Kriesel.

In 2006 Kriesel was nearly blown to shreds by a 200-pound roadside bomb in the parched sands of Iraq, but battlefield angels in army uniforms kept him breathing long enough to reach a field hospital. He died three times and was shocked back to life. Somehow he survived through four hospitals, 35 surgeries and months of recovery. He lost both legs and suffered numerous other major injuries, but it was the loss of two close friends that hurt the most.

The guy who wasn’t supposed to survive and was told he probably would be in a wheelchair the rest of his life walked out of Walter Reed Army Medical Center after nine months. Working with author Jim Kosmo, Kriesel reveals his motivational story in “STILL STANDING: The Story of SSG John Kriesel,” winner of eight national book awards.

Four years after his near-death experience in Iraq Kriesel became a civilian marketing employee with the Minnesota Army National Guard and in 2012 was named Director of Veterans Services for Anoka County. He also is a part time host on KFAN Sports Radio and former member of the Minnesota House of Representatives. He was elected to the House in 2010 after a vigorous campaign where he was told he could not win in his district. He personally visited several thousand homes in all weather conditions and literally wore out the socket in one of his prosthetic legs. He won.

After tours of duty in Kosovo and Iraq and a lengthy medical recovery Kriesel’s family wanted to spend more time with him and he chose not to run for re-election in 2012.

As a legislator he was anything but a quiet freshman challenging even his own party and frequently speaking his mind. “Kriesel’s honesty is a breath of fresh air at the Capitol,” declared the Minneapolis Star-Tribune. In addition to serving veterans in the Twin Cities and being a frequent voice on KFAN’s Power Trip Morning Show, he continues to share his upbeat, motivational message with businesses and organizations throughout the United States. 

Using humorous storytelling, Kriesel addresses the choices we can make when facing adversity. We are excited to have him as the keynote speaker for this year’s annual meeting. 

The 66th annual meeting of Plains Cotton Growers is March 28, 2023, at the Overton Hotel and Conference Center. 

Walk-in registration and a buffet breakfast will begin at 7:30 a.m. followed by the annual meeting program at 9 a.m. Afternoon workshops on cotton marketing and hedging, weed control, sustainability and the upcoming Farm Bill will take place from 1 p.m. to 5 p.m. For questions or more information, you may call the office at 806-792-4904 or visit our website: plainscotton.org. 

House Ag Committee Chair Glenn “GT” Thompson, (R-Pa.) hosted a farm bill listening session in Waco, Texas, Wednesday, March 15.

Shawn Holladay, chair of the National Cotton Council and past president of Plains Cotton Growers Inc., addresses the House Ag Committee at the Farm Bill Listening Session in Waco, Texas, March 15, 2023. Photo credit: Texas Farm Bureau.

He, along with bipartisan Members of the committee — Rep. Pete Sessions (R-Texas), Rep. Austin Scott, (R-Ga.), Rep. Kat Cammack (R-Fla.), Rep. Ronny Jackson (R-Texas), Rep. Tracey Mann (R-Kan.), and Rep. Jasmine Crockett (R-Texas) — listened to farmers, ranchers, producers, agribusiness owners, etc., as they provided feedback on the 2018 Farm Bill and highlighted issues the 2023 Farm Bill should address.

Shawn Holladay, chair of the National Cotton Council and past president of Plains Cotton Growers was one of the attendees who gave comments.

“The 2018 Farm Bill has served the industry well,” he stated to the committee. “However, the significant increase in input costs and disruptions in the global cotton market is undermining the effectiveness of the cotton safety net. Since the finalization of the 2018 Farm Bill, a majority of producer assistance has come through ad hoc funding from Congress. While this has been valuable due to untimely disasters, trade disputes and demand disruptions due to the COVID-19 pandemic, the 2023 Farm Bill should shore up the grower safety net and risk management tools…”

Conservation Reserve Program Sign-up Dates

General sign up for the Conservation Reserve Program (CRP) will begin February 27 and end April 7.

U.S. Cotton Trust Protocol 

March 31, 2023, is the deadline for U.S. cotton producers to enroll their 2023 crop in the U.S. Cotton Trust Protocol.

PCG Annual Meeting

PCG’s 66th annual meeting is on March 28 at the Overton Hotel and Conference Center. Register online today! 

Plains Cotton Growers Inc. is among 400 farm and industry groups that signed onto a letter shared with congressional leadership on agriculture’s budgetary needs in the 2023 Farm Bill. That letter, sent to the chairmen and ranking members of both the House and Senate Budget Committees, is a strong example of “united, we stand,” a phrase popular amongst the country’s founding fathers. 

Signees are hopeful modern leaders in the nation’s capital understand the value of agriculture and will take their needs into consideration when developing the fiscal year 2024 budget. 

“We write to express our strong support for providing (…) sufficient budgetary resources to write a new bipartisan, multi-year, comprehensive, and meaningful piece of legislation,” the groups convey in the letter, continuing, “Just as there are many pressures on the federal budget, there are many pressures on U.S. farmers and others throughout the agricultural supply chain who provide food, feed, fuel, fiber, and other products to consumers across the United States and abroad.” 

Cotton Prices Remain Neutral Despite New Information

New Role at Cotton Incorporated in Anticipation of CEO Succession

The Texas cotton industry convened at the state Capitol for Cotton Day on March 7, 2023, to educate Senate and House members and staff on the importance of Texas’ No. 1 cash commodity crop.

Plains Cotton Growers representatives who attended the proceedings were PCG Chairman Brent Nelson, PCG President Martin Stoerner, PCG Board Member Todd Straley and PCG CEO Kody Bessent.  Many Texas cotton industry segments, groups and councils were in attendance, handing out cotton towels to members and staffers with information pertaining to the industry.

In addition, the PCG team met with members to emphasize the need for cotton infrastructure assistance for the 2022 crop year; cotton, wool and mohair research funding; and maintaining funding for the Boll Weevil Eradication Program.

“Back in 2011 when we thought the drought was so bad, my gin produced 47,000 bales,” Todd Straley told Rep. John Smithee (R-District 86). “This last year, we ginned 16,000.”

Sen. Charles Perry (R-District 28) introduced Senate Resolution 268 on the Senate floor, recognizing the great cotton industry in the state of Texas.

“Agriculture is the spirit of West Texas and the spirit of this nation…we want to recognize this industry for what it does for Texas and recognize this day as Cotton Day.”

Rep. Briscoe Cain (R-District 128) is the Texas House Agriculture Committee Chair for the 88^th Legislature. The legislative session started January 10th and runs through May 29th.

Cain earned his doctorate of jurisprudence from South Texas College of Law and owns and operates the Law Office of Briscoe Cain, PLLC.

While presenting at the Texas Agriculture Council meeting in Austin, Texas, on March 8th, Cain mentioned he was on his second read-through of the Texas Agriculture Code and that he would, “do everything I can to get the government off of your backs so you can thrive.”

While out of session, Cain resides in Deer Park, Texas, with his wife, Bergundi and their five children.

“We appreciate Chairman Cain’s support of our industry, and we look forward to working with him this legislative session,” said Kody Bessent, PCG CEO.

Rehman Naseem, CEO and owner of Fazal Cloth Mills, Ltd. In Multan, Pakistan, presented to the Plains Cotton Advisory Group on March 10, 2023.

Based on his presentation, the challenges facing the textile mill industry include the following:

Supply Disruptions Caused by the COVID-19 Pandemic

Not only was the supply chain broken as complications arose from the global pandemic, but demand skyrocketed. “Certain countries weren’t able to supply the demand,” he said. “Plus shipping of product from destination to the source was disrupted. Retailers were finding it hard to predict when a particular order would arrive so they were ordering more quantity than required due to the level of uncertainty in receiving the goods.” Naseem added that Pakistan was one of the countries that opened earlier than others so its production facilities were able to cash in on this demand. “Cotton consumption in Pakistan shot up to 16 million bales February 1, 2021.”

Inflation

Naseem stated the investment in the textile chain in Pakistan increased in 2021, as everyone expected the demand to remain constant or even increase going forward. Across the industry, from spinning, weaving, production, etc., there was investment in all segments. Unfortunately, inflation caused a different situation in 2022. “The central banks in most countries started raising interest rates and retailers were fearful of a recession and lack of demand as a result, so the focus transitioned to cutting down on inventory.” The second half of 2022, Naseem saw a reduction of capacity by 50% in his mill. China’s retail demand remained very low with their strict COVID policies; though, recently they have started to enter the marketplace. Naseem said his mill is now operating at 70% capacity — Pakistan needs to consume 16 million bales to be at full capacity. Right now, they are expected to consume 12 million bales this year.

Uyghur Forced Labor Prevention Act

Naseem stated this act enforced by the U.S. — along with other countries who imposed their own restrictions on importing goods from cotton grown in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China — has had a negative effect on the textile mill industry as a whole. The restriction policies have put pressure on Chinese cotton prices. For the first time in many years, we are seeing the Chinese cotton price premium for new York futures reduced sharply, trading almost even with New York. Today, it’s trading at 14 to 15 cents above New York, when traditionally — over the last four to five years — China’s cotton price premium has been 25 cents over New York.

“This has a negative impact on our industry because Chinese mills are able to procure cotton at cheaper prices and are exporting yarn at a very cheap price,” Naseem added. “While the U.S. and some parts of Europe are banning Xinjiang cotton, other destinations like South America and Southeast Asia are not. So, a lot of demand has shifted to these cheaper yarns coming out of China. It’s hard for us to compete at this price level, and, once yarn is available at a certain price, the market adjusts to that price, so it’s difficult to ask for a premium.”

Naseem went on to say that he believes this price pressure is one of the main reasons cotton prices remain under pressure. “I expect this will be a critical challenge we will face for another six months until the issue is resolved somehow.”

Naseem’s annual mill use is roughly 450,000 bales per year. He said that Pakistan mills are well covered for the second quarter of the year, but they will need to buy additional cotton in the next six months to get back to 100% capacity. If this happens, he says Pakistan mills will need around three million bales.

The new cotton crop in Pakistan will arrive in August. Naseem acknowledged the tough crop year Pakistan had in 2022 with severe flooding and weather events — ending up with 5 million bales rather than the expected 10 million-plus. “Even during normal production years, Pakistan still imports a net of five to seven million bales per year,” he added. “Almost 20% of all cotton imported is from the U.S.”

ARC/PLC Decisions

ARC/PLC decisions must be reported to your local FSA office by March 15.

Conservation Reserve Program Sign-up Dates

General sign up for the Conservation Reserve Program (CRP) will begin February 27 and end April 7.

U.S. Cotton Trust Protocol 

March 31, 2023, is the deadline for U.S. cotton producers to enroll their 2023 crop in the U.S. Cotton Trust Protocol.

PCG Annual Meeting

PCG’s 66th annual meeting is on March 28 at the Overton Hotel and Conference Center. Register online today! 

The House Committee on Agriculture convened a business meeting March 9, 2023, to consider its budget views and estimates letter for the 2024 fiscal year. After the letter was reported favorably out of committee, Chairman Glenn “GT” Thompson (R-Pa.) issued the following statement:

“The Committee’s budget views and estimates letter outlines a clear, bipartisan blueprint to invest in the hardworking men and women of American agriculture — the folks who work 365 days a year to feed and fuel our nation. While additional funds are necessary, there is no piece of legislation that provides a better return on investment than the Farm Bill. In the wake of record inflation, a global pandemic, and geopolitical turmoil, American farmers, ranchers, foresters, producers and consumers are suffering. The best way to support them is to pass an effective, bipartisan and timely Farm Bill, and the letter considered today provides a sensible path forward.”

Letter Highlights

• Return on Investment — “…in return for this modest investment…more than 43 million jobs, $2.3 trillion in wages, $718 billion in tax revenue, $183 billion in exports, and $7.4 trillion in economic activity.”
• Farm Debt — “[in 2021]…U.S. farm sector debt climbed above the previous record set in 1980 and has since continued to climb, underscoring the need for a strong farm bill.”
• Protecting the Farm Safety Net — “…Over the last 20 years, the farm safety net has repeatedly been looked to for deficit reduction…Congress has returned to the cycle of providing unbudgeted ad hoc assistance for both weather and market related disasters, totaling $93.3 billion over six years…more than 70% of federal funding for agriculture…Despite this infusion of assistance, the farm financial picture is beginning to erode due to repeated production losses and skyrocketing inflation.”

The letter, which outlines the financial challenges and needs of American agriculture, can be found here.

USDA WASDE Report – March 2023

Healthier Frying … with Cottonseed Oil

Things to Know About Inflation and the Consumer

The first House Agriculture Committee hearing of the 118th Congress took place Tuesday, February 28, focusing on uncertainty, inflation and regulations that present challenges to the U.S. agriculture industry. 

Rep. GT Thompson (R-Pa.), committee chair, opened the hearing stating legislators cannot write an impactful farm bill addressing the needs of those who grow, process and consume the food, fuel and fiber of this country without a comprehensive understanding of the industry’s challenges. 

“Our nation’s farmers, ranchers and foresters are exceptional, having increased food and fiber production nearly threefold since the 1940s,” added Thompson. “They’ve done so with no relative increase in inputs, serving as shining stars of sustainability and conservation practices. However, the uncertainty caused by a global pandemic, geopolitical unrest and government intrusion have led to a modest production decline in recent years.”

Thompson outlined his goal for the committee as providing necessary tools for farmers and ranchers to ease the barriers to production to prevent this decline from escalating. He identified the barriers as the following:

• Labor
• Fuel (average cost of diesel fuel per gallon increased 95% in 2021)
• Fertilizer (nitrogen, phosphorous and potassium increased 125% in 2021 and an additional 30% in the first five months of 2022 alone)
• Inflation (natural gas price increased 53% in 2021)
• Interest Rates

The one positive, Thompson added, was Americans’ heightened awareness of the importance of a reliable domestic food supply and the producers who provide it. “It’s the only silver lining.” 

He closed his opening statement by challenging committee members to “retire our dress shoes and put on our work boots. We have a lot of work to do.” 

The Challenges:
The first witness called for the first hearing of the 118th Congress was Zippy Duvall, president of the American Farm Bureau Federation. 

Duvall stressed that strong farm policy is part of a national security strategy. “The country that cannot feed itself is not secure.” 

The challenges listed by Duvall during his statement include the following:

• Losses experienced in the trade war with China
• Pandemic lockdowns
• Supply chain disruptions
• Record-high supply costs
• Unprecedented volatility that farmers and ranchers have faced in recent years.
• Short- and long-term interest rates are rising double and triple what they were a year ago.

Duvall went on to reference the U.S. Department of Agriculture’s forecast report of farm sector income. According to the report, net farm income for 2023 is projected to decrease by 15.9% — adjusted for inflation makes it 18%. However, the same report estimates that farm and ranch production expenses will increase by $18 billion, following a record increase of $70 billion in 2022. 

“Some of us remember the high interest rates caused by inflation combined with the federal response leading to a farm debt crisis in the 1980s,” he added. Duvall emphasized the need to make sure history didn’t repeat itself. 

While there are many challenges, there are also opportunities, Duvall noted, referencing our incredible advances in sustainability. However, government regulation is stifling the opportunity with the new Waters of the U.S. ruling, Endangered Species Act, access to important crop protection tools, immigration and labor regulations, etc. Not to mention the U.S. Securities and Exchange Commission’s desire to impose new climate regulations, which Duvall says “are meant for Wall Street.” 

The hearing was more than five hours long, as six witnesses presented and every committee member was given an opportunity to ask them questions. “We appreciate everyone’s endurance, and, quite frankly, the ag industry and meeting the needs of every American family is well worth our endurance,” Thompson said in his closing remarks. 

Easing burdensome regulations off the backs of farmers will only allow them to prosper in their innovative efforts to do more with less. As Duvall stated, they already have uncertainty in the weather. Strong farm policy to further ease the measures outside of a farmer’s control allows everyone to do their part in securing the future of the nation. 

The full hearing can be viewed here.

Chairman of the House Committee on Agriculture, Glenn “GT” Thompson (R-Pa.), will host a Farm Bill listening session in Waco, Texas, on March 15th at 2 p.m.

Mr. Thompson will be joined by Congressman Pete Sessions (TX-17) , Congressman Ronny Jackson (TX-13) and Congresswoman Jasmine Crockett (TX-30), along with bipartisan Members of the House Committee on Agriculture. 

The event will bring together farmers, ranchers, producers, agribusiness owners and more to solicit public feedback — an integral part of the Farm Bill reauthorization process. All members of the Committee have been invited to participate as well as the Texas Congressional delegation. 

 Click here to view the livestream.

ARC/PLC Decisions

ARC/PLC decisions must be dictated to your local FSA office by March 15.

Conservation Reserve Program Sign-up Dates

General sign up for the Conservation Reserve Program (CRP) will begin February 27 and end April 7.

U.S. Cotton Trust Protocol 

March 31, 2023, is the deadline for U.S. cotton producers to enroll their 2023 crop in the U.S. Cotton Trust Protocol.

PCG Annual Meeting

PCG’s 66th annual meeting is on March 28 at the Overton Hotel and Conference Center. Register online today! 

Shawn Holladay Featured on Cotton Companion Podcast

Bangladesh Relaxes Rule on Fumigation of U.S. Cotton Imports

Jordy Rowland and his wife Maegan and their children: Aubrey (11), Ace (10), Harper (9) and Tagg (5).

Q: Did you grow up in agriculture?

A: I grew up in Hart, Texas, and my dad farmed cotton, corn and wheat in Castro County. Farming has always been a passion of mine, and I still remember setting irrigation tubes and moving gated pipe. That was back when we had more water in the area than we do now. My kids will never know anything about that.

North Gin in Dimmitt, Texas.

Q: Where did you go to school (high school and college)?

A: I went to high school at Nazareth Independent School District and was really into sports. Sports and farming were my interests. We were competitive in football, basketball, baseball, track, and golf and I was interested in playing football in college. I decided to walk on to the Texas Tech University (TTU) football team. I played on special teams and at nickel/dime positions and was on a full scholarship the last two and a half years I played. It was a great experience and provided me with some friends that I still have today. I was on the team in 2008 when we made a great run and was a part of the thrilling game when we beat University of Texas at home.

Q: What did you major in while playing football?

A: I started out in mechanical engineering — I’m a numbers guy. However, playing collegiate football was a full-time job in and of itself, so I decided to change my major to agricultural economics. It was nice to be back with ag people. My transcript does look a little funny, though — it’s not every day you have advanced calculus and differential equations as electives.

Q: What did you do after graduation?

A:  I worked for a commercial lending group in Amarillo, Texas, as an analyst working my way up to credit underwriter. I was there for roughly four years when a loan officer position opened at People’s Bank back in Nazareth. My wife and I jumped on the opportunity to move back home.

Q: How did you end up at North Gin?

A: About a year after we moved back, I received a phone call from Jim Bradford. He indicated he was looking for someone to come run the gin. I was familiar with cotton production and had a farming background, but I didn’t know anything about ginning. Jim knew that and worked to teach me everything. He has been an excellent mentor. It took a year or two before I fully saw the operations of a gin season and how everything functioned. Now I’m heading into my 10^th crop.

Q: What is working with Jim Bradford like?

Jordy and Jim examine cotton samples at the gin.

A: Jim makes it easy to come to work every day. He is laid back and always finds a way to find the joy in the day. I have learned so much about how to handle different situations – good or bad. He never loses his cool and always handles business professionally. He is very generous and always looks to help those in need. I don’t know if there are words to adequately capture the totality of Jim Bradford. He is a wonderful mentor and an even better friend.

Q: What was the most challenging part of beginning your career with North Gin?

A: Learning the ins and outs of the gin itself was the most challenging part. Even now, I wouldn’t call myself an expert. We have an amazing gin superintendent, Johnny Emerson. With Johnny, we can always count on the gin being ready to run when the season begins. He’s the best.

Q: What is the average number of bales ginned at North Gin?

A: I wouldn’t say there’s an average number as much as a range that we stay within. For the 2021 crop, we ginned 47,000 bales. The two years before that we did between 20,000 and 30,000. In 2018, we ginned 72,000. Anything below 25,000 is considered below normal for us and we ginned 18,150 bales for the 2022 season.

Q: What’s the biggest challenge for you in your daily operations?

A: Our biggest battle every year is getting acres planted. This area is predominantly ruled by the beef cattle and dairy industries, so there are a lot of mouths to feed. The better irrigated acres in this area have been sold to the dairies. Some dairies are planting a little cotton where their water has dropped off, but the majority of them are planting some sort of feed like sorghum silage or corn silage. And cotton producers plant some, too, where they have water because the prices are good. We need a good 10 to 15 cent rally in the futures prices for cotton or we may lose more acreage in this area this crop season.

Q: What is something you wish more people understood about agriculture?

A: We hear a lot about sustainability these days, and I just wish more people understood the true nature of a farmer. They want to farm the land for generations to come, so they use sustainability practices to ensure that future. Don’t come in here and tell farmers how to be sustainable — they already wrote the book.

Jordy Rowland: Family Man

Jordy met his wife, Maegan in Kindergarten. They began dating their junior year of high school and were married in the summer of 2009. They live in Nazareth and have four children: Aubree (11), Ace (10), Harper (9) and Tag (5).

The Rowlands are active members of the First Baptist Church in Dimmitt, and Jordy’s love of sports has been passed on to his children. Whether its flag football or little dribblers, Jordy is usually coaching one or more teams on his Saturdays. “And, sometimes, I find time to play golf,” he adds.

Rep. August Pfluger (R-Texas) has reintroduced The Listing Reform Act, legislation designed to modernize the Endangered Species Act. 

Plains Cotton Growers supports this legislation, along with Texas Farm Bureau and Permian Basin Petroleum Association.

“This bill would modify requirements concerning the review of petitions to add a species to the list of endangered or threatened species or to remove a species from the list,” said Kody Bessent, PCG CEO. “Arbitrarily reviewing a petition to list a species simply based on when a petition was received, as compared to a more thorough analysis based on sound science, has, in times past, impacted a producer’s ability to produce a crop based on cropping practices that are agronomically sound for a specific region. Therefore, we support modifications for a more thorough review of the listing process and look forward to working with Rep. Pfluger and others on this important issue.” 

ARC/PLC Decisions

ARC/PLC decisions must be dictated to your local FSA office by March 15.

Conservation Reserve Program Sign-up Dates

General sign up for the Conservation Reserve Program (CRP) will begin February 27 and end April 7.

PCG Annual Meeting

PCG’s 66th annual meeting is on March 28 at the Overton Hotel and Conference Center. Register online today! 

Williams Family Named 2023 High Cotton-Southwest Award Recipients

After Years of Disaster, Texas Farmers will Plant Far Less Cotton in 2023

The No-Till Texas organization hosted the Southwest Soil Health Symposium Feb. 14 and 15 in Lubbock, Texas.

“I ran over some stuff with a plow when I was 11 and my Uncle Eddie said, ‘Kris, the only person who hasn’t screwed something up is the one who hasn’t done it.’”

– Kris Verett
Crosby County

“Mindfulness is important when it comes to ecological situations. Sometimes what we deem insignificant can have a major impact later down the line.” 

-John Zak, Ph.D.
Texas Tech University

“We’re all about improving resiliency to survive West Texas.” 

-Barry Evans
Swisher County

The classing season is nearing the end for the 2022 crop season. While the majority of classing offices have completed classing samples for this crop year, Lubbock is still working with samples. 

Lubbock’s average daily number of cotton samples received this week is 492. The office is 99% complete in the classing of their season estimate of samples. Due to the lack of gins operating, this report contains seasonal data only. 

Lubbock Report

Yesterday, the Congressional Budget Office (CBO) released its February 2023 budget projections for a number of Federal programs, including farm-related programs and the Supplemental Nutrition Assistance Program (SNAP).  All eyes are on the farm bill, which expires on September 30, 2023, and this latest update gives us an initial glimpse of the budget baseline that will be available to the farm bill authors this year.

CBO typically updates their budget projections early in the year, and yesterday’s release follows that pattern.  Following the release of the President’s budget in February, CBO will often release a revised outlook in March.  If the President’s budget is delayed, the updated outlook from CBO can stretch into late Spring or early summer – for example, in 2021, the update was released in July.  Why does this matter?  It is generally the update following the release of the President’s budget that is the baseline against which the cost of legislative proposals is “scored” throughout the year.  In other words, while the current release will get a lot of attention, CBO may choose to update their projections again this spring; if they do, that baseline likely will be used for writing the farm bill.  CBO will also typically release – at least to policymakers – their baseline projections by farm bill title.

In the meantime, there is much to glean from the information made publicly available in yesterday’s release.  As we noted in a Southern Ag Today article last summer, if we look back to the April 2018 baseline (the scoring baseline for the 2018 Farm Bill), the spending projections for CCC Price Support and Related Activities, Conservation, SNAP, and Crop Insurance accounted for $865.9 billion (Table 1), or 99.85% of the $867.2 billion in projected total baseline outlays for the farm bill.  Applying the same methodology to CBO’s most recent February 2023 baseline update, those four categories are projected to spend approximately $1.45 trillion over the next 10 years (Table 1).  The significant increase is due to an 81.6% increase in projected spending on SNAP, with SNAP now projected to account for $1.2 trillion, or 83.3% of the total farm bill baseline.  By contrast, the income support provisions for agricultural producers that make up the largest component of Title 1 – the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs – are projected to spend $48.6 billion over the next 10 years, or just 3.4% of the total farm bill baseline. Following are a few initial observations from Table 1:

• While some may look to the $71.8 billion in CCC Price Support & Related Activities (a $7.5 billion increase) as additional resources with which to write the farm bill, it’s not that simple.  In January 2020, CBO began including $100 million per year in the baseline as an estimate of the amount they project the Secretary of Agriculture to spend using discretionary authority available under the CCC.  In May 2022, CBO increased that amount to $1 billion per year (or $10 billion over 10 years).  In other words, absent the amount that CBO includes in the baseline as a guess of what they expect the Secretary to spend using discretionary CCC authority, the baseline for CCC Price Support & Related Activities would be going down.

• These estimates would also likely be considerably lower if one were using USDA’s latest market projections which were also released yesterday.  For example, USDA projects cotton prices in the long run that are 16% higher than CBO.  If USDA’s projections were to materialize, ARC and PLC spending would be considerably less and the safety net would still be doing nothing to address the high cost of inputs.

• The increase in conservation spending is almost entirely due to the infusion provided in the Inflation Reduction Act (IRA) of 2022, although CBO has revised downward the amount they expect USDA to spend on these efforts (by roughly $1.5 billion).

• On crop insurance, the increase in projected spending is generally attributable to expanded product availability over the last 5 years along with projected increases in liability coverage due to higher market prices.

Table 1. Congressional Budget Office (CBO) 10-Year Outlays in Million$

Bottom line: the already relatively small 10-year baseline for writing Title 1 may ultimately be an overestimate, especially when comparing with USDA’s economic outlook.  Even now, it pales in comparison to the almost $88 billion in unbudgeted ad hoc assistance that was provided to agricultural producers over the past 5 years alone.  If Congress plans to move away from ad hoc assistance to a more sustainable risk management framework for producers, additional resources will be needed for the farm safety net.

Author: Bart L. Fischer

Research Assistant Professor and Co-Director Agricultural & Food Policy Center at Texas A&M University

Author: Joe Outlaw

Professor and Extension Economist

Co-Director Agricultural & Food Policy Center at Texas A&M University

Lubbock Cotton Quality Report

By Kara Bishop

Now that the 2022 cotton crop is off the stalk, producers shift focus to markets and decisions for next year.

Going into the 2022 planting season, cotton prices hit $1.49 on May 4, 2023. For most, looking at a range of 82 to 85 cents after harvest hurts.

“We finished ginning a few days before Christmas, and normally this far out from ginning, we would have most of the cotton sold,” said Jordy Rowland, manager of North Gin in Dimmitt, Texas. “I’m still sitting on quite a bit of cotton. Most of it is on call with the basis locked in, but it’s hard for my guys to pull the trigger on 85 cents when prices were much higher at the beginning of the season.”

He’s not the only one.

“We ginned 66,000 bales and 32,000 bales are contracted,” said Alexa Reed, office/marketing manager for Moore County Gin in Dumas, Texas. “Some producers are still waiting on a better price.”

Mike Canale, merchandising manager for PCCA, believes that there may be more cotton out there unpriced than expected given the size of the 2022 crop.

Trying to make a profit, combined with volatile markets, supply and demand dysfunction, and a year of unfortunate weather can be a tough game for anyone to play.

The Players

Making decisions on selling cotton involves more than just the producer.

Landowners

“Sometimes landowners can play a role in the process,” said Martin Stoerner, producer in Lockney, Texas, and PCG president. “We had one landlord that wanted us to sell early so we did. Not because they want the money — they just like to keep their income in the same calendar year for tax purposes.”

Lenders

Lenders can spur sales decisions, as well, which is why purchasing call options are popular.

“I just came back from the Carolinas and they are selling at 87 and 88 cents over there,” said Lou Barbera, cotton trader for VLM Commodities. “They were saying, ‘No, we’re not going to get what we wanted but the basis is still better than the last couple of years at this time.’ And they didn’t want to dip into an 8.5% operating loan — that was the main factor.”

Economy

According to the U.S. Department of Agriculture (USDA) Economic Research Service, food prices increased by 9.9% in 2022. The all-items Consumer Price Index decreased by 0.3% from November 2022 to December 2022 but was up 6.5% from December 2021.

Food prices were 10.4% higher from December 2021 to December 2022.

“Everybody has to eat,” said Quentin Shieldknight, producer in Spearman, Texas. “But you don’t have to switch out your wardrobe if your wallet dictates you can’t. If all you can afford is food, you’re not going to buy sheets, clothes or socks.”

Demand

Merchants have discussed in multiple Plains Cotton Advisory Group meetings this year that the market is looking for the demand — it just hasn’t been there.

This may be changing, though, based on the USDA Foreign Agricultural Service US. Export Sales Report released Jan. 26, 2023.

The report states 199,600 bales were sold with 28,500 cancellations netting 171,100 bales. “If we have roughly 150,000 bales sold or higher on a weekly report, we feel pretty good about where the demand is headed,” said Joshua Burris, southwest cotton manager for COFCO International.

For reference, 4,864,100 bales of Upland cotton have been sold this market year. Compare that to this week last market year, when 8,087,600 bales were sold. A 3.2-million-bale difference. China contributes 2 million bales to that difference, seeing as they’ve purchased 551,000 bales this marketing year and 2,545,600 last marketing year.

However, China and Turkey were the largest buyers this week. While that is encouraging, according to Barbera, it isn’t surprising.

“China buys around this time every single year,” he added. “They buy in the first two months of the year, and they buy again in May and of course as needed during the rest of the year.”

A chart from Lou Barbera indicating China’s cotton purchase schedule every year. Click on the image to download.

A true rise in demand will need a more consistent demand stream.

“The USDA has the most pessimistic view on demand and the most optimistic view of supply, which isn’t helping,” Barbera continued. “And we can’t forget the ‘perfect storm’ the textile mills have gone through. They were forced into a position starting in 2021 where they were told not to buy because the spreads were heavily inverted meaning prices were overinflated. That was at 88 cents by the way. Prices were then fixed around $1.40 and they were forced to buy, so now they’re holding out.”

At the same time, mills are starting to normalize. They’re willing to keep 20 to 25 day’s worth of supply whereas they normally keep 40 days. “Things are starting to normalize,” Barbera agreed. “They’re not at 30 days ago where we were in peak pessimism, and they’re not at 12 months ago, when we were at peak euphoria.”

The Rules

There are multiple options for selling cotton, which comes with multiple decisions.

Are producers going to choose to enter a seasonal pool at the beginning of the season that’s acreage based to eliminate weather-related production risks?

“Back in May, I was struggling with motivation to plant, because the prices were so great and the drought bad and expected to worsen,” Shieldknight said. “Weather can be one of the most frustrating parts of this whole deal.”

Are they going to commit to on-call agreements, purchase call options on the assumption the market will rally, or purchase put options assuming the market won’t?

“On-Call agreements have been popular this year with our producers,” Canale added. “If the market rallies it can increase your profit.  The producer can receive loan value up front and once invoiced the warehouse storage deduction stops as well.”

Are they going to hold cotton and do nothing, hoping loan interest rates and storage fees don’t eat into whatever profit comes from the price they agree to?

“Basically, you’re running on borrowed money with high interest and if you add storage fees on top of that, it’s hard to hold out for long,” said Bryan Baker, producer in Sudan, Texas. “And buyers know that, too, so they hold out. We’re all bluffing until someone folds.” 

The Teams

As prices and input costs currently stand, there are some producers who will largely minimize their cotton acres for this coming season.

“Up here we have more options,” Shieldknight added. “We’re going to increase our corn, milo and soybean acres to put us in a better position and decrease the risk. With loan interest rates double what they were, grains are just a better option for us.”

Baker said he grows black-eyed peas alongside cotton.

“They are similar to cotton in that they don’t need much water,” he added. “And prices for peas are better than cotton right now with less input cost. Prices for black-eyed peas are set at 65 cents per pound, so 1,000 pounds gives you $650 an acre. I’m still a cotton man though, don’t get me wrong.”

When to Play

The consensus from sources is that producers would let their unsold 2022 cotton go for 90 cents to $1.

“We would pull the trigger for $1,” Stoerner said.

“I did the math on what my operation needs to break even and it’s 85 cents,” Baker added. “I’d rather make a profit, so I’m hoping to see 90 cents before I have to make a decision.”

“Producers are holding on because the market sits at a break-even price,” said Guyle Roberson, manager of Texas Producers Cooperative Association. “They’re holding on and rolling the dice because they need a profit.  Normally you can sell cotton at 85 cents and be happy with that, but input costs this year change what used to be considered normal.”

“I believe if we saw 90 cents, most of our producers would sell,” said Reed and Jerrell Key, manager of Adobe Walls Gin in Spearman, Texas.

“There’s got to be a rally here somewhere,” Shieldknight added. “We’re going to break through 90 cents eventually. It’s been challenging because it gets up to 89 then falls back to 85 the next day. It’s fascinating to me that we’re not already at 90 cents after the disaster that Texas went through in 2022. We get to 90 and I think everyone will start selling like crazy.”

Baker also noted that the market could go back up once the USDA Risk Management Agency sets the 2023 projected insurance price at the end of this month.

Regardless of the strategy used when marketing and selling cotton, producers in the Texas High Plains play to win, even if they come up short.

Abilene Quality Report

Lamesa Quality Report

Lubbock Quality Report

USDA Launches Rural Data Gateway to Strengthen Partnerships and Expand Access to Resources for People in Rural America

Phase 2 of the Emergency Relief Program (ERP) has been talked about for months with the anticipation that the process would model that of Phase 1. However, the rule for Phase 2, published almost two weeks ago, is fundamentally different from Phase 1 in both formula and eligibility determination. 

A Comparison of Methodology

To understand the difference in implementation between the two phases of ERP, we’ll do a side-by-side comparison.

The Challenges with Phase 2

Gross Income
A producer’s actual production history (APH) is an adjusted average of 10 years’ yields, which is a more accurate measurement of expected gross income. Phase 2, however, is operating off a one-year base period using an individual’s taxable information. And, in some cases, this is not a true reflection of an individual’s crop production year. Obviously, expenses are not considered, and with input costs ever rising, it’s unfortunate that gross income is the litmus test here. 

Farm Service Agency
Phase 1 went relatively smoothly for FSA local offices. Producers received a pre-filled application from USDA and merely had to verify, sign and return to their local FSA office. Phase 2 requires local offices to input the data themselves, making it more labor intensive for offices that are already short staffed. Phase 1 was streamlined. Phase 2 is not.  

Incentive
If a producer were to jump through all the hoops and become eligible, the initial payment is a maximum of $2,000. If total calculated payments exceed the total funding available for Phase 2, the rule states that the ERP Factor may be adjusted and the final payment amounts will be prorated to stay within the amount of available funding. 

To further understand the application of Phase 2, consider the example Paul Neiffer provided to FarmJournal:

The Emergency Relief Program (ERP) Phase 2 Calculator is now available on the ERP website. This tool can help you determine eligibility for Phase 2 and can provide an estimated program payment calculation. 

The enrollment period for ERP Phase 2 closes June 2, 2023. 

Abilene Quality Report

Lamesa Quality Report

Lubbock Quality Report

The American Cotton Shippers Association will be hosting the International Cotton Institute at the University of Memphis from June 5-June 30, 2023.

The program is a four-week intense education on the cotton business with emphasis on functions of the trade, risk management, global logistics, and forward-facing global industry objectives.  The curriculum also gives a good foundation of US industry associations and contacts, their roles, and differences.  In addition to the content, this program creates a unique networking opportunity with the trade’s leadership and classmates that are growers, spinners, brand representatives, and policy influencers.

2023 Farm Bill Outlook

Tug-of-War Between Prices and Production