Jan. 29
Gins still rolling
Ginners are closing in on USDA's production estimate, with just over 13 million bales processed as of Jan.1, according to USDA's
Jan.11 Cotton Ginnings report. Alabama, North Carolina and Virginia remain the only states that are ahead of last year's ginnings
on the same date. The next ginning report is due Feb.10.

Feb. 5
What I did on my trip to Disney World
By Jack Mauney

Land of Cotton reporter Jack Mauney is a world-renowned cotton physiologist. Since retiring from USDA’s Western Cotton Research Lab in Phoenix, Mauney has consulted with growers in the Mississippi Delta and Arizona. During the last year, he has been exploring the serpentine caverns of the cotton market.

One can tell a lot about the interests and stresses in the cotton industry by watching which lecture rooms are full to overflowing during the Beltwide Conference. As usual, Billy Dunavant commanded a crowd. In addition, the talks by commodities traders Thomas Mueller and Eric Matsen were to a full house. The panel discussions on seed quality, precision farming and ultra-narrow-row production were lively and had some pointed exchanges between the panelists which provided some insights into the thinking of industry leaders.

Here are some items that I thought were particularly interesting:

Dunavant advised growers NOT to fix 1999 production at the $.64 presently quoted on December futures.  He believes prices will go up. On that question, O.A. Cleveland advised growers (at the meeting and via his newsletter) to go ahead and fix “new crop” price at that level as a floor and buy some December calls later (“but not now”).  NCC analyst Mark Lange’s look at the market concluded that there is little reason to expect shortages to develop which will drive up prices, and that the U.S. price can fall below world price and has done so on occasion.

On the marketing front, the conference was pretty gloomy. Consensus seemed to be that only some renewal of Step 2 funding or other form of Congressional action can get prices out of the swamp. Some were saying that the market may have already built in an expectation of renewed funding by as much as $.06 in the present price.

On the other hand, John McGuire, NCC man in Washington, did not see cotton problems as the No. 1 issue for the new Congress. He thought disaster-relief issues were more likely to get attention. Until the Cotton Council works out some unified proposal for renewed funding, it remains a long shot.

We were reminded that NAFTA has worked to U.S. cotton’s benefit by making Mexico the major importer of U.S. cotton.

A new initiative (CBI) to aid the countries devastated by last summer’s Hurricane Mitch could create a new ability to export to Caribbean nations.

Options strategies must be at the heart of growers’ modern marketing strategies, options traders told us.  They urged growers to use options rather than futures. Those futures traders are “trying to kill you,” Mueller said. And believe me, they are good at it. (Editorial comment is Mauney’s.)

On marketing of UNR-produced cotton, the panelists agreed that this remains a tough sell with the mills.  Mill spokesmen contend that the problem for them is not the production configuration but the stripper harvesting with its tendency to produce barky grades.  Dan Burns, a grower from California, grew the UNR on beds and harvested with a spindle picker and got no complaints. Allan Baucom, from North Carolina, is now completely committed to UNR and has a private buyer. He, however, considers that the market cannot handle a large influx of stripper cotton from the Southeast and Midsouth until it learns how to value this type of cotton. The mills seem to say that eventually this method of production and harvest may find a place in the market, just as Texas stripper-harvested cotton has. They are discounting it now because it is new and has to move slowly.

Precision farming of cotton is presently severely limited by the yield-monitoring technology available.  Yield monitors on pickers are not as accurate for cotton as for grains. That means that our ability to map fields for precision inputs is hampered.

For those concerned about the concentration of power in the seed-supply business, Monsanto announced that it is auctioning off Stoneville Pedigreed Seed. AgrEvo reminded us that the merger of AgrEvo and Rhone-Poulenc to form Aventis will create a company 10 times the size of Monsanto, and that its Fiber-Max varieties will contain Bt and herbicide tolerance by 2002.

There were more than 600 research papers presented at the Research Conference. Clearly no one can digest all that data. Of the papers I heard, the message coming through was that the plant growth regulators don’t give much of a yield boost over the years. Nothing consistent is showing up.
 

USDA expects lower imports
U.S. mills are expected to import less cotton in the coming year as a result of the increased U.S. production estimate and the recent decline in U.S. prices relative to foreign prices, according to the USDA World Agricultural Supply and Demand Estimate issued Tuesday. The import reduction is projected to be 350,000 bales. Domestic mill use also is reduced slightly to reflect textile imports' rising share of retail consumption. These changes leave ending stocks up nearly 15 percent from last month at 3.2 million bales.

Higher world cotton production and lower use result in an increase of more than 3 percent in ending stocks worldwide. China's production estimate is raised, consistent with that government's preliminary official estimate. Larger crops in the United States and China are partially offset, however, by decreases in Pakistan and Argentina. The reduced global consumption estimate reflects reductions for Pakistan, Russia and the United States and increases for Indonesia and Taiwan. World trade is revised down marginally to reflect lower exports for China and Pakistan and larger exports for Argentina and Australia.

Feb. 10
Can the West make up the difference?
Ginning coasted toward a stop across most of the Cotton Belt in early January, but continued strong in Texas, Arizona and California. Beltwide, gins added more than 729,000 bales to the previous total. Texas ginned more than 100,000 bales from Jan. 1 to Jan. 15, while Arizona added nearly 100,000 bales and California processed more than 32,000 bales during the same period.

Although the estimate for Arkansas was reduced 600 bales, all other states listed in USDA’s Jan. 25 Cotton Ginnings report added a few hundred bales to their ginning numbers for a total of 13,366,300 bales beltwide, within a 500,000 bales of USDA’s latest production estimate.

Click here for a table showing ginning progress since Sept. 15.

Feb. 11
Texas BWEP update: Permian Basin zone
Texas cotton producers in the Permian Basin Boll Weevil Eradication Zone should attend a public hearing today at 3 p.m. at the Farmers' Co-op Gin, 200 W. Avenue F in Ackerly. The Texas Department of Agriculture will hear comments from growers and landowners. Local committee members have proposed a maximum assessment rate of $6 per acre for dryland cotton and $12 per acre for irrigated cotton.

The Permian Basin Boll Weevil Eradication Zone consists of approximately 500,000 acres of cotton in Dawson, Ector, Howard and Martin counties and portions of Borden and Midland counties.

Cotton producers in the Permian Basin zone will vote April 8 to determine whether to establish a boll weevil eradication program for the zone, establish the maximum assessment rate and elect a board member to serve on the Texas Boll Weevil Eradication Foundation.

Producers who farm in the zone and who have grown cotton for at least seven years may submit their names for the board member position. Those wishing to be placed on the ballot must fill out a nomination form and biographical information sheet. The nomination must be supported by the signatures of at least 10 other eligible cotton growers in the zone.

Forms are available at local county extension service offices and the Texas Department of Agriculture in Austin at (800) 835-5832 or (512) 463-7593. Completed forms must be received in Austin by March 9. They can be mailed to the Texas Department of Agriculture at P.O. Box 12847, Austin, Texas, 78711 or faxed to (512) 463-1104.

Feb. 19
BWEP: Southern Blacklands votes yes for zone, no for funding
Cotton producers and landlords in Texas' Southern Blacklands have voted to establish a boll weevil eradication zone and elected Williamson County cotton producer Donald Stolte to represent the zone on the statewide board of directors for the
Texas Boll Weevil Eradication Foundation Inc. Voters, however, did not approve an assessment to fund eradication activities.

The proposed assessment of $16.50 per land acre dryland and $27 per land acre irrigated was budgeted to cover all program costs. Approximately 99,000 acres in 65 counties comprise the Southern Blacklands zone. Under current Texas law, the zone will not be able to vote again on any amended assessment proposals for a period of 12 months.

Meanwhile, state government is working on several ways to help shift the burden of funding for eradication programs off the backs of producers. In addition to an emergency appropriations bill for $25 million and a cost-share bill for the programs, Texas Agriculture Commissioner Susan Combs is proposing to lend more than $100 million in low-interest funds from the Texas Agricultural Finance Authority to the Texas Boll Weevil Eradication Foundation to reduce costs to growers.

"It is of utmost importance that eradication be as successful in Texas as it has been in other states such as Georgia, Alabama and the Carolinas," Combs said. "These other states received a 30 percent direct cost share from the federal government to offset the cost of their program. The federal share has now dropped to 10 percent, so state assistance will help make up some of the difference to complete this critical program in Texas.

"If we are able to decrease the estimated $100 an acre program by $20 with direct funding, I am hoping to further reduce the cost of the additional $80 through the low-interest loan program." Combs said.

"The money to lend for eradication is already available, so this proposal is good for farmers and taxpayers alike," she said.

Growers inside or outside eradication programs might want to make the trip to Lubbock April 9 for a program put on by the Texas Agricultural Extension Service. Tentatively entitled "Managing the Boll Weevil On Your Own in 1999," the workshop take producers step by step through boll weevil management during each stage of the cotton season. It will also teach growers what to expect as they enter diapause treatments as part of a full-scale eradication program. The workshop is held in conjunction with the Plains Cotton Growers annual meeting at the Lubbock Civic Center.

Permian Basin zone
Texas cotton producers and land owners in the Permian Basin Boll Weevil Eradication Zone will vote April 8 to determine whether to establish a boll weevil eradication program for the zone, establish the maximum assessment rate and elect a board member to serve on the Texas Boll Weevil Eradication Foundation.

The Permian Basin zone consists of approximately 500,000 acres of cotton in Dawson, Ector, Howard and Martin counties and portions of Borden and Midland counties. Local committee members have proposed a maximum assessment rate of $6 per acre for dryland cotton and $12 per acre for irrigated cotton.

Producers who farm in the zone and who have grown cotton for at least seven years may submit their names for the board member position. Those wishing to be placed on the ballot must fill out a nomination form and biographical information sheet. The nomination must be supported by the signatures of at least 10 other eligible cotton growers in the zone.

Forms are available at local county extension service offices and the Texas Department of Agriculture in Austin at (800) 835-5832 or (512) 463-7593. Completed forms must be received in Austin by March 9. They can be mailed to the Texas Department of Agriculture at P.O. Box 12847, Austin, Texas, 78711 or faxed to (512) 463-1104.

Northwest Plains zone
Growers in the Northwest Plains zone will vote in a referendum March 12. Those growers have four more scheduled meetings to discuss the referendum. The plan would be funded by a grower assessment of $12 per land acre irrigated and $5 per land acre dryland.

Here's the schedule:
Feb. 17, Muleshoe, 7:30 a.m., Civic Center
Feb. 17, Friona, noon, Friona Community Center
Feb. 18, Farwell, noon, Farwell Community Center
Feb. 18, Olton, Earth & Spring Lake, 7 p.m., Spring Lake/Earth High School Cafeteria

Southern High Plains/Caprock zone
Growers in the Southern High Plains/Caprock zone will vote by mail by Feb. 26. Vicki Davis Patscke, a Lubbock county cotton producer who farms around the Acuff community, was the only nominee for to represent the zone on the state Boll Weevil Eradication Foundation.

Western High Plains zone
The Western High Plains zone approved its eradication program in December and elected Yoakum County cotton producer Don Parrish to the foundation's board of directors.

Outside Texas
Votes are being counted in the first phase of the Mississippi referendum. Results are expected this week.
Tennessee growers approved their eradication program in January. Northeast Louisiana approved its program in October.
Click here to go to the Boll Weevil Eradication Program website map of eradication progress across the U.S. cotton belt.
 

Glickman planning regional forums to talk about 'farm safety net'
Agriculture Secretary Dan Glickman says he wants to hear your ideas about what should be included in the “farm safety net.” He’s planning a series of forums and inviting “farmers, ranchers, bankers, local officials  — anybody who has an interest in agriculture — on what they think should be included,” he said in his Feb. 8 radio address.

"Soon, I will hold three regional forums around the country and I'm directing Deputy Secretary Rominger and Under Secretary Schumacher to hold others,” he said. “I am also inviting members of Congress to attend.

"When I recently announced our budget proposals for 2000, I included some very specific recommendations on strengthening the farm safety net,” he said.

"Our plan begins with a $400 million down payment on crop insurance that will reduce farmers' insurance premiums by 30 percent this year, a strong first step toward a broad-based crop insurance program that will be the anchor for the safety net.

"I also put forth several specific proposals that we want to work with Congress and agricultural interests in developing.  They include ideas on how to improve crop insurance and the safety net from more crops covered to making crop insurance more affordable ... to including multi-year policies ... to a new pilot revenue insurance program for livestock ... to non-insurance proposals like extending due dates on commodity loans or subsidizing on-farm storage,” Glickman said.

“I want to know directly from farmers if we're on the right track. I'm interested in their ideas on how we can fix crop insurance and make this program more attractive. I also want to hear from folks their thoughts on other non-insurance ideas for strengthening the farm safety net,” he said.

The dates and locations of the forums have not yet been announced.
 

Rayner elected NCC president
Ron Rayner, a producer from Goodyear, Ariz., was elected president of the National Cotton Council of America at the industrywide organization's 60th anniversary meeting in Memphis.

Rayner, 57, served as Council treasurer in 1998. He succeeds Jack Hamilton, a Lake Providence, La., producer, who becomes council board chairman.

Rayner has served on the council's board of directors and in other leadership positions. He was a member of the council's Public Relations and International Market Development Committee in 1998. He also served as a director and executive committee member of Cotton Council International, the council's export promotions arm, during 1998 and led CCI's executive delegation to Turkey, Bangladesh and Indonesia.

Rayner chaired the council's American Cotton Producers in 1996 and 1997. He also served as a member of Cotton Incorporated's board, having retired as a director in December 1998.

As a partner in A Tumbling T Ranches with his two brothers and nephew, Rayner grows cotton, alfalfa and grains in Goodyear and near Gila Bend. He also is an organizing director, stockholder and president of Farmer's Gin Inc., in Buckeye and organizing chairman of Arizona Marketing Cooperative, a new cottonseed marketing enterprise.

Other elected council officers for 1999 are: vice presidents Duke Kimbrell, manufacturer, Gastonia, N.C.; and Tim Taylor, crusher, Memphis; and treasurer, Robert McLendon, Leary, Ga.

Re-elected vice presidents are: James Echols, merchant, Memphis; Robert Greene, ginner, Courtland, Ala.; Van May, cooperative official, Lubbock; and Willis Willey, III, warehouser, Memphis.

Also re-elected are Phillip C. Burnett, executive vice president and secretary; and Gaylon B. Booker, senior vice president, both of Memphis; and A. John Maguire, vice president for Washington operations.
 

Council directors for 1999

Producers — Hollis O. Isbell, Muscle Shoals, Ala.; Boyd Holley, Bastrop, La.; Mark D. Williams, Farwell, Texas; Ted A. Pierce, Buckeye, Ariz.; and Allen B. Helms Jr., Clarkedale, Ark.

Ginners — David K. Lynch, Bennettsville, S.C.; Charles H. Dante, Dumas, Ark.; Bill Mikeska, Eola, Texas; Charles C. Owen, Pima, Ariz.; and Van F. Murphy, Quitman, Ga.

Warehousemen — Carl W. Nelson Jr., Selma, Ala.; Neill M. Sloan, Portland, Ark.; Ron Harkey, Lubbock, Texas; Gary J. Nichols, Memphis; and Larry Lively, Memphis.

Merchants — Robert S. Weil, II, Montgomery, Ala.; Gary Taylor, Cordova, Tenn.; Ernst D. Schroeder, Bakersfield, Calif.; Rodger C. Glaspey, Fresno, Calif.; and Joseph Walker, II, Columbia, S.C.

Crushers — Michael L. Johnson, Decatur, Ill.; William G. Clark, Greenwood, Miss.; Hollis G. Sullivan, Harlingen, Texas; Heather Walker, Chandler, Ariz.; and Scott Middleton, Jonestown, Miss.

Cooperatives — John J. Cooper, Raleigh, N.C.; Woods E. Eastland, Greenwood, Miss.; W. David Stanford, Lubbock, Texas; Robert W. Norris, Bakersfield, Calif.; and Marshall W. Grant, Garysburg, N.C.

Manufacturers — Charles F. Hamrick II, Gaffney, S.C.; Neil H. Hightower, Thomaston, Ga.; G. Stephen Felker, Monroe, Ga.; Jerry D. Rowland, Winston-Salem, N.C.; and D. Harding Stowe, Belmont, N.C.
 

7.1 million acres offered for CRP

The sign-up for the Conservation Reserve Program brought in about 90,000 offers for about 7 million acres, Agriculture Secretary Dan Glickman announced last week. Producers are scheduled to be notified of acreage acceptance in early March. The sign-up period ended Dec. 11.

The CRP is based on voluntary partnerships between government and members of the public. Farmers receive annual rental payments and cost-share assistance for establishing various kinds of protective cover on suitable farm property to protect and improve the quality of the air, water, soil and wildlife habitat. Rents are based on local agricultural-value market rates and acres are selected to maximize environmental benefits.

Here are the preliminary figures for applications in cotton-producing states. These are from preliminary returns from Farm Service Agency field offices and can change.
 

State	No. offers	No. acres
Alabama	2,001	91,270
Arizona	0	0
Arkansas	636	45,887
California	43	10,505
Florida	482	20,047
Georgia	3,417	129,979
Kansas	7,288	544,093
Louisiana	789	76,478
Mississippi	2,661	160,139
Missouri	3,672	179,489
New Mexico	166	30,414
North Carolina	1,002	17,833
Oklahoma	1,871	216,306
South Carolina	1,349	41,570
Tennessee	1,147	39,097
Texas	4,362	655,877
Virginia	521	10,942

1998 cotton production climbing
The 1998 cotton crop estimate continues to rise. USDA’s January estimate pegs production at 13.8 million bales, a 3 percent increase from December. Yields are expected to average 618 pounds per harvested acre, down 55 pounds per acre from last year's average.

Improved harvest numbers from Georgia and Texas account for the production estimate increase.

Texas production went up some 200,000 bales from the December forecast, and despite horrendous growing conditions over much of the season, the state’s average yield of 509 pounds per harvested acre ties its record high set in 1996, according to the USDA report. Texas is now expected to produce 3.55 million bales, still more than a million bales lower than 1996 production and 1.6 million bales lower than in 1997. Drought resulted in high abandonment in Texas. Of more than 5.5 million acres planted to cotton in 1998, only some 3.3 million acres were harvested.

Georgia’s production rose 150,000 bales from December 1.55 million bales, making it the second-largest producing state in 1998. Favorable fall weather facilitated boll opening and harvest, and damage from Hurricane Georges, which hit in August, was less than expected. Still, Georgia’s anticipated 1.55 million bales is nearly a half-million bales short of its production in 1997 and 1996. Yield is expected to average 564 pounds per harvested acre in the state, 82 pounds lower than last year and 183 pounds lower than in 1996.

California is in third place with just under 1.5 million bales, unchanged from the December estimate. California’s yield average looks like 897 pounds per acre, down almost 300 pounds per acre from last year. California’s expected production of about 1.5 million bales is just over half its 1997 production.

Mississippi comes in close behind California, with 1.45 million bales.

Arizona expects an average yield of 1,100 pounds per acre, making it the only state expected to post a yield average of more than 1,000 pounds per acre.

Four states are projected to surpass their 1997 production: Alabama with 570,000 bales; Kansas with 13,400 bales; North Carolina with slightly over 1 million bales; and Virginia with 139,800 bales.
 

Feb. 24

Less than 100,000 new bales
The pace of ginning is definitely slowing. Whereas Texas and Arizona each added about 100,000 running bales to the beltwide total in early January, USDA’s Cotton Ginnings report for Feb. 10 shows only 97,950 new bales ginned in the last two weeks of January.

The numbers actually dropped in Alabama and Arkansas and remained the same in Missouri, North Carolina, Tennessee and Virginia.

Most of the increase came from Texas, which added 45,300 bales. Arizona added 26,950 bales; Georgia, 11,600; and California, 10,150.

The total bales ginned is 13,464,250. USDA’s production estimate for the 1998 crop is 13.8 million bales. According to USDA's Leslie Meyer, who compiles cotton statistics for the agency's Cotton and Wool Outlook, the projection has already been reached. How's that? Meyer explains that the ginning report lists running bales, which "typically weigh above a statistical (480 pound) bale used for accounting purposes. This, of course, would give you more statistical bales.

"For example, last season's average running bale weighed about 494 pounds, which is about 3 percent above a statistical bale weight. Therefore, when 3 percent is added to the reported number in the Cotton Ginnings report, a figure above the 13.8 million bales is attained which is what we were referring to in the Cotton and Wool Outlook report."

Click here for a table showing ginning progress since Sept. 15.
 

Council's crystal ball: 17 million bales in '99
U.S. cotton producers are projected to produce 17 million bales of upland and ELS cotton in 1999, National Cotton Council economists said at the council's 60th anniversary meeting in Memphis. According to projections based on the council's annual early season planting intentions survey, the crop will be produced on 13.5 million acres, an increase of about 1 percent from 1998 acreage. Upland plantings are projected at 13.2 million acres, up 1.2 percent from last year. ELS cotton is projected to be planted on 279,000 acres.

Increases are projected in the Southeast, 1.1 percent, and in the Southwest, 4.3 percent. The survey showed expected acreage decreases of 1 percent in the Midsouth and 10 percent in the Far West.

Council economist Kent Lanclos noted that many growers will reassess their acreage intentions as planting time approaches and some may choose to plant more or less cotton than they indicated in the survey, which was conducted from mid-December to mid-January.

"With grower prices for cotton below 60 cents, corn below $2 and soybeans below $5, producers see virtually no profit potential in any crop. With a lack of economically viable options, many producers are taking a wait-and-see attitude. As a result, weather, financing and small changes in price could play a larger than normal role in determining 1999 U.S. cotton acreage," he said.

Mark Lange, director of the council's Economic Services Department, estimated domestic mill use will increase slightly in 1999 to 10.8 million bales. However, he said if the Step 2 component of the three-step cotton competitiveness program is not funded again, mill use would remain near the 1998 level of 10.4 million bales. He noted that domestic mill use is being suppressed somewhat by the influx of cheaper textile and apparel imports from Asia, which "now must find homes for much of the (textile) inventory they have or are now producing."

Council economist Debbie Vivien reported that 1998 textile imports are expected to reach 12.3 bale equivalents, up from 10.5 million bales equivalents the previous year, with most of that coming from Mexico, the United States' largest trading partner. She said the council believes textile imports should slow slightly in 1999 reaching 12.5 million bale equivalents because of the expected depreciation of the U.S. dollar over the course of the year. She estimated raw cotton imports for 1999 to reach 200,000 bales.

Vivien estimated exports of U.S. cotton textile products should surpass the 1998 record level of 4.1 million bale equivalents, reaching 4.4 million bale equivalents in 1999. U.S. raw cotton exports in 1999, she projected, will be below trend unless an effective competitiveness program is enacted. If a program is put in place, U.S. raw cotton exports could approach 6 million bales.

The economists project 1999 world cotton production at 87.6 million bales, with the United States accounting for the increase over the 1998 level of 85 million bales. Mill use should be 85 million bales with weakened demand resulting in an increase in world stocks to 43.8 million bales -- the first world ending stocks-to-use ratio greater than 50 percent since 1985.

"The world raw cotton situation remains a troubled and very uncertain market," Lange said. "The many possible actions by China, the uncertain nature of Latin American economic performance, the world's increasing dependence on the U.S. consumer to buy more and more cotton each year and the amazing path of the U.S. economy all hold the world's cotton market participants in an ever heightening degree of anxiety."
 

How we stand: Ag Census results
The United States lost more than 3,000 cotton farms in five years, according to the most recent Census of Agriculture. The Census, whose reports began coming out this week, shows that in 1997 there were 31,493 cotton farms in the U.S., compared with 34,812 in 1992. Although the number of farms was fewer, the number of acres planted to cotton was greater in 1997 — 2.27 million acres greater, in fact. Production was higher too, 2.5 million bales more.

According to the Census, the “family farm,” sometimes portrayed to be gasping its last breath, is alive and well. The Profile of the Nation’s Agriculture classifies 86 percent of farms in the country as family farms. Partnerships account for 8.8 percent and corporations farm only 4.4 percent. “Full owners” operate 60 percent of farms; part owners, 30 percent; and tenants, 10 percent.

About as often as not, however, farming is not the farmer’s sole occupation. While 39.5 percent of operators worked no days off the farm in 1997, 37.1 percent worked off the farm 200 or more days. In real numbers, the Census found that 961,560 farm operators list farming as their principal occupation, down from 1,053,150 in 1992; while 950,299 farm operators list something else as their primary occupation, up from 872,150 in 1992.

Farm size is telling when considering how cotton fits into the overall farming picture. More than 60 percent of the nation’s farms are less than 180 acres. About 21 percent of farms nationwide are 180-499 acres. But only about 18 percent of farms in the United States are 500 acres or more. Of those, 5.3 percent are 1,000-1,999 acres and 3.9 percent are 2,000 acres or more.
 

Get those BWEP ballots in the mail

A reminder: Today is the deadline for mailing ballots in Boll Weevil Eradication referendums in Texas and Mississippi.
 

Mississippi's Delta 1A region approved its program last week.The Western High Plains zone approved its eradication program in December. Texas' Southern Blacklands counties also voted to establish a boll weevil eradication zone, but did not approve an assessment to fund eradication activities. Tennessee growers approved their eradication program in January. Northeast Louisiana approved its program in October.

Levi's to close 11 plants
Levi Strauss & Co. announced this week that it would close 11 of its 22 remaining North American plants and shut down its U.S. transportation fleet. This is the second consecutive year that the denim apparel manufacturer has announced closing of 11 mills.

The announcement came at the end of a 60-day work suspension at seven plants in Texas, Tennessee, South Carolina and Georgia. In September, the company announced a restructuring plan that would close three plants in Belgium and one in France, and two in Texas.

The plants will close in two phases, each with eight months’ notice. Phase 1 will close eight plants in October. Those plants are in  Harlingen and Wichita Falls, Texas; Mountain City, Tenn.; Valdosta, Ga.; Morrilton, Ark.; Warsaw, Va.; Murphy, N.C.; and Cornwall, Ont. Formal notification was Feb. 22. Phase 2 will close three plants by April, 2000. Those plants are in McAllen and El Paso, Texas; and Johnson City, Tenn. Formal notification for Phase 2 will come in June or July, according to the company.

The latest round of closings will cost approximately 5,900 workers their jobs. This includes about 100 employees laid off from the Brantford, Ont., finishing center and approximately 80 fleet employees.

The U.S. employee benefits package, valued at $245 million, includes eight months’ notice; up to three weeks of severance pay per year of service; extended medical coverage; enhanced early retirement program; and a flexible allowance of up to $6,000 for training, education and business start-up expenses.
 

Cone announces more cuts
Cone Mills today announced plans to shut down yarn manufacturing at two North Carolina plants, reduce its screen-printing operation at another plant and cut 650 jobs.

John L. Bakane, who was named chief executive officer of Cone Mills Nov. 10, said the restructuring program is expected to "generate annualized savings of approximately $30 million."

Staffing cuts at Cone, the world's largest denim manufacturer, will come at all levels.

The reorganization will merge denim and sportswear fabrics; reduce the number of managers in the manufacturing staff; downsize the corporate administrative staff; discontinue yarn production at the Cliffside and Florence plants in Rutherford County, N.C., by the spring; and downsize screen printing operations at the Carlisle Finishing plant.

Bakane said the latest action, combined with the previously announced closing of the Salisbury, N.C., plant, will reduce
company employment by approximately 20 percent by mid-1999.

The closing of the Salisbury plant was announced Jan. 6, along with plans for "a comprehensive restructuring program to accelerate the earnings recovery of the company." Cone shipments suffered in 1998 from "weaker retail sales associated with unseasonably warm weather and shifts from basic to fashion styled jeans," according to a company press release, and fourth-quarter earnings did not meet analysts' expectations.

March 22
Outlook puts stocks 21% below last year
Based on the current production estimate, U.S. cotton supplies during 1998-99 are expected to reach only 18 million bales, nearly 21 percent below last season, according to USDA's latest Cotton and Wool Outlook, released Thursday. This estimate includes 350,000 bales of raw cotton imports projected to enter the United States as a result of Step 3 special import quotas which will open early in March, coupled with specific quality needs of U.S. mills that were not available with this season's reduced U.S. crop.

Total demand for U.S. cotton is projected to decline more than 22 percent from 1997-98 to 14.6 million bales, the result of the lower U.S. crop, rising textile imports, a competitive export market, and a 4 percent decrease in world cotton consumption. As a result, 1998-99 U.S. ending stocks are expected to total 3.4 million bales. While actual stocks are projected below last season, the stocks-to-use ratio is expected to rise above 23 percent, compared with about 21 percent in 1997-98.

Here are highlights of the rest of the report:
 

Disaster aid deadline extended
USDA has extended the deadline to sign up for disaster assistance until April 9, Agriculture Secretary Dan Glickman announced Monday. The sign-up was originally scheduled to end March 12.

Congress has authorized more than $2 billion to reimburse farmers hit by natural disasters and who suffered losses greater than 35 percent of their historic yields.

"This money is badly needed by farmers who suffered losses due to natural disasters, the effects of which are made worse by the current slump in farm prices." said Glickman. "We want to make sure that everyone who's eligible has a chance to participate."

Farmers are eligible for compensation either for qualifying losses on 1998 crops or for losses in any three or more crop years between 1994 and 1998 in which a crop insurance indemnity or assistance under the noninsured crop disaster assistance program was received.  Farmers can receive payments under either single-year or multi-year provisions, but not both. USDA will pay at the higher of the two levels. Crop loss payments will be made after all applications have been processed. Payments will be prorated after all applications are reviewed to stay within the program's budget.

Farmers may contact their local USDA Service Center or Farm Service Agency local office, usually listed in telephone directories under "U.S. Government, Department of Agriculture."
 

Texas BWEP status

An ongoing study of boll weevil habitat in the Texas High Plains shows dramatic increases in boll weevil numbers in four of the five counties sampled. The increases in Lubbock and Lynn counties are especially troubling.
 

Number of boll weevils per acre of overwintering habitat sampled in 1999:
County	1997	1998	1999
Parmer	0	0	342
Bailey	342	684	1,196
Lubbock	6,070	4,553	25,266
Lynn	15,379	18,717	33,344
Dawson	3,297	35,557	22,935
Populations of live overwintering boll weevils per acre of habitat are calculated from the numbers of live weevils found in a square meter sampling.

The 16-county study is a team effort of Extension IPM agents, Texas Agricultural Experiment Stations, Texas Agricultural Extension Service and Plains Cotton Growers Inc. Goals of the program are to better understand the ecology of the boll weevil as it invades and spreads across the High Plains area and to  is to provide useful information to growers  predicting where boll weevils may have overwintered and at what levels.

Here is a quick rundown of Texas Boll Weevil Eradication Zones, courtesy of Roger Haldenby, vice president for operations of Plains Cotton Growers Inc.

Southern Rolling Plains: Active zone with eradication almost completed. For an explanation of the zone's complex assessment structure, contact the Texas Boll Weevil Eradication Foundation at 800-687-1212.

South Texas/Winter Garden: Active zone getting ready to start another full year of eradication. Maximum assessment is $23.14 per acre.

Rolling Plains Central: An active zone also entering a full year of eradication. Maximum assessment is $10 per land acre.

Western High Plains: Voted in December 1998 to establish an eradication zone and set a maximum assessment of $12 per cotton land acre irrigated, and $6 per cotton land acre dryland. Initiation of a program is contingent on obtaining state and/or federal cost sharing.

Southern Blacklands: Voted in February to establish a zone but failed to achieve the required majority on an assessment. The proposed assessment was $27 per cotton land acre irrigated, $16.50 per cotton land acre dryland. The zone will be on hold for one year before another assessment referendum can be held.

Southern High Plains Caprock: Ballots are in safekeeping at TDA awaiting canvassing March 10. Proposed maximum assessment is $12 per cotton land acre irrigated, and $6 per cotton land acre dryland. Initiation of a program is contingent on obtaining state and/or federal cost sharing.

Northwest High Plains: Ballots are out for this zone with a deadline for return to be postmarked by midnight March 12. The proposed maximum assessment is $12 per cotton land acre irrigated, and $5 per cotton land acre dryland which is sufficient to fund a program regardless of state/federal cost share. Ballots will be counted March 22.

El Paso/Trans Pecos: Ballots are being mailed for a referendum date of March 26.  Proposed maximum assessment is $20 per land acre of cotton. Ballots will be counted April 6.

Permian Basin: Referendum is set for April 8 with ballots to be counted April 15. Proposed maximum assessment is $12 per cotton land acre irrigated, and $6 per cotton land acre dryland. Initiation of a program is contingent on obtaining state and/or federal cost sharing.

Northern Rolling Plains: Referendum date April 22. Ballots to be counted April 29. Proposed maximum assessment $15 per planted row acre irrigated, $10 per planted row acre dryland.

Northern Blacklands: The Texas Agriculture Commissioner finalized designation of the eradication zone in February. Creation of the zone will allow cotton growers with similar planting practices and problems to tailor future eradication efforts on a more localized scale. A referendum will be conducted at some time in the future when requested by growers in the zone.

St. Lawrence: This zone was created by statute. An Aug. 31, 1998, referendum to  transfer Northern Glasscock county to the Permian Basin zone failed to achieve the required majority. There has been no subsequent activity.

Northern High Plains: Nothing going on here at all at this time.
 

Last 3 Mississippi counties approve BWEP
Mississippi's three-county Delta B Region has passed its boll weevil eradication referendum with 79 percent of the votes. The Delta A Region passed its referendum in February, enabling the B Region vote to go ahead. With the Delta regions included, all the cotton-producing counties of Mississippi have agreed to participate in the eradication program.

Tennessee growers approved their eradication program in January. Northeast Louisiana approved its program in October.

And now, Step 3
The second Step 3 special import quota for upland cotton will be established March 11., USDA's Commodity Credit Corp. announced Thursday. The quota will allow the importation of approximately one week's domestic mill use, about 93.8 million pounds or the equivalent of 195,430 statistical bales.

The first import quota opened Thursday. The quota periods are 90 days, and the cotton must enter the country within 180 days of the opening.

It is likely that Step 3 quotas will continue to be triggered each week "until the weekly average of the cheapest U.S.N.E. quote, less the Cotlook A Index, narrows to under 3 cents per pound," according to Calcot. The difference last week was more than 12 cents, "so it could be a while for that mechanism to kick in." However, USDA estimates only about 350,000 bales actually will be imported under the program during the current marketing year which ends July 31.

The best explanation we've seen of what Step 3 will mean in terms of foreign-grown cotton in U.S. mills comes from Plains Cotton Growers Inc.:

"The reality of the quota situation is that several important considerations are probably going to keep the flow of imports in check," writes Shawn Wade, PCG communications director. "The high cost of shipping cotton from foreign ports to U.S. destinations, the ability to obtain acceptable qualities of cotton for desired end products and fact that many mills are geared to receive just-in-time shipments of raw cotton will all figure into mill decisions of when and if to buy foreign cotton.

"The quality control that U.S. mills require is another factor that may limit the use of imported cotton. "Importing cotton is a buyer-beware proposition since the sales are not automatically subject to Southern Mill rules that allow a buyer to turn back damaged or otherwise unacceptable bales. Unless the buyer and importer specifically agree to use the Southern Mill rules, then buyers run the risk of being delivered bales which would normally be turned back as unacceptable."

"Mills may also find it difficult to manage larger shipments of cotton since most have gotten away from the inventory control procedures involved with storing cotton prior to use.

"On the quality side of the issue imported cotton is also generally sold on type and will not have an independent quality grade like U.S. cotton. The preference for most mills will be to continue to purchase available U.S. cotton unless they need cotton in qualities, specifically high-grade longer staple qualities, that are currently unavailable from U.S sources."

Calcot's Cotton Capsules for Feb. 26 reports that some mills have already bought foreign growths in anticipation of the quota and have been holding the bales in East Coast warehouses. "Sales were made because U.S. prices were higher, compared to foreign cotton. But with current lower pricing, rumors have been floating around the industry of cancellations of some of those sales in favor of U.S. styles."

March 31
Disaster in the House Ag Committee
Ag Secretary Dan Glickman caught hell last week from the House Agriculture Committee in a hearing on delays in crop disaster payments to farmers. Congress authorized the payments in October. USDA did not begin sign-up for this program until Feb. 1, and soon after announced a four-week extension which will delay completion of sign-up until April 9. Payments won't be made until June, a full year after some farmers began suffering crop losses.

“There is absolutely no excuse for the delays that continue to plague implementation of this program,” said committee Chairman Larry Combest, a Republican from Texas. “Last fall, the Congress resisted micromanaging disaster assistance. We provided very broad authorities and tremendous flexibility. It was a Cabinet secretary’s dream.

“This is not rocket science. This is not splitting the atom. This is something the department has done before,” Combest said.  “USDA implemented disaster relief programs in 1986, 1988, 1990, 1991, 1992, and in 1993.  Never before have farmers and ranchers had to wait so long for disaster assistance.”

“When I listen to public and private statements by various individuals from the department, all I hear are excuses. If
the department is not willing to admit they have a problem, then I have to wonder if they are willing to fix it,” Combest
said.

The committee's ranking Democrat Charles Stenholm, also from Texas, was quick to blame high-level USDA officials for the problem. “I am disheartened by the delay in the delivery of this disaster assistance, but let me make perfectly clear that this is not the fault of individuals in the local offices,” said Stenholm. “Hopefully this hearing will result in positive actions that will enable the personnel in the field to deliver disaster assistance to our farmers as quickly as possible.”

Combest pointed out that planting decisions are being made now and that without disaster payments, “many producers will be unable to secure necessary operating loans. Last year we had a natural disaster in farm country. This year, the disaster has been entirely man-made and it happened right down the street at the U.S. Department of Agriculture.”

April 6
More loan money coming
The House last week passed a supplemental appropriations bill for the current fiscal year that includes $110 million to support $1.1 billion for farm loans. The loans will allow farmers and ranchers to finance work this coming season and repay the loans after harvest. An estimated 12,000 producers have been left without a loan source since early February, when the loan funds were exhausted. The supplemental appropriations bill also includes $42.8 million for hiring temporary USDA employees to process the loans.

Texas BWEP depends on 'patches'

Texas' boll weevil eradication program "has become a patchwork quilt," as a result of some zones failing to pass their
referendums, writes David Oefinger of texagnet. The Northwest Plains zone, which passed its referendum last week, is isolated
from other zones because the Southern High Plains/Caprock zone referendum failed. Several other zones could suffer the same
fate if upcoming votes fail in neighboring zones.

Boll weevils move easily from one area to another, making reinfestation of eradicated areas a constant threat. Thus, the wider the
area of contiguous eradication programs, the better the chances for success.

Ballots for the El Paso/Trans-Pecos zone vote will be counted April 6. The deadline for mailing ballots was Friday. The El Paso/
Trans-Pecos Boll Weevil Eradication Zone consists of approximately 60,000 acres in 15 counties: Brewster, Crane, Crockett,
Culberson, El Paso, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terrell, Val Verde, Ward and Winkler.

The Permian Basin zone referendum voting deadline is April 9 with ballots to be counted April 15. Proposed maximum assessment
is $12 per cotton land acre irrigated, and $6 per cotton land acre dryland.

The Northern Rolling Plains zone vote deadline is April 22, with ballots to be counted April 29. Proposed maximum assessment $15 per planted
row acre irrigated, $10 per planted row acre dryland.

The new Northwest High Plains Boll Weevil Eradication Zone consists of Deaf Smith, Parmer, Castro, Bailey and Lamb counties.

Despite a favorable vote of more than 62 percent to establish a boll weevil eradication zone, the Southern High Plains/Caprock Boll Weevil
Eradication referendum failed to achieve the required two-thirds majority. Ballots were counted March 10. The measure also failed to get
favorable votes from 50 percent of the zone acres, which could also have carried it. The zone is now ineligible to conduct another referendum
for one year. Counties in the Southern High Plains/Caprock zone are: Cochran, Crosby, Dickens, Garza, Hockley, Kent, Lubbock, Motley
and portions of Lynn and Terry.

SHP/Caprock is the only zone in which the referendum has failed this year, although when Southern Blacklands growers voted in
February to establish their zone, they did not pass the assessment. The zone will be on hold for a year before it can have another
assessment referendum.

Combest, Glickman exchange barbs over loan money
Farmers now have access to $333 million in additional federal loan money, but it comes at the cost of local USDA offices. Ag Secretary Dan Glickman, after enduring a scathing  interview with the House Ag Committee the week before, authorized the transfer of $30 million to the Agricultural Credit Insurance Fund, which will allow USDA to finance the loans.

"Failure to provide this assistance to farmers could threaten their ability to plant crops, service their debt, and protect their property and their families," Glickman said in a March 26 press release.

What he didn't say was that he pulled the $30 million out of local budgets -- salaries and operating expenses -- of USDA county offices that process the farm loans. Glickman said he instructed the Farm Service Agency to retain 700 temporary employees to help process disaster-related assistance and loan deficiency payments. "These actions will enable us to provide essential services in our local offices through April 16," he said.

"These emergency actions ... draw on current funding and thus threaten our ability to operate without staffing reductions through the end of this fiscal year," Glickman said. "I urge Congress to pass quickly the president's request for supplemental appropriations in a form acceptable to the administration and the American people."

House Agriculture Committee Chairman Larry Combest, a Texas Republican, could find little that was positive to say about the latest move. He again questioned why it took so long to cover a month-long funding gap for farm loans and lambasted the president for milking the money to back them from county USDA offices. (Could Combest be looking at Glickman's cabinet position under a Republican president? One, perhaps, from his own state?)

"After months of watching the loan funds dwindle, it is not clear why the president has waited so long to help farmers, since it now seems he could have done the same shift of funds much earlier," said Combest. "I appreciate that he is responding, but I am concerned why he acts late in March, and shifts funds away from overworked county offices to do this. County offices are behind in efforts to cope with delays by USDA's Washington bureaucrats, and I see the president taking their funds away now as more of a slap, when what they could really use is a pat on the back."

Glickman shifts the blame back to Congress. He said Tuesday at a Sparks food and agriculture policy conference:

"We have been pushing for swift action on the administration's emergency supplemental request. The bill includes $152 million for USDA, which would allow us to increase our loan capacity by over a billion dollars ... and hire the additional staff we need to deliver emergency assistance. But with Congress leaving for recess without passing the bill, we had to get creative. So we shuffled some of USDA's funds last week, transferring $30 million to the Agricultural Credit Insurance Fund, enabling
us to finance $333 million in farm loans. This will keep our credit coffers from running dry at least until mid-April. And it should bridge the gap until the House and the Senate can agree on a single omnibus emergency spending bill."

Glickman pointed out that funding a series of emergency aid packages is not any way to run a farm policy. "As important as these measures are, most of them are stopgaps. They don't constitute a long-term farm policy agenda," he said. "Lurching from one emergency relief bill to the next, damage-control style, is not the most effective way to help our farmers. We have to have a strong, flexible, comprehensive safety net that catches farmers when high prices, global surpluses and bad weather knock them off balance.

"The major failing of the 1996 Farm Bill was that it didn't provide such a safety net. It was, generally speaking, sound legislation. It had strong trade and conservation provisions. It gave farmers more control over their operations, something that was long overdue. But while the bill was perfectly suited to the bullish farm economy of 1996, it offered little protection for when the going got tough. Scaling back the government role is fine, as long as the market is providing for everyone ....

"I don't see any movement to roll back the Farm Bill.But I do think it's imperative that we plug its holes. So I've made the safety net priority No. 1 for 1999.  ... There is no pride of authorship here. We will all have to work together to make this happen.  It will not come cheap.  But as Rep. Combest pointed out, as expensive as crop insurance reform will be -- and it will be expensive -- it's a bargain compared to emergency relief packages."

Furadan gets Section 18 in Texas
The U.S. Environmental Protection Agency has granted Section 18 approval for use of Furadan 4F (flowable carbofuran) to control aphids on cotton in Texas during 1999. In a March 15 letter to the Texas Department of Agriculture, EPA grants the emergency exemption and specifies terms and restrictions for the pesticide's use. The approval expires Sept. 30.
 

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