PCG EMAIL SERVICES: BLOGS.WSJ.COM - Cotton Farmers Not Changing Plans Despite Farm Bill Uncertainty
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Thu Jan 9 17:46:31 CST 2014
BLOGS.WSJ.COM - Cotton Farmers Not Changing Plans Despite Farm Bill Uncertainty
By Alexandra Wexler
6:51 pm, Jan 7, 2014
NEW ORLEANS—As the U.S. farm bill continues to languish in Congress, many large cotton growers say their plans for the upcoming planting season remain unchanged.
If the farm bill– legislation that sets federal farm policy for the next five years– passes, direct payments to growers of row crops like cotton, corn and wheat would likely be scrapped. Eliminating the direct-payment program, in which the government gives money to farmers regardless of crop prices, is a point of accord among both Democrats and Republicans in both the House and Senate.
Direct payments would be replaced with a more comprehensive crop insurance program for farmers in the new farm bill.
But “it’s not as good as what we had,” said Frank DeStefano, a Mumford, Texas-based farmer who grows about 2000 acres of cotton. “It will affect my business, but it won’t change my plan” for growing cotton this year, he said.
Other farmers echoed that sentiment. The changes to the farm bill “will not affect me at all, what we’re going to grow this year,” said Clyde Sharp, a farmer who plans to start planting about 2500 acres of cotton in Roll, Ariz. around March 1.
The only substantive remaining question is whether the federal marketing loans for cotton growers will be set at 45 cents or 47 cents a pound, said Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M University, who is working with Congressional staff on the cotton portion of the farm bill.
Those loans also provide a safety net for farmers, because if prices fall below the loan rate, farmers who have taken out loans can pay the government back at that price and pocket the difference, thus guaranteeing growers a minimum price.
But “the world would end before we get to those (price) levels probably,” Mr. Outlaw said.
Cotton for March delivery on the ICE Futures U.S. exchange settled Tuesday at 84.60 cents a pound.
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