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National Cotton Council Chairman Bobby Greene, a Courtland, AL, cotton ginner, addresses NCC Beltwide conferees. |
SAN ANTONIO, TX - National Cotton Council of America Chairman Robert Greene said the NCC continues to devote significant resources to technology development and transfer, as evidenced by the NCC's continued coordination of the Beltwide Cotton Conferences.
"Bringing resolution to technology-based priorities has in many cases been facilitated by these conferences," said Greene, who gave the opening address at the '04 Cotton Production Conference here this month.
"The conferences and the papers presented are comprised of the many efforts under way in a wide array of scientific disciplines to lower costs and apply technology to a host of regulatory issues. The success of the Beltwide Cotton Conferences can in large part be measured by what you take home that positively impacts your operations."
In a review of NCC activities, Greene said defense of the farm bill was a primary focus during '03, beginning with the budget debate and continuing through the process of developing agricultural appropriations.
"NCC membership responded during the agricultural appropriations process," Greene said. "Through (our) contacts, we emphasized that the farm bill must remain intact and any amendment that would alter farm bill provisions must be rejected. Those efforts paid off and the House bill contained no farm bill amendments.
"The industry also was energized in urging opposition to payment limitations or any other farm bill amendment in Senate agricultural appropriations, and these efforts also were successful."
Greene noted that the NCC also helped secure a $3.1 billion disaster assistance program that included $50 million in cottonseed market assistance for the '02 crop; joined other agricultural organizations in urging USDA to implement the Conservation Security Program as soon as possible; and worked with the Agricultural Coalition for Immigration Reform on legislation for streamlining the current immigration process for hiring agricultural workers.
Dr. Mark Lange, NCC president and CEO, said trade issues framed a major part of the NCC's activities in '03 and will continue as a focal point in the foreseeable future.
"The NCC will evaluate trade agreements as to their capacity to serve the interests of the entire U.S. cotton industry," Lange said. "We work to ensure that both the administration and Congress understand the issues affecting cotton and endeavor to influence the specific form of proposed agreements to reflect the U.S. cotton industry's concerns."
With the Doha Round of World Trade Organization negotiations, the Central America Free Trade Agreement, a proposed Free Trade Area of the Americas and Brazil's challenge of the U.S. cotton program through the WTO, Lange said, "trade policy now stands virtually shoulder to shoulder with farm policy in determining the ultimate success of the U.S. cotton industry."
In an update of Washington activity, NCC Vice President John Maguire said that redistricting and retirements will generate changes in the House for the next Congress. He said the NCC needs members' support to make sure the newly elected members are familiar with the cotton industry and its issues.
Maguire said the White House has announced intentions to propose spending reductions as part of the President's budget proposal.
"Farm programs likely will be included in the proposed budget cuts," Maguire said. "Undoubtedly, there will be proposals to save money by modifying programs or by the now all-too-familiar, annual proposal to reduce payment limits ... The NCC will continue to work with all agriculture and allied organizations to effectively defend commodity programs and other key provisions of the new farm law."
In a review of farm program support mechanisms, Dr. Gary Adams, NCC vice president for Economics and Policy Analysis, said the program plays a vital role in enhancing the health of the cotton production sector, particularly in times of depressed prices.
"However," Adams said, "for the program to be effective, it is necessary that producers understand how changing market conditions impact the support mechanisms that are in place. The current farm bill is vital to the structure and stability of the U.S. cotton production sector."
Adams said that while the new legislation continues many of the same principles of the previous farm bill, such as decoupled payments, planting flexibility and no acreage reduction programs, there are several new twists, including counter-cyclical payments, to which producers still are adjusting.
NCC Board member and cooperative executive David Stanford reviewed changes taking place in the U.S. cotton industry and about positioning for the future. He said he expects the U.S. will produce 16-18 million bales of cotton per year, "meaning that 10-13 million bales each year will need to find a home in the international market. We have some challenges ahead on that front that need to be met."
Stanford said China will consume every third bale in the world in '03-'04 and is expected to import about 7 million bales.
"They have an import license program that prevents market forces from working freely. As an industry, we need to continue to ask the Chinese government to allow their mills regular access to the world market and conversely let the world have regular access to Chinese textile mills."
The president of Globecot, Robert Antoshak, said the U.S. cotton industry must improve staple length and quality and step up educational efforts with foreign spinners about U.S. cotton in support of export sales.
Dramatic shifts in global textile production have created a growing export market for U.S. cotton, while domestic consumption continues to shrink.
"Because of these shifts, close attention has to be paid to quality, price, cotton varieties and education. In the long run, supporting export sales will be a real challenge going forward, particularly in China," he said.
Memphis merchant William B. Dunavant Jr., said the biggest issue facing U.S. cotton producers in the coming year is China.
"It seems that everything changes every six months because of what is happening in China," he said "Their cotton consumption will be around 30.3 million bales this year. They literally are controlling world cotton consumption as we look to our future."
He said the U.S. is rapidly becoming the major cotton exporter in the world, partly on the strength of a bad Chinese cotton harvest, and predicted cotton prices should remain high in '04, "especially if China continues to play the game in the world markets."
Dunavant noted that there will be a real battle over the next few years in maintaining the current farm law with no major changes, and it is crucial for all industry members - through the NCC - to fight hard for maintaining the farm program. "It appears that Brazil and West Africa are not going to back off of threats even though prices are at least 10 cents higher than a year ago."
For 2004, Dunavant projected U.S. cotton production increasing by 475,000 bales, U.S. cotton consumption dropping from 6.2 million to 5.9 million bales and US exports exceeding 12 million bales.
