The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) has announced that fees charged to cotton producers for classification services will remain the same as in 2009.
The $2.20 per bale fee established for the previous crop is sufficient to recover the estimated costs of providing the services as required by section 14201 of the Food, Conservation, and Energy Act of 2008, commonly known as the 2008 farm bill (Pub. L. 110-234). As in previous years, cotton classification fees for cotton collected by sampling agents will be discounted 5 cents per bale. This fee will be applicable for the entire 2010 U.S. cotton crop.
The cotton classing fees are calculated by a new method mandated in the 2008 farm bill, and the annual adjustment of the fee is also required by the legislation. Elements of the cost factors used to determine the 2010 user fee include salaries, costs of equipment and supplies, and other overhead costs, such as facility costs and costs for administration and supervision.
Estimated production of cotton from the 2010 harvest is projected to increase 10-20 percent from the previous two years, based upon plantings intentions surveys. Market conditions favor the increased planting of cotton in 2010, as the supply of cotton on the world market has diminished and demand is stronger. A large proportion of AMS costs for the service are fixed in permanent facilities, equipment, and personnel, and when the cotton production increases significantly, AMS’ unit costs for providing classing services are lower.
Details of the fees were published in the April 27, 2010, Federal Register. Comments must be received on or before May 12, 2010. Copies are available from Darryl Earnest, Deputy Administrator, Cotton and Tobacco Programs, AMS, USDA, Stop 0224, Room 2641-S, 1400 Independence Ave., SW, Washington, D.C. 20250-0224, Tel (202) 720-3193, and can be found at www.ams.usda.gov/cotton/rulemaking.htm .