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In Mid-South: Ginners oppose moisture regulations

Hastily-developed regulations regarding restoration of moisture to cotton bales during the ginning process “would do very little to preserve quality” and would be impractical to enforce, the Southern Cotton Ginners Association contends.

The association, which represents some 260 gins in the five Mid-South states, approved a policy position recommendation on the issue at its summer conference at Hot Springs, Ark.

The statement came as the USDA is considering a proposed rule on storage, handling, and ginning requirements for cotton marketing assistance loan collateral. The proposed rule would bring many changes in the way loan-eligible cotton is stored, ginned, and maintained, the National Cotton Council said in comments filed with the USDA, and would also affect loan eligibility of cotton and the ability of U.S. cotton warehouses to provide efficient, effective service.

“We don't want to lose any available technology that, if properly managed, can produce quality cotton, and we oppose any regulation that would target for elimination moisture restoration systems in gins,” the SCGA statement says.

Acknowledging that “any cotton quality issues in today's market should be treated seriously and deserving of prompt and appropriate action” and that “industry input and the marketplace are key to both monitoring and resolving most cotton quality issues,” the statement says, “We will take cotton quality issues seriously and increase the emphasis on moisture management in our educational programs and in the marketplace.

“We see no need for regulations that are not based on sound scientific data and that do not include the existence and availability of affordable, accurate, and consistent measurement of moisture at the gin.

“To promulgate regulations based on one crop year, while moisture systems have been widely used for several decades on a significant percentage of the crop, would be unjustified,” the statement says.

The association also opposes the section in the proposed rule providing for ginner certification. The USDA proposal provides that in order for a bale of cotton to be loan eligible, the ginner must make additional certifications to the Commodity Credit Corporation that the cotton meets the general condition and quality requirements applicable to loan cotton.

The requirements, the National Cotton Council statement notes, “are not explicitly stated, but include requirements that the cotton not be false-packed, water-packed, mixed-packed, reginned or repacked, that the cotton be in good condition, not be compressed to universal density at a warehouse where side pressure has been applied, weigh at least 325 pounds, and be packaged in materials that meet specifications adopted by the Joint Cotton Industry Bale Packaging Committee.”

The proposed rule, the council says, “fails to adequately address issues related to excessive moisture, fails to enhance protection for CCC loan collateral, and offers little, if any, reassurance to purchasers of U.S. cotton. Worse, the USDA has delayed taking action on this critical issue to the point that it would be difficult to implement meaningful, effective action with respect to the 2006 crop.”

The SCGA statement says, “We know our industry has, and will, take appropriate action to address excess moisture and other quality issues that would affect the value or marketability of our cotton.

“But the recent approach taken on this issue has been perceived as one of hastily developing regulations that are not reflective of the overall ginning industry, are not practical to enforce, and do very little to preserve quality.

“Additionally, the proposed language could create liabilities for the ginner in normal moisture variation due to environmental conditions and moisture measurements for which reliable instrumentation is not available.”

The statement concludes, “We are committed to cotton quality and, in particular, bale moisture. We will continue to address any quality issues and welcome the opportunity to work with cotton industry organizations and the USDA to address concerns as they arise.”

Craig Brown, vice president of producer affairs for the National Cotton Council, in remarks at the joint meeting of the Delta Council's Ginning and Cotton Quality Improvement Committee and the Southern Cotton Ginners Association at Stoneville, Miss., said the U.S. cotton industry “has been concerned for some time about excess moisture in baled cotton lint.”

In June 2002, the NCC board asked for a review of research data regarding the relationship of bale moisture and quality.

While moisture addition at the lint slide has been a practice by some gins for many years, the council noted, the NCC board's “concern was heightened by recent aggressive marketing of moisture restoration systems…and a popular trade magazine article which claimed moisture addition as being beneficial to fiber quality measurements and processing.”

The board directed NCC staff to work with public research agencies and others to further assess the relationship between moisture addition and baled lint cotton quality.

Research on bale moisture has provided evidence, the council noted, that “long term color changes of baled lint can begin to appear at moisture levels approaching 8 percent.”

Based on research findings, the industry's Cotton Quality Task Force adopted a resolution recommending that “moisture levels of cotton bales at the gin not exceed a targeted level of approximately 7.5 percent.”

That later was revised to recognize “widely divergent climactic conditions through the Cotton Belt,” recommending that moisture at the gin should not exceed 7.5 percent except in the West, where further research was needed to establish acceptable levels.

In January 2006, the Quality Task Force heard reports that at least two warehouse locations in Missouri had “significant numbers of bales with quality degradation due to high levels of moisture…and that additional discoveries were probable.”

The council adopted policy calling for “more aggressive communications by ginner associations, advising of fiber quality degradation risk due to excessive moisture addition — paying particular attention to liquid spray systems.

In a Jan. 27 meeting in the Southeast, Teresa Lasseter, USDA Farm Service Agency administrator, reported on the water-packed bales at Mid-South warehouse locations and characterized it as “a very serious situation” that she and her staff had been directed to address.

In February, USDA/FSA issued a Notice to the Trade that the Commodity Credit Corporation “does not consider water-packed or false-packed cotton bales to be eligible for marketing assistance loans.”

During briefings for selected congressional staff in February, USDA officials indicated the scope of the problem could be much wider than two gins and data from moisture testing inferred that as many as 200,000 bales in the three warehouses could be water packed.

In subsequent NCC/industry meetings, USDA officials indicated the agency would take prompt action on the excessive bale moisture issue.

The National Cotton Ginners Association executive committee met with USDA officials and conveyed the association's position that (1) the U.S. ginning industry recognizes “that this is a serious issue that threatens the quality reputation of U.S. cotton;” (2) that the industry, “if given the time and allowed to handle this internally, can police the issue without burdensome regulation,” and (3) asked that the association be given the opportunity to work closely with the FSA to eliminate the potential for future risk of problems with wet bales.”

The USDA responded with concern “of a wider problem, based on bale inspections at the three Mid-South warehouses,” noted that the agency was working under “a very tight timeline to act” in order to have a rule in place before the 2006 ginning season, and that any cotton industry meetings with USDA would have to be concluded within a two- to three-weeks “window of opportunity.”

The NCC appointed a Bale Moisture Task Force, headed by Mississippi producer/ginner Kenneth Hood, to work on the issue. Following subsequent inspections of the warehouse locations, industry meetings, and discussions with the USDA, the task force reiterated the council's previous recommendations regarding prevention of excessive moisture in bales:

  • For 2008 and subsequent crops, cotton lint exposed to direct liquid water spray restoration systems at the gin lint slide should not be eligible for marketing assistance loans.

  • Effective for the 2006 and 2007 crops, do not deny loan eligibility per se of cotton lint exposed to liquid water spray restoration systems. However, if such a system is used by a gin, the burden of proof that bales processed by that gin operation are loan eligible would shift to that gin.

In such a determination, the gin would (1) register with FSA, certifying that it is using such a system, (2) maintain records of the moisture content of each and every bale it processes, with each bale being tagged with either a generic tag certifying that the bale is 7.5 percent or less moisture, wet basis, as measured at the gin, or a tag with the actual moisture content noted, if the moisture measured at any location in the bale at the gin is above 7.5 percent moisture content, wet basis.

The gin would agree to notify the FSA and the producer of any bale determined to have a moisture content, measured at any location in the bale, exceeding 7.5 percent, wet basis.

In all measurements, there would be an error range of plus or minus 1 percent to allow for meter error.

Bales processed at such gins and found to exceed 7.5 percent wet basis at any location in the bale, measured at the gin, would be ineligible for the marketing assistance loan program.

Bales processed and tagged would be subject to moisture checks by the receiving warehouse during storage, using commercially-available hand-held devices, and those exceeding the moisture level specified in the relevant section of the rule, would be ineligible for the marketing assistance loan.

Those exceeding 8 percent, wet basis, would be deemed “water packed” and ineligible for the marketing assistance loan, “with more intense scrutiny” by the warehouse of all other bales processed by that gin.

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