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June 14, 2024
 

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PAST ISSUES/ARCHIVES
 
Cotton's Week: July 19, 2024
Cotton's Week: July 19, 2024
Cotton's Week: July 12, 2024
Cotton's Week: June 28, 2024
Cotton's Week: June 21, 2024
 
 


 

Senate Republican Farm Bill Framework Released

Senate Agriculture, Nutrition, and Forestry Committee Ranking Member John Boozman (R-AR) released a framework outlining his vision for a new Farm Bill. 

Among other measures, the framework at https://bit.ly/4bXDssA calls for increasing reference prices for commodities by an average of 15 percent, boosting premium subsidies for the Supplemental Coverage Option to 80 percent, raising the USDA marketing loan rate, reforming the functioning of the marketing loan and doubling funding for Market Access Development/Foreign Market Development. 

While no legislative text has been released, the Boozman framework appears to largely align with the version of the Farm Bill sponsored by House Agriculture Committee Chairman GT Thompson (R-PA), which was reported out of the committee by a bipartisan vote last month. Senate Agriculture, Nutrition, and Forestry Chairwoman Debbie Stabenow (D-MI) released her own Farm Bill framework at https://bit.ly/4eoN1T5 last month.

The NCC issued a statement at https://bit.ly/3xffeuG commending Boozman and urging “all parties to work together to ensure a final Farm Bill is enacted in the coming months.”  

 

 

USDA Funding Process for FY25 Begins

The Republican-led House Appropriations Committee’s Agriculture, Rural Development, Food and Drug Administration Subcommittee approved a bill to fund the U.S. Department of Agriculture (USDA) and the Food & Drug Administration (FDA) in FY25. This legislation will now likely receive consideration from the full Appropriations Committee in the coming weeks.

The bill provides $25.9 billion in total funding for USDA and FDA activities – a 1.35% decrease from FY24 spending. Among many other policy reforms, the bill establishes a pilot program to test potential new Supplemental Nutrition Assistance Program restrictions and directs USDA to more fully track U.S. agricultural land purchases by companies originating in China, Russia, North Korea and Iran.  
 
Cotton pest eradication efforts are slated to receive $15.5 million in FY25. Additionally, the bill is expected to direct the National Agriculture Statistical Services to reinstate the Cotton Objective Yield Survey and all County Estimates for Crops and Livestock.

The NCC will monitor funding allocations for other cotton industry priorities as more detailed information is released by the Appropriations Committee in the coming weeks.

 

USDA Reminds Producers to File Crop Acreage Reports

Agricultural producers should make an appointment with their local Farm Service Agency (FSA) office to complete crop acreage reports before the applicable deadline after planting is complete. July 15 is a major deadline for most crops, but acreage reporting deadlines vary by county and by crop.

An acreage report documents crops grown on a farm or ranch, the intended uses and locations. Producers can contact their FSA county office for acreage reporting deadlines that are specific to their county. 

Producers should also report crop acreage they intended to plant but were unable to because of a natural disaster, including drought. Prevented planted acreage must be reported no later than 15 calendar days after the final planting date as established by FSA and USDA’s Risk Management Agency.

For questions, producers should call their FSA county office. To find their FSA county office, visit farmers.gov/service-center-locator.

 

Textile Supply Chain Addressed in African Trade Hearing

The House Ways and Means Committee’s Trade Subcommittee held a wide-ranging hearing exploring the economic relationship between the United States and the 32 African nations that have been granted favorable access to the U.S. market since enactment of the African Growth and Opportunity Act (AGOA) in 2000.

Cotton was mentioned during a brief exchange between Representative Jodey Arrington (R-TX) and one of the hearing witnesses, Afzal Nasser. Nasser, a sourcing executive for the Cintas Corporation, was asked by Arrington whether he believed AGOA countries were abiding by strict rules-of-origin requirements applying to the cotton textile supply chain. While Nasser was unable to speak broadly on the issue, he stated that his own company was in compliance with all current standards.

 

Regulatory Reform Advocated

The NCC joined dozens of organizations on a letter at https://bit.ly/4bZIg0D expressing support for bipartisan legislation to improve the federal regulatory process.

The Regulatory Early Notice and Engagement Act (H.R. 8204), sponsored by Representatives Guy Reschenthaler (R-PA), Don Davis (D-NC), and Tim Burchett (R-TN), would require a federal agency, within one week of initiating rulemaking, to indicate on a publicly accessible website the problem the new regulation is attended to address and elaborate upon whether alternatives to a new regulation have been explored. This bill is awaiting action in the House Judiciary and Small Business Committees.

The letter points out that under current practices, “industry is left to navigate a sea of regulatory uncertainty and unable to plan for long-term investments.” H.R. 8204, the letter concludes, “can help restore order through more vigorous congressional oversight of federal agencies.”

 

Acephate Comment Period Extended

Late this week, the EPA notified the NCC that they would extend the public comment period for 30 days to July 31. EPA has proposed a ban on agricultural and other uses. NCC is working on comments and data to support continued use and urges growers and others to do the same.

 

FCIC Approves Cost Share Increase for Enhanced Coverage Option

The Federal Corp Insurance Corporation’s Board of Directors (FCIC) voted to increase the subsidy rate for the Enhanced Coverage Option (ECO) to be harmonized with that of the Supplemental Coverage Option (SCO) and the Hurricane Index Protection (HIP) plans.

Upon its creation for the 2021 crop, ECO growers initially received a 44% premium cost-share, however that level will increase to 65% beginning with the 2025 crop.  

ECO is a supplemental policy that offers area-wide coverage up to 90 to 95% of the expected area revenue or yield depending on the type of underlying coverage purchased. The design is to offer an additional layer of coverage on top of a grower’s individual coverage. ECO can also be purchased in addition to SCO which offers coverage up to 86% of an area-wide revenue or yield policy down to the individual coverage level.  

The increased cost share rates will make ECO more affordable to producers, thus giving growers an additional option to manage their risk. Cotton producers remain prohibited from purchasing both SCO/ECO and STAX as these polices overlap.

 

Crop Estimate Unchanged

In its June report, USDA projects U.S. 2024-25 production to be 16.00 million bales, unchanged from the previous month. Mill use and exports were also unchanged from the previous month at 1.90 million and 13.00 million bales, respectively. The estimated total offtake stands at 14.90 million bales. With beginning stocks of 2.85 million bales, this would result in U.S. ending stocks of 4.10 million bales on July 31, 2025, and a stocks-to-use ratio of 27.5%.

For the 2023-24 marketing year, USDA gauged U.S. cotton production at 12.07 million bales, unchanged from the May report. Mill use was raised 50,000 bales to 1.85 million bales. Exports were lowered 500,000 bales from the previous month to 11.80 million bales. The estimated total offtake stands at 13.65 million bales, generating ending stocks of 2.85 million bales and a stocks-to-use ratio of 20.9%.

In its June report, USDA projects world production for the 2024-25 marketing year at 119.14 million bales, 90,000 bales higher than the previous month. Mill use is projected at 116.94 million bales, 80,000 bales higher than the previous month. With beginning stocks at 80.97 million bales, this would result in world ending stocks of 83.49 million bales on July 31, 2025, and a stocks-to-use ratio of 71.4%.

For the 2023-24 marketing year, world production was estimated to be 113.78 million bales, up 210,000 bales from the May report. World mill use was lowered 290,000 bales to 113.07 million bales. Consequently, world ending stocks are estimated to be 80.97 million bales with a stocks-to-use ratio of 71.6%.

 

Sales, Shipments Steady

Net export sales for the week ending June 6, 2024 were 186,300 bales (480-lb.). This brings total ‘23-24 sales to approximately 13.3 million. Total sales at the same point in the ‘22-23 marketing year were approximately 14.3 million bales. Total new crop (‘24-25) sales are 2.0 million bales (480-lb.). 

Shipments for the week were 201,500 bales, bringing total exports to date to 9.9 million bales, compared with the 10.6 million bales at the comparable point in the ‘22-23 marketing year.

With approximately two months remaining in the marketing year, weekly shipments must average roughly 243,000 bales to reach the USDA projection of 11.8 million bales.

 

Capital Calendar

June 11

The House and Senate convened.

The House Appropriations Committee’s Agriculture, Rural Development, and Food and Drug Administration Subcommittee will hold a markup of the FY25 USDA-FDA appropriations bill. More information and a link to view the markup are at https://bit.ly/3x3A7co.

June 12

The House Ways and Means Committee’s Trade Subcommittee held a hearing, “Looking Beyond 2025 for Trade with Sub-Saharan Africa, Haiti, and Others.” More information and a link to view the markup are at https://bit.ly/4bZpA0R.

Next Week

The House is in recess.

June 17

The Senate convenes.

 

 
Effective June 14-20, 2023

 

Adjusted World Price, SLM 11/16 57.32 cents *
Fine Count Adjustment ('22 Crop) 0.00 cents  
Fine Count Adjustment ('23 Crop) 0.07 cents  
Coarse Count Adjustment 0.00 cents  
Marketing Loan Gain Value 0.00 cents  
Import Quotas Open 13  
Special Import Quota (480-lb. bales) 428,398  
ELS Payment Rate 0.00 cents  
*No Adjustment Made Under Step I  
     
Five-Day Average  
Current 5 Lowest 13/32 CFR Far East 81.59 cents  
Forward 5 Lowest 13/32 CFR Far East  80.53 cents
Fine Count CFR Far East 83.97 cents  
Coarse Count CFR Far East 82.30 cents  
Current US 13/32 CFR Far East 82.35 cents  
Forward US 13/32 CFR Far East 83.45 cents