USDA Expands CFAP – ELS Cotton Left Out

You would be hard pressed to say that any other commodity has been hit as hard as cotton as a result of the COVID-19 pandemic.  Prices have dropped, shipments have essentially stopped, and the stores selling ELS cotton products have closed and some have even gone out of business.  But apparently, USDA does not agree.  Yesterday, USDA expanded the Coronavirus Food Assistance Program (CFAP) to include 59 additional commodities and livestock, ranging from bok choy, dill, and kohlrabi, to largemouth bass and cut flowers.  But they failed to include ELS cotton, which has not only experienced a reduction in price, but almost a complete shutdown in terms of the sale and movement of ELS cotton.   With mills shut down across the globe and retail outlets closed and filing for bankruptcy, ELS cotton is suffering like never before. The cotton industry submitted price information in response to the May 22nd, Federal Register notice requesting additional information for those commodities that were left out of the first round of CFAP funding.  In response to that submittal, USDA claimed that the industry only provided export prices, whichUSDA believes does not reflect grower prices.  ELS cotton does not have a futures price, and is only determined through a contractual agreement between the seller and the buyer.  Export prices were the only prices that could be used.  President/CEO Roger Isom stated “The failure by USDA to recognize the devastating impact COVID-19 has had on the ELS cotton industry is mind numbing.  Our prices have dropped and cotton is not moving.”  The ELS cotton industry and the Association is now turning its attention to Congress to see what relief may come in the next COVID-19 aid package.