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Cotton Council board updated on key activities

Cotton Council board updated on key activities

The National Cotton Council has played an active role in contacts with the Administration and Congressional leaders and in combined communications with other agricultural groups to express strong opposition to any deficit reduction package containing disproportionate reductions for agriculture.

National Cotton Council officers and directors, along with other industry leaders attending the NCC’s mid-year board meeting in Santa Fe, N.M., were updated on key issues and upcoming challenges and opportunities facing the industry.

After reviewing the NCC’s major activities of 2011, NCC Chairman Charles Parker stated that throughout the federal budget process, the NCC has played an active role in contacts with the Administration and Congressional leaders and in combined communications with other agricultural groups to express strong opposition to any deficit reduction package containing disproportionate reductions for agriculture.

“We also have emphasized the need for adequate funding to craft a balanced farm bill and for the Agriculture Committees to make those policy decisions,” Parker said.

“Now, under the terms of the deficit reduction agreement, we face the very real possibility of effectively establishing the provisions for the next farm bill in the coming weeks.

“Thankfully, the Council’s Farm Policy Task Force was re-established in December 2009, which was well in advance of the normal timeline for the development of the 2012 farm bill.”

Parker told attendees the Task Force has been meeting regularly “to review budget constraints, political pressures for program changes, and the potential impacts of the World Trade Organization dispute with Brazil.

“While the central goal of the Task Force has remained the same — to maintain an effective safety net for US cotton — it instructed staff to continue to develop and review models that assist with the analysis of various policy options as well as alternative programs and delivery systems.”

He noted that the NCC’s Farm Policy Task Force had met just prior to the mid-year meeting’s open session to weigh the various farm program options in light of the current budget and political situation and the potential timetable for decision making.

John Maguire, the NCC’s senior vice-president, Washington operations, updated directors on environmental and trade issues as well as the budget and appropriations status, including key upcoming dates involved in the Budget Control Act of 2011’s enactment.

Weakness in demand

Gary Adams, the NCC’s vice-president, Economics & Policy Analysis, told attendees in his economic update that the current cotton market is focused on recent weakness in demand as polyester poses strong competition.

In addition, declines in yarn prices have left some textile mills with stocks of uncompetitive cotton yarn spun at higher cotton prices.

For US production, Adams said the 2011 crop will be smaller due to extreme drought in the Southwest, while U.S. stocks will remain tight globally as international production is expected to reach a new record.

He noted that key policy decisions on China’s stocks and India’s exports also will affect the market with the key question being — when will demand recover.

In his update on the Vision 21 stakeholder report, NCC President/CEO Mark Lange reviewed the project’s study results/progress and future efforts resulting from its three strategic study areas: 1) analysis of the demographic and structural facets, with underlying sources of change, in the Asian consumer apparel and textile product markets, with a subcomponent project to study the “Impact of Seven Revolutions on Cotton Products”; 2) “sustainability” and environmental aspects of U.S. cotton production, storage, transport, textile processing, apparel manufacturing and consumer handling to include complete life-cycle environmental and energy analyses for typical polyester and cotton consumer products, including consumer handling and disposal, and; 3) logistical issues affecting raw cotton flow from the gin bale press through warehousing to the spinning mill.

Staff from Cotton Council International (CCI), Cotton Incorporated and the NCC, all to varying degrees, managed the three areas of study.

Lange said the project’s final effort will be communication, in the widest possible manner, of the findings/analysis to the U.S. cotton industry and affiliated interests.

The Cotton Foundation project was initiated in late 2008 with financial support provided by Monsanto and with additional financial support provided by John Deere.

CCI President John Mitchell reported that CCI was again the largest recipient of combined Foreign Market Development and Market Access Program allocations.

“We need to remain confident that the private-sector/public-sector partnership that has endured for 56 years and has proven to be a huge success in US agricultural export growth will continue in some form — and we need to work toward ensuring its continuation,” he said.

“In this tight budget environment, nothing can be taken for granted ... as we export virtually all of our U.S. cotton as either fiber, yarn or fabric.” He noted that NCC and other organizations continue to make the case in the House and the Senate that these export promotion programs are every bit as important today as they were 56 years ago, that they are WTO compliant, and that they are a major contributor to US agricultural export success.

In addition to the usual advertising and promotions, trade fairs and teams, Mitchell reported that CCI and Cotton Incorporated will host the biennial COTTON USA Orientation Tour to the U.S. Cotton Belt, will host, along with NCC, a Chinese Leadership Team, and will send a U.S. cotton industry executive delegation to Indonesia, Vietnam and Bangladesh.

Other activities include supply chain marketing conferences in Prague, Istanbul and Singapore, and work with U.S. yarn and fabric manufacturers to convince Latin American and Korean garment manufacturers to specify US yarn and fabric.

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