USDA’s Farm Service Agency has issued rules allowing temporary outside yard storage for 2005-crop upland cotton in a limited number of West Texas, New Mexico, Oklahoma, and Kansas counties.
The announcement comes after months of work at both national and regional levels by Plains Cotton Growers, American Cotton Producers and High Plains warehouse representatives who recognized early on that the size of the 2005-crop was going to outstrip the available commercial storage space in these regions.
The main focus of PCG's effort was to make sure that Commodity Credit Corporation loan eligibility was not compromised on bales forced into temporary outside storage locations due to a lack of available inside storage space.
"For cotton producers on the Texas High Plains and the rest of the Southwest production region, USDA's decision to allow temporary outside storage of 2005 crop loan cotton is welcome news," says PCG Executive Vice President Steve Verett.
Verett added, "We are extremely grateful for the efforts put forth by USDA to develop a solution that protects the loan eligibility of cotton producers and provides options for cotton warehouse operators dealing with the logistical challenge of handling, storing and shipping a phenomenal 2005 crop."
To store cotton outdoors warehouse operators must request the temporary use of outside storage space for 2005-crop loan cotton and comply with the guidelines for outside storage approved by CCC.
The USDA notice (BCD-117) detailing the temporary storage rules outlines specific guidelines to protect interest holders in the cotton, time limits to encourage the movement of cotton to indoor storage and reporting requirements.
The reporting requirements are designed to allow USDA to keep track of how many bales of loan cotton are in outside storage and also to insure that individuals with legitimate ownership positions on outside stored cotton have the ability to identify which bales are in outside storage locations.
To ensure that the outside storage option remains temporary, CCC has limited the duration of the outside storage waiver to the earlier of 90 days from the original date of storage or April 1, 2006 for each bale of CCC loan cotton stored outdoors.
Ultimately the length of an extended 2005 ginning season and the ability of the industry to keep cotton moving will determine if the April 1 deadline will be adequate.
"We must recognize that there are a number of factors that could still cause the April 1 deadline to become problematic," notes Verett.
"PCG is committed to working closely with both USDA and High Plains warehouse leaders to monitor the situation in the weeks leading up to the current deadline and will work to secure any additional relief that might become necessary," says Verett.
Shawn Wade writes for Plains Cotton Growers Inc. e-mail: [email protected]