We want to remind cotton growers that Friday, August 5th, is the deadline to sign up for the Cotton Ginning Cost-Share Program. The program is administered by the USDA Farm Service Agency and provides producers who grew cotton in 2015 with a one-time payment to help offset the cost of ginning cotton. Payments are made on a regional rate – the payment rate for Georgia is $47.44 per acre with a total payment cap of $40,000 per entity. This does not count against your normal $120,000 payment limit under the 2014 Farm Bill. Sign-up for the program started on June 20th and concludes Friday August 5th at your local FSA office. Producers will receive their payments within a couple of weeks of signing up for the program. We would also like to thank USDA Secretary Tom Vilsack for his work, as well as our congressional leaders, for providing this much needed assistance to the cotton industry.
For more information visit our website at www.GeorgiaCottonCommission.org
The Georgia Cotton Commission wants to thank the Georgia Congressional delegation for their support of the GMO labeling bill that passed the Senate and House with support from all of the Georgia members. This bill is important to the whole ag industry but especially important to the cotton industry as a majority of the cotton grown in the U.S. contains at least one transgenic trait. Opponents of this labeling law insisted on even more extreme requirements for labeling of GMO products, which we feel was an unnecessary burden to the ag and food industry since no study has ever shown GMOs to be less nutritious or less safe than non-GMO foods. This new law will preempt the state laws that have been passed around the country and therefore continue to allow products like cottonseed oil to be used in the food industry without a patchwork of differing state labeling requirements. Also, the bill includes an important provision that exempts feed, meaning cottonseed fed to dairy and beef cows will not require the products produced to be labeled. Great leadership from the production ag industry, including the National Cotton Council, were instrumental in insuring the feed provision portion of the bill.
If you’ve been on vacation this week and not watching the cotton market you might not know that for the first time in two years the new crop futures is above 70 cents! This is important because most growers have said 70 cents per pound is about the average breakeven price and therefore no reason to contract unless they can get close to 70 cents.
It appears that the World Agricultural Supply and Demand Estimate (WASDE) that USDA released on July 12 shocked some folks by showing a reduced crop outside of the US. Coupled with reports from India and China, the world’s two largest producers, suggesting much lower crops this year, the market went higher. Also, it doesn’t take an economist to see that weather conditions in Texas and Georgia, the US’s two largest producers, could result in lower yields than were expected just a few weeks ago; thus also potentially pushing prices higher even though the US planted more acres of cotton this year than last.
What this means is that growers need to be extra diligent in the next few days and weeks in case the market slips back down. Last year some growers were able to receive above the magical 70 cents/pound once basis, premiums, and LDPs were included. If growers keep a close eye on the market now (or even contract now), 70 cents is well within reach (unless mother nature says otherwise).
Last week the Georgia Cotton Commission (GCC) Board of Directors approved the Commission’s budget for Fiscal Year 2017. GCC operates on the same fiscal year as the state of Georgia which starts July 1. GCC is not a state agency, nor are any other commissions, but by law the Georgia Department of Agriculture has administrative responsibilities for most of the commissions and therefore we operate on the same July 1 fiscal year as the state. I think this confuses some people, but the bottom line is that the commodity commissions in Georgia do not receive any taxpayer funding; commissions are wholly funded by the producer checkoff for that commodity. In Georgia, cotton producers pay $1 per bale to support the Georgia Cotton Commission.
The GCC budget for fiscal year 2017 continues many of the same programs such as funding just over $600,000 for cotton research projects and GCC’s continued support of educational programs such as FFA, 4-H, Georgia Young Farmers Association, and several other important organizations. Also included in the budget is continued support for the National Cotton Council and Southern Cotton Growers, thereby making every cotton farmer in Georgia a member of both the National Cotton Council and Southern Cotton Growers.
Yesterday the USDA released its June acreage report. Surprisingly GA was up about 100,000 acres more than we predicted. The March USDA planting intentions report had GA cotton at 1.15 million acres, but due to lack of seed supply in soybeans, most folks knew that the soybean number would be down and the cotton number up. Seems like USDA has had a hard time pegging the peanut number (pun intended) as the March numbers suggested GA peanuts at 730,000 and the actual plantings in June at 765,000, which is close to last year’s 785,000. Corn increased 70,000 from last year up to 400,000 acres in 2016. Soybeans surprisingly were higher than we expected at 265,000. Most rumors around the state suggested that there was only 1/3 of the supply of SE soybean varieties this year compared to last year. Below is a chart of 2014 and 2015 planted acres for major GA crops along with the 2016 estimate in March and the 2016 June planted acre number from USDA.
|GEORGIA PLANTED ACRES
||March ’16 est.
|| ’15-’16 change
|Source; USDA NASS Southern Region June Acreage Report, June 2016