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Going With The Flow

06-14CFcvrWith timely shipments important to satisfying U.S. cotton’s domestic and international customers, the National Cotton Council is taking steps to improve U.S. raw cotton flow.

How is this being done?
The NCC is working to ensure that U.S. cotton warehouses understand why compliance with the minimum shipping standard in the USDA Commodity Credit Corporation’s Cotton Storage Agreement is vital to the cotton industry’s health. The NCC’s Board of Directors earlier this year approved a NCC Cotton Flow Committee recommendation that will give USDA the ability to see shipping order scheduling exchanges between merchants and warehouses. This will happen through a modification of EWR’s existing Shipping Order Update (SOU) function. Basically, EWR, Inc.’s enhanced SOU function will allow USDA to review an audit trail of requested shipping dates, compared to the warehouse’s weekly reported shipped and bales made available for shipment data. The goal is to ensure full compliance with the minimum shipping standard by all warehouses. Efforts by the two major cotton warehouse associations, the Cotton Growers Warehouse Association and the Cotton Warehouse Association of America, were the impetus for this initiative.

What is the project timetable?
As part of this initiative, the NCC Board agreed to provide funding for necessary software development by EWR, Inc. This was scheduled for testing and industry use by the end of May 2014. The goal is to have the initiative’s audit feature fully functioning for new cotton crop deliveries at the start of 2014-15 marketing year.
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Warehouses should be aware that shippers’ emailed load date requests will become part of a permanent record and that all requested/scheduled dates for SOUs may be seen by USDA warehouse examiners. Having access to all recorded SOUs transmitted by shippers and warehousemen is an important tool for USDA examiners when determining if a warehouse is complying with the minimum shipping standard. Shipping below this standard may be normal for most report weeks. However, warehouses should be prepared to defend shipping activity below the standard, particularly in periods when shipping is heavy and SOU requested load dates are available for review.

How is the industry being made aware?
Certified interest organizations representing cotton shippers, marketing cooperatives, warehousemen and ginners were asked to share with their members a NCC bulletin about the SOU project and its implementation. The NCC Board also directed NCC staff to develop educational materials that provide background information on the initiative and summarize the procedures that should be consistently employed by all affected parties.

This project is consistent with NCC policy that urges “⁄ all segments to work together toward the goal of producing a universal format for voluntary, private-sector shipment scheduling and reporting ⁄‰ For cotton producers, bale storage and shipping (flow) is most definitely a pocketbook issue. That’s because cotton that is positioned to be shipped in a timely fashion realizes more value.

Mark Lange is the president and chief executive officer for the National Cotton Council of America. He and other NCC leaders contribute columns on this Cotton Farming page.