AMS No. 051-09

Sam Jones (202)720-8998

Billy Cox (202)720-8998

WASHINGTON, March 26, 2009 – The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) announced today that fees charged to cotton producers for classification services will increase slightly in 2009. The fee will increase 20 cents from the previous fee of $2.00 per bale. This fee will be applicable for the entire 2009 U.S. cotton crop. The $2.20 per bale fee proposed for 2009 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 five cents per bale.

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 2009 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 2009 harvest is projected to decrease slightly from 2008 and be dramatically reduced from the most recent three large cotton crops harvested in 2005, 2006 and 2007. This decrease is due to reduced planting across the Cotton Belt. Competition from higher priced commodities and less demand for cotton worldwide are considered responsible for the decreased cotton acreage. A large proportion of AMS costs for the service are fixed in permanent facilities, equipment, and personnel, and when the cotton production estimate dips significantly, the annual fee adjustment results in a higher fee.

Details of the fees were published today in the March 26, 2009, Federal Register. Comments must be received on or before April 10, 2009. 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.