Texas Agriculture May 20, 2016 : Page 8

China cotton sale affecting prices worldwide By Jessica Domel and Tom Nicolette For weeks, all eyes have been on China as the country—once the largest consumer of cotton—slowly unloads its vast reserves of the fiber on the world market. China began selling parts of its 11 million metric ton reserves the first week of May—limiting sales to 30,000 metric tons per day. “Through the sixth day, they’ve sold about 180,000 metric tons or 827,000 bales and most of that is the port of reserve. That’s made about 72 percent of the total,” H.W. “Kip” Butts, senior cotton analyst with Informa Economics, said in a confer-ence call. Cotton prices that week started in a slump, according to Dow Jones Business News. The outlet reports “cotton for July delivery dropped .8 percent to end at 61.33 cents per pound on ICE Fu-tures U.S. exchange, the lowest close since April 15.” “When import cotton starts to give way, as far as the percentage of the amount being sold, you can expect these sales to kind of drop off a bit— maybe not dramatically so, depend-ing on what the mills can utilize and how they can mix it,” Butts said. The sale of China’s reserves is ex-pected to reduce China’s dependence on raw cotton imports, which could affect cotton-producing countries, according to Butts. “The expectation is that with them using a bit more of their do-mestic cotton, they won’t import as much raw cotton or cotton yarn,” Butts said. Long-term, Butts does not expect the sale of China’s cotton reserve to “crash-and-burn” the U.S. and world cotton market, but it is having an impact. “It’s not going to be a favorable en-vironment for higher prices, particu-larly given the continued competition from polyester. That’s going to be dif-ficult for this market to go higher in the current environment given that the polyester prices are not really giving us much help,” Butts said. Dow Jones Business News reports U.S. sales of cotton abroad are not keeping up with U.S. Department of Agriculture (USDA) expectations. Sales are at 88 percent of the USDA forecast. According to USDA, 16 percent of the 2016 cotton crop is already in the ground thanks to favorable weather. Farmers across most of Texas al-ready have their crop in the ground. Farm Bureau survey: Farmers want to control their own data Farmers and ranchers want to con-trol the information their equipment collects every time it passes through a field, a recent survey by the Ameri-can Farm Bureau Federation (AFBF) shows. Farmers also believe that cre-ating a cooperative-style central re-pository for their data is the best way to enhance its security and maximize its value. AFBF is a founding member of the Ag Data Coalition (ADC), an organi-zation created by several leading ag-ricultural groups and companies to help farmers better store and man-age their information in a central location. The ADC will establish a co-op-style repository for agricultural data, with farmers having a govern-ing role over the group. AFBF President Zippy Duvall said survey findings showed that 71 per-cent of respondents said they are in-terested in having access to the kind of data bank that ADC is developing, while 82 percent say it is important that farmers have a voice in the ag data co-op. Survey respondents also ranked vendor transparency high among their priorities. Farm Bureau and other groups recently introduced a tool, the Ag Data Transparency Eval-uator, to explain in plain English the convoluted details often found in data contracts with agricultural hardware and software providers. The survey, meanwhile, revealed a high level of misunderstanding among respondents regarding data details in their contracts. When required approval of the grower, only 32 percent said they did. Fifty-four percent were unsure and 14 percent said prior approval from a grower was not required for data sharing. “This indicates a higher level of clarity and trans-parency is needed to secure grower confi-dence,” Duvall said. The survey also revealed other is-sues that must be addressed to help promote farmer ac-ceptance, noting the following: • Seventy-seven percent are con-cerned about which entities can access their farm data and whether it could be used for regula-tory purposes; • Sixty-seven percent said they will consider how outside parties use and treat their data when deciding which technology or service provider to use; • Sixty-six percent believe farm-ers should share in the potential fi-nancial benefits from the use of their data beyond the direct value they may realize on their farm; • Sixty-one percent are worried that companies could use their data to influence market decisions; and • Fifty-nine percent were confused whether current agreements or con-tracts allowed technology or service providers to use their data to market other services, equipment or inputs back to them. This year’s poll follows a 2014 sur-vey that led to the development and publication of a set of Thirteen Prin-ciples on Data Privacy and Security that same year. Thirty-eight differ-ent agricultural companies and farm groups have signed on to the princi-ples, to date. Since then, Duvall said Farm Bu-reau has focused its efforts on “bring-ing life” to the principles. Farm Bu-reau’s work to date has primarily centered on three major projects: • Creation of the Ag Data Trans-parency Evaluator; • Development of a cooperative data repository by the Ag Data Coali-tion; and • Additional education for farmers and ranchers on issues pertaining to data technology. The new ag data survey of about 400 farmers and ranchers was con-ducted from January through April 2016. Additional highlights can be found at http://www.fb.org/tmp/up-loads/BigDataSurveyHighlights.pdf. M AY 20 , 2016 8 asked whether they knew if their contracts indicated they owned or controlled their own data, 55 per-cent of those surveyed said they did not know. Twelve percent said the contracts did not indicate control or ownership, and only 33 percent said their contracts specifically indicated that growers owned or controlled the data they generate. When asked whether contract de-tails about sharing data with a third party, business partner or affiliate

China Cotton Sale Affecting Prices Worldwide

Jessica Domel and Tom Nicolette

For weeks, all eyes have been on China as the country—once the largest consumer of cotton—slowly unloads its vast reserves of the fiber on the world market.

China began selling parts of its 11 million metric ton reserves the first week of May—limiting sales to 30,000 metric tons per day.

“Through the sixth day, they’ve sold about 180,000 metric tons or 827,000 bales and most of that is the port of reserve. That’s made about 72 percent of the total,” H.W. “Kip” Butts, senior cotton analyst with Informa Economics, said in a conference call.

Cotton prices that week started in a slump, according to Dow Jones Business News.

The outlet reports “cotton for July delivery dropped .8 percent to end at 61.33 cents per pound on ICE Futures U.S. exchange, the lowest close since April 15.”

“When import cotton starts to give way, as far as the percentage of the amount being sold, you can expect these sales to kind of drop off a bit—maybe not dramatically so, depending on what the mills can utilize and how they can mix it,” Butts said.

The sale of China’s reserves is expected to reduce China’s dependence on raw cotton imports, which could affect cotton-producing countries, according to Butts.

“The expectation is that with them using a bit more of their domestic cotton, they won’t import as much raw cotton or cotton yarn,” Butts said.

Long-term, Butts does not expect the sale of China’s cotton reserve to “crash-and-burn” the U.S. and world cotton market, but it is having an impact.

“It’s not going to be a favorable environment for higher prices, particularly given the continued competition from polyester. That’s going to be difficult for this market to go higher in the current environment given that the polyester prices are not really giving us much help,” Butts said.

Dow Jones Business News reports U.S. sales of cotton abroad are not keeping up with U.S. Department of Agriculture (USDA) expectations. Sales are at 88 percent of the USDA forecast.

According to USDA, 16 percent of the 2016 cotton crop is already in the ground thanks to favorable weather. Farmers across most of Texas already have their crop in the ground.

Read the full article at http://texasagriculture.texasfarmbureau.org/article/China+Cotton+Sale+Affecting+Prices+Worldwide/2485159/302841/article.html.

Farm Bureau Survey: Farmers Want to Control Their Own Data

Farmers and ranchers want to control the information their equipment collects every time it passes through a field, a recent survey by the American Farm Bureau Federation (AFBF) shows. Farmers also believe that creating a cooperative-style central repository for their data is the best way to enhance its security and maximize its value.

AFBF is a founding member of the Ag Data Coalition (ADC), an organization created by several leading agricultural groups and companies to help farmers better store and manage their information in a central location. The ADC will establish a coop-style repository for agricultural data, with farmers having a governing role over the group.

AFBF President Zippy Duvall said survey findings showed that 71 percent of respondents said they are interested in having access to the kind of data bank that ADC is developing, while 82 percent say it is important that farmers have a voice in the ag data co-op.

Survey respondents also ranked vendor transparency high among their priorities. Farm Bureau and other groups recently introduced a tool, the Ag Data Transparency Evaluator, to explain in plain English the convoluted details often found in data contracts with agricultural hardware and software providers.

The survey, meanwhile, revealed a high level of misunderstanding among respondents regarding data details in their contracts. When asked whether they knew if their contracts indicated they owned or controlled their own data, 55 percent of those surveyed said they did not know. Twelve percent said the contracts did not indicate control or ownership, and only 33 percent said their contracts specifically indicated that growers owned or controlled the data they generate.

When asked whether contract details about sharing data with a third party, business partner or affiliate required approval of the grower, only 32 percent said they did. Fifty-four percent were unsure and 14 percent said prior approval from a grower was not required for data sharing.

“This indicates a higher level of clarity and transparency is needed to secure grower confidence,” Duvall said. The survey also revealed other issues that must be addressed to help promote farmer acceptance, noting the following:

• Seventy-seven percent are concerned about which entities can access their farm data and whether it could be used for regulatory purposes;

• Sixty-seven percent said they will consider how outside parties use and treat their data when deciding which technology or service provider to use;

• Sixty-six percent believe farmers should share in the potential financial benefits from the use of their data beyond the direct value they may realize on their farm;

• Sixty-one percent are worried that companies could use their data to influence market decisions; and

• Fifty-nine percent were confused whether current agreements or contracts allowed technology or service providers to use their data to market other services, equipment or inputs back to them.

This year’s poll follows a 2014 survey that led to the development and publication of a set of Thirteen Principles on Data Privacy and Security that same year. Thirty-eight different agricultural companies and farm groups have signed on to the principles, to date.

Since then, Duvall said Farm Bureau has focused its efforts on “bringing life” to the principles. Farm Bureau’s work to date has primarily centered on three major projects:

• Creation of the Ag Data Transparency Evaluator;

• Development of a cooperative data repository by the Ag Data Coalition; and

• Additional education for farmers and ranchers on issues pertaining to data technology.

The new ag data survey of about 400 farmers and ranchers was conducted from January through April 2016. Additional highlights can be found at http://www.fb.org/tmp/uploads/BigDataSurveyHighlights.pdf.

Read the full article at http://texasagriculture.texasfarmbureau.org/article/Farm+Bureau+Survey%3A+Farmers+Want+to+Control+Their+Own+Data/2485166/302841/article.html.

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