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Feb. 25, 1997

Gas price causing feverish activity

Staff Writer
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Changes in the market cause natural gas prices to go up and down. Last
month prices were high. This month they dropped back. But the future
looks promising, devlopers say, and activity in the oil patch has been
feverish the past few months.

Enron completed the China Lake 205-2 near Barstow and is producing 1.5
Mcf per day on 1,500 psi flowing tubing pressure.

The 16,867-foot Fusselman follows a longtime producer in that area.

Two other gas wells are undergoing completion in Ward County, said
Hardy Davis for the company.

Iceburg #1 is a 5,125-foot Delaware completion that has started

Wristen Bro. $101 is a 6,225-foot Devonion test well. At last report,
Davis said the company was installing production equipment to test the
well further.

To the west, several locations in Culberson County are in various
states of completion.

A horizontal shaft in Geraldine South field promises possible big pay
for Llano Land & Exploration of Roswell, N.M.

However, Jerry Herrington said Llano is retaining information
confidential at this time.

Other Culberson wells near the Reeves County line include a deeper pool
wildcat drilled by Conoco Inc., 1 China Draw, seven miles northwest of
Orla near oil production in the Geraldine field.

Remuda Operating sank a deeper pool wildcat 11 miles west of Orla,
named 1 TXL `19.'

Strata Production set a development redrill for 1 Shoshone, a
4,065-foot gas producer completed in 1993.

Reeves County's "drilling progress" pages in the Petroleum Information
Midland Region report shows much activity in the Alamo and Coyanosa

Burlington Resources Oil & Gas drilled one development well in Nine
Mile Draw field 16 miles southwest of Pecos, reporting a tite hole at
14,500 feet.

A tite hole was also reported in a shallower pool wildcat drilled 25
miles southeast of Pecos in the Alamo area. "Tite" means the drill hit
rock so hard it is difficult to drill through, and drilling usually is
abandoned at that point.

A deeper pool wildcat was set for 20 miles southwest of Pecos.

Abrazas Production drilled a development workover at 24-1 Lindemann,
which was abandoned as dry in 1993.

At last report, the well was drilled go 15,157 feet and plugged back to
14,510 feet.

In the Waha field near Coyanosa, Arco Permian drilled one development
well to 17,600 feet and a development workover to 17,000 feet.

Activity was reported in the Worsham field, and several wildcat
locations were drilled in late 1996 or early 1997.

The Texas legislature this year is expected to consider bills ranging
from cutting severance taxes for enhanced oil recovery to tort reform
and water initiatives.

Tom Craddick of Midland is one sponsor of a bill that could give
producers hope for increased production that would create thousands of
jobs, add millions to the economy and generate local property tax

A similar three-year incentive in 1993 resulted in 11,000 jobs and $1.6
billion added to the economy, plus $22 billion in ad valorem taxes.

Of 50,000 inctive wells, 6,000 went back in production. Much of Texas
oil production comes from marginal wells producing about 10 barrels of
oil a day. But at time, the low price of oil and the cost of taking it
out of the ground makes it unprofitable, so the wells are plugged.

Some landowners have filed suit against oil and gas producers when they
believe the companies have caused environmental damages, like polluted
ground water.

Fresh water used for injection wells and in oil recovery efforts makes
water legislation important to producers. Water legislation is under
scrutiny to see how it would affect the oil and gas industry.

Environmental groups say

bill good step, but flawed

Associated Press Writer
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AUSTIN (AP) - Water management legislation filed on the heels of last
year's withering drought is a good step, but falls short by not curbing
Texans' virtually unfettered right to pump water from beneath their
property, the Sierra Club says.

The so-called ``right of capture'' basically allows property owners to
pump as much water as they like from under their land, regardless of how
it affects adjacent landowners.

Those who oppose changing the principle say it's a basic property
right. But Ken Kramer of the Lone Star Chapter of the Sierra Club
environmental group said Monday that argument is flawed.

``There is no protection to a property right in groundwater if your
neighbor can put in a bigger pump and a bigger well and pump out more
water than you can, and potentially ... deplete the aquifer to the point
where you can no longer draw water from it through your own well,''
Kramer said.

The bill's author, Sen. J.E. ``Buster'' Brown, has said it will be up
to local governments to decide whether to impose water use limits.

``If water districts coordinate and work together in coming up with a
plan, we will avoid a competition to see who can build the biggest water
pump on their property,'' Brown, R-Lake Jackson, said when he introduced
the measure.

On Monday, Brown said he has discussed the water legislation with the
Sierra Club and other groups and would continue to do so.

``I hope these groups are interested in continuing to work with us as
we move forward in our attempt to create the best solution for the water
needs of this state,'' he said.

Kramer said the legislation doesn't assure regulation of groundwater
withdrawal if a local groundwater district fails to act. He said
regulation by groundwater districts could be workable if there were a
strong state backup in case local districts didn't take action.

Changing the right of capture could be done through separate
legislation, Kramer said. If unable to enact a change in this
legislative session, Kramer said he'd support a study in time for the
1999 Legislature.

Lt. Gov. Bob Bullock, who presides over the Senate and supports the
water bill, said he doesn't favor changing the rule of capture at this

``I think that there's a great deal that we can do without that,'' he
said. ``Rather than getting in that kind of a controversy ... let's take
it one step at a time, make some accomplishments.''

Brown's bill, which Kramer called ``a good starting point,'' would
encourage local water districts, river authorities and municipalities to
enact drought management plans by tying state funding and permits to
enactment of such plans. It also would increase penalties on those who
pump water that doesn't rightfully belong to them.

Besides addressing the right of capture, the Sierra Club and other
groups such as the League of Women Voters suggested additional possible
changes, including:

- Consistent, statewide public participation guidelines to ensure
adequate notice and open meetings.

- Beefed-up enforcement of the implementation of conservation and
drought plans.

- A requirement that genuine economic need be established for a water
permit to be granted.

- Additional water quality protection provisions.

Ranchers hope '96 was rock bottom for market

Associated Press Writer
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CLAUDE, Texas (AP) - Brooks Gunter recognizes the hollow feeling in his
gut from a year ago.

The sensation was a harbinger of a soft market and hard times. Things
are different today, except for that uneasy sensation.

``I told a guy the other day that I'm just about as scared now as I was
a year ago,'' the Panhandle farmer and rancher said. ``A year ago it
looked so bad, and this year I'm worried because it looks so good.

``It's like they're calling out lottery numbers and I've got the first
five, and I'm scared about that sixth one.''

Unless 1997 takes an unexpected downturn, 1996 will go down as the
hardest kick in the rump roast the cattle industry has taken in a long
time. Low prices, expensive feed and searing drought-marred life on the
range for most of last year.

Whether the recent turnaround indicates a long-term market rebound
remains to be seen.

``We're watching and waiting, but the attitude is so much better now,''
said Lee Pritchard of the Crowley-based Texas Limousin Association.
``People that have been in it before have seen highs and lows come and

``A lot of people didn't make it out of this one and depleted and sold
their herds. Now, there are some signals that we are gaining.''

The price per hundredweight coming out of the feedyards has meandered
around $65 in recent weeks, far better than the below-$60 prices of last

Jim Gill, the Texas Cattle Feeders Association's market director,
doesn't see any quick fixes for the cattle market, which tends to run in
10-year cycles. Any improvement from last year is a start, though.

``We've got to get about halfway through this year, and things will
start improving then,'' Gill said. ``Right now, it's kind of
touch-and-go with cattle coming out of the feedyards. We're looking at
break-even prices, or maybe some are making just a little.''

Profit wasn't even a consideration for many ranchers last year. While
prices wallowed in $50's per hundredweight, dried up pastures couldn't
support the stock.

Producers with grass-stripped rangeland had to turn to the feedyards,
where the drought took a different toll. Thanks to terrible regional
grain production, feed prices shot up even as cattle futures bottomed

Even amidst the summertime angst, there was room for gamblers.

``People were buying feeder cattle right in the middle of that. I
couldn't believe it,'' Gill said of the time around late summer, just
before rain and price relief came to the industry. ``Those cattle that
ate some of that (high-priced grain) made more money than anyone else.''

Cattle raisers spent the lean part of '96 selling off their stocks,
further weakening a market already glutted by too many head and too
little demand. As the gluts diminish this year, the market is expected
to improve.

The market collapse also opened many eyes in the industry, Hale Center
feeder Pat Shepard said.

``We used more roughage and pasture (last year), anything to minimize
grain. That will help us in future years,'' said Shepard, who added that
sometimes it takes a little adversity to force cattlemen to find a
better way.

The market cycle doesn't adhere to precise 10-year intervals, but they
appear darn close. Cattle prices dipped in the mid-80's before rising
again this decade. Then came another crash, almost like clockwork.

``When things are good, that's when everybody's getting into the
market,'' said Pritchard of the Limousin Association, which represents
the state's third-most prominent pure breed.

The price swings are just a part of the business, and virtually anyone
involved will say the same thing: The only way to make money in the
cattle trade is to stick with it through thick and thin.

``If you're a cow-calf producer out there, you've got your land and
resources, and it's hard just to liquidate (before prices drop) because
that's your livelihood,'' Pritchard said. ``We all have short memories.
We think that when it gets good again, there won't be another poor

Rain has been the X-factor in Texas agriculture for the past three or
four years, but it's cooperated so far in 1997. Decent precipitation
this winter, plus good carryover moisture from last fall, have left
pastures green, hay bales plentiful and rural Texas optimistic.

If the ground remains moist enough to support grass and crops, and if
the cattle market holds steady, producers who survived the crash of '96
can rejoice. Or consider rejoicing, at least.

``We can kind of smile now,'' Shepard said. ``We sure can.''

Fed cattle numbers jump up from '96

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AUSTIN - Cattle and calves on feed for slaughter market in Texas
feedlots with capacity of 1,000 head or more totaled 2.52 million head
on February 1, up 2 percent from years ago. According to the monthly
report released by the Texas Agricultural Statistics Service, the
estimate was down 4 percent from the January 1 level. Producers placed
385,000 head in commercial feedlots during January, up 21 percent from a
year ago and up 7 percent from the December, 1996 total.

Texas commercial feeders marketed 470 thousand head during January, up
3 percent from a year ago. Monthly marketings were up 31 percent from
the December, 1996 total.

On February 1 there were 1.97 million head of cattle and calves on feed
in the Northern High Plains, 78 percent of the state's total. The number
on feed across the area increased 4 percent from last year but was down
4 percent from last month.

January placements in the Northern High Plains totaled 301,000 head, up
15 percent from last month. Marketings increased 35 percent from last
month to 382,000 head.

Cattle and calves on feed for slaughter market in the United States in
feedlots with a capacity of 1,000 head or more totaled 10.31 million
head on February 1, 1997. These inventory was 4 percent above February
1, 1996,

Placements in feedlots during January totaled 1.87 million, 21 percent
above 1996. During January, placements of cattle and calves weighing
less than 600 pounds were 408,000; 600-699 pounds were 652,000; 700-799
pounds were 515,000; 800 pounds and greater were 292,000. Marketings of
fed cattle during January totaled 2.02 million, 5 percent above 1996.

Feeders in the historical seven monthly states with feedlots having a
capacity of 1,000 head or more reported 8.78 million head on feed
February 1, up 6 percent from last year and 8 percent above February 1,

January placements totaled 1.64 million head, 25 percent above last
year and 1 percent above 1995. Marketings during January, at 1.74
million head, were up 7 percent from last year and 17 percent above

Houston livestock show, rodeo

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HOUSTON - In a continuing effort to inform, educate and entertain its
fans, the Houston Livestock Show and Rodeo is now available on the
Internet at

The web site is filled with news and information about every facet of
the world's largest live-stock show and richest regular-season rodeo. It
will feature daily livestock and horse show results and feature stories;
Houston rodeo results, including performance and go-around results,
average standings and all-around standings; ticket availability for each
rodeo/concert performance; schedules of daily activities; information on
the Show's $4 million-plus annual scholarship program; rodeo concert
entertainer hit singles and brief bios; sales and auction facts, records
and schedules; and history and other important facts about the Houston
Live-stock Show and Rodeo.

"The site contains a huge amount of information, but it's extremely
easy to navigate," said Dan Gattis, Houston Livestock Show and Rodeo
general manager. "Whether you're a rancher in Wyoming checking out the
Hereford Cattle Show results or a rodeo fan in Idaho, wanting to see how
the hometown cowboys are doing in the 'Dome, you'll be able to find your
information quickly. And, if you're just a curious fan, this is a fun
way to learn more about the Show."

The show also has come online with, its
pay-per-view web site. This site features details on the Houston
Livestock Show and Rodeo's three-event pay-per-view television series,
complete with Real Audio from the featured entertainers and rodeo action
video clips.

T1 Design constructed and designed both of the Houston Livestock Show
and Rodeo web sites. This Houston company specializes in cutting-edge
web sites, with a client base ranging from universities to many of the
nation's largest companies, including Compaq and The Woodlands

Milk production falls

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AUSTIN....Texas milk production totaled 542 million pounds during
January, down 2 percent from last year. The production for December,
1996 totaled 517 million pounds.

The number of milk cows during January averaged 390,000 head, down
10,000 head from last year but the same as last month. Production per
cow averaged 1,390 pounds during January compared with 1,380 for last
year and 1,325 during December, 1996.

Production in the 20 states participating in the monthly survey totaled
11.1 billion pounds, slightly below production in these same states in
January, 1996. The revised production for December, 1996 totaled 11.0
billion pounds, up 1 percent from December, 1995.

Production per cow during January averaged 1,426 pounds, 11 pounds
above a year ago. Total number of milk cows in the 20 states was 7.76
million head, 91,000 head less than last year and 10,000 head less than
December, 1996. The number of milk cows on farms was the lowest on

More cotton on less acreage in forecast

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ORLANDO - U.S. cotton producers are projected to produce 17.8 million
bales from 13.6 million planted acres in 1997, National Cotton Council
economists said today at the industry wide organization's 59th annual
meeting here.

In their annual cotton economic outlook, the economists said that the
crop will be produced on seven percent less acreage -- 13.4 million of
upland and 239,000 of extra long staple (ELS) -- than 1996. Average per
acre yield is projected at 660 pounds.

The survey revealed that while Far West cotton acreage will be
unchanged and Southeastern acreage will decline only one percent from
the previous year, Mid-South and Southwest acreage will be reduced 10.5
percent and 9.6 percent, respectively.

Dr. Kent Lanclos, a Council agricultural economist, reminded delegates
that "survey results reflect early January intentions and actual
planting will be affected by changes in alternative crop prices between
January and spring planting time."

According to the report, domestic mills are expected to use 11.2
million bales in 1997 and exports are likely to reach 6.8 million bales.
That would put ending stocks at 4 million bales, a 22.2 percent
stocks-to-use ratio. World production for 1997 is estimated to be 87
million bales and off take, 85.8 million. This would put ending stocks
at 38.2 million bales and slightly increase the world stocks-to-use
ration to 44.3 percent.

"We enter 1997 with commodity prices generally lower than they were in
the spring of 1996 and with prospects for a slightly rising raw cotton
stocks-to-use ratio to 44.3 percent.

"We enter 1997 with commodity prices generally lower than they were in
the spring of 1996 and with prospects for a slightly rising raw cotton
stocks-to-use ratio in world markets," said Council Economist Kevin
Brinkley. "Adding to the competitive intensity is an abundance of
man-made fibers, including polyester staple which is selling in many
markets around the world at prices well below the average world cotton

The report noted that even though step import quotas, a component of
the U.S. cotton program, continue to trigger on a weekly basis, foreign
cotton has not been attractively priced for U.S. delivery since last
October. It also noted that while raw cotton imports did affect old crop
('95 season) prices, a special Council study found no evidence that
imports have had an appreciable effect on new crop prices.

Nevertheless, the difficulty of shutting the import door, even when
prices are low, "is a source of great concern to producers and other
show depend exclusively on the U.S. crop for their operations," Brinkley
said. "U.S. manufacturers, on the other hand, are apprehensive about
prospects for any (cotton) program adjustment that might jeopardize
their access to competitively priced cotton."

The economists cautioned that after four consecutive years of federal
deficit reduction, the trend is expected to be reversed in 1997 and the
deficit will begin to widen. As U.S. policy makers look for ways to make
good on their pledge to balance the federal budget by 2002, agriculture
will be challenged to protect programs against further cuts.

In the meantime, Brinkley said priority must be given to reducing
production, processing and distribution costs. Priority also must be
given to market building activities as domestic retail purchases of both
cotton and manmade fiber products have fallen in the last two years
after steady gains since 1980.

The economists cited several reasons for the U.S. cotton industry to be
optimistic, though.

Cotton's market share has increased six percentage points over the past
decade due to Cotton Incorporated's promotional efforts and a strong
market oriented federal cotton program.

The world market for textile products will experience good growth in
the years ahead.. Moderate cost reductions together with promotional and
customer service activities will set U.S. cotton and its products apart
from the rank and file.

Through November, China accounted for nine percent of U.S. textile
imports compared to 11 percent in 1995, whereas Mexico and the Caribbean
Basin together provided 26 percent compared to 22 percent in 1995.

The significance of that trend is that studies indicate that
proximately 80 percent of Mexican and Caribbean textile imports into the
U.S. are constructed from U.S. raw materials. By comparison, the U.S.
cotton content of imported Asian textiles is less than 20 percent.

Cattle's Comeback-Glance

By The Associated Press
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The three factors that hurt cattle raisers for most of 1996 - low
cattle prices, high feed costs and drought - seem to have turned around
going into 1997:

CATTLE: The National Cattlemen's Beef Association estimates that total
numbers stood at 101.3 million head on Jan. 1 after peaking at 103.8
million head a year earlier. Prices at Texas feedlots that stood in the
$55 per hundredweight range last May are hovering in the mid $60's, a
break-even level for many ranchers.

FEED: A small 1995 corn crop and terrible grain production in
drought-ravaged Texas sent prices to more than $5 per bushel at times.
Better crops last year meant more supply, sending costs back down to a
manageable $4 level. Meanwhile, hay costs spike to more than $100 per
ton, compared to an average price of $69 per ton the previous three

DROUGHT: Nary a drop of rain fell on much of West Texas' rangeland and
wheat fields between October 1995 and April 1996. In its most recent
survey of the region, the Texas Agricultural Statistics Service reported
that 87 percent of Texas wheatfields are rated fair to excellent, as are
67 percent of the state's rangeland. Precipitation in West Texas is
running about 75 percent of normal, better than it's been for the past
three winters.

Futurist is key speaker at OTC awards luncheon

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RICHARDSON, TEXAS - Lester Thurow, Massachusetts Inst. of Technology
(MIT) Professor of Management and Economics, and author of The Future of
Capitalism, will be the featured speaker at the annual Awards Luncheon
during the 1997 Offshore Technology Conference at Houston's Astrodome
U.S.A. complex 5-8 May.

The Awards Luncheon, scheduled Tuesday, 6 May, honors an individual and
a company for major accomplishments in and contributions to offshore

Thurow is recognized around the world for his views and analysis of the
global economy and his optimistic look at the future of capitalism and
how it will change and why.

In his most recent book, The Future of Capitalism: How Today's Economic
Forces Shape Tomorrow's World, Thurow describes the many factors
responsible for the enormous changes occurring around the globe; changes
that are fundamentally altering the foundations of capitalism worldwide.

* The rise of man-made brain-power industries.

* Changing demographics.

* The impact of a global economy.

* The lack of a dominant world leader.

* The conversion of the communist world to capitalism.

With this knowledge, and asserting that the future holds great
opportunities for those equipped to weather the storms of change, Thurow
charts a course for survival and success in the years to come.

~The author of several widely acclaimed books, including the best
sellers The Zero-Sum Society and The Zero-Sum Solution, Thurow's
Head-to-Head: The Coming Economic Battle Among Japan, Europe and America
was a New York Times best seller for more than 6 months.

Thurow has written hundreds of journal articles and columns for The New
York Times, The Los Angeles Times, and The Wall Street Journal. Thurow
currently writes for The Boston Globe and Technology Review and appears
often on the Nightly Business Report. He has also been featured in such
well-respected forums as The Atlantic, Fortune, and CBS's 60

A staff economist for President Lyndon Johnson's Council of Economic
Advisers, Thurow has advised several Democratic presidential candidates
on public policy. He was a presidential appointee during Jimmy Carter's
administration to the U.S. Natl. Commission on Manpower Policy from 1978
to 1979.

Thurow received his PhD degree from Harvard U., which awarded him the
David A. Wells Prize in 1968. He received his undergraduate degree from
Williams College and holds an M.A. from Oxford U. where he was a Rhodes

Flowering plants linked to old, old ancestor

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COLLEGE STATION - Blades of bermuda and bunches of broccoli appear to
have little more in common than color. But a new study has found that
they - and all flowering plants in the world - stem from a common
ancestor that existed perhaps 200 million years ago.

The finding, reported in the December issue of Nature Genetics, means
that breeders who are trying to develop better plants may soon have a
much larger storehouse of genetic material to use.

"Down the road, we may be able to treat the genomes of all crops as
one," said Dr. Andrew Paterson, Texas Agricultural Experiment Station
molecular biologist and lead investigator on the project. "If we know
the function of a gene in cotton, we will be able to infer what that
gene's function in grain sorghum is."

Same goes for turfgrass, cactus, oak trees, grape vines and any of the
other 250,000 species of plants classified on Earth, according to a
United Nations report on biodiversity.

Paterson and colleagues last year were able to link the world's most
important cereal grains - rice, corn and sorghum - to a common ancestor
that grew about 65 million years ago, according to Science magazine.
That was significant, but all of those crops are from the same family -
grasses, or monocots. The new research links the grass-type plants with
the broadleafs, or dicots, to one ancestor that existed sometime between
130 million and 200 million years ago simultaneously with the dinosaurs.

"The differences among plants are relatively small compared to the
similarities," Paterson said.

The discovery comes more than a year after Paterson's group began
analyzing DNA for four plants: the Arabidopsis - a small flowering weed
that is commonly used by researchers but has no other commercial value -
broccoli, sorghum and cotton. Arabidopsis and broccoli are closely
related broadleafs, cotton is a more distant dicot (broadleaf) and
sorghum is a grass.

The researcher put DNA sequences for which the genes were already known
into a database to see if those sequences would correspond to any other
known set, then determined where those genes existed on the
fichromosomes of each plant.

"If the genes were close to one another in the Arabidopsis DNA, then we
looked to see if they also were close in the sorghum more often than we
would expect by chance," Paterson explained. The answer was repeatedly

All plants have a basic set of genes that are similar and function in
the same way, such as by fixing carbon into sugar, incorporating
nitrogen into protein and generally doing the things that "make a plant
a plant," Paterson said. This research shows that not only do the genes
function in the same ways many of them also are in the same orders along
the chromosomes.

Considering that the smallest plant genome, Arabidopsis, is estimated
to include 25,000 genes, this is very important information for
geneticists. Knowing the order of genes along the chromosome provides
researchers with a "genetic map," essentially like a roadmap, and allows
them to engineer improved crops quickly and efficiently.

"Plant breeders eventually will be able to take advantage of an
enormous body of information to assist with developing better
varieties," he said. "If we can find a gene for fiber quality affecting
the development of hairs in Arabidopsis, we know where to go look for
the corresponding gene which might improve fiber quality in cotton, for
example." Grass genes could be used in broadleaf plants as well, he said.

Change is good for producers

says Cotton Council president

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ORLANDO - The National Cotton Council will be more important than ever
to U.S. cotton's continued viability because changes the industry
experienced over the past decade are minor compared to those looming

That message was relayed by Council President Tom W. Smith to those
attending the industry wide organization's 59th annual meeting.

"The U.S. cotton industry, especially during the past 10 years, has
experienced its share of change, and the majority by far has been good,"
the Bakersfield, CA, cooperative official told delegates representing
the 17 cotton-producing states. "The National Cotton Council has been a
central figure in an environment of change and, in fact, has been the
catalyst for much of it."

Smith urged leaders from all seven industry segments to stay at the
Council table and find workable solutions to the industry's chief policy
issue and challenge. The main policy issue, he said, is whether there is
a need for change in the cotton program, particularly the 3-step
competitiveness plan, which has kept raw cotton import quotas open week
after week. Smith singled out thin profit margins at both the farm and
at the textile mill as the most pressing industry concern.

Those margins, Smith said, are "too thin at the farm to allow cotton to
compete effectively for acreage, and too thin at the textile mill to
permit higher raw material prices to be passed through in yarn and
fabric prices."

The thin margins exist at a time, Smith said, when governments around
the world have committed to reduced spending for agricultural programs.
He said that resolve is reflected in U.S. farm policy, as evidenced by
the Federal Agriculture Improvement and Reform Act of 1996, and in the
GATT and NAFTA trade agreements.

"Our industry is in the process of adjusting to a new kind of market
orientation - one which permits the marketing loan and its competitive
provisions to be continued, but one which also functions with less help
from government," Smith said. "This kind of market orientation maintains
an aggressive approach to meeting price competition, but with reduced
government spending. It therefore puts more of the price competitiveness
burden upon growers." Smith, however, foresees a bright future for U.S.
cotton. He noted that:

*the Council has a new on-line risk management tool to help guide its
members in making production and marketing decisions;

*GATT and NAFTA have fulfilled Council expectations by opening foreign
markets to U.S. products, especially textiles, and a shift of cotton
textile imports from the Far East to Mexico and Central America is
positive because a very high percentage of those products contain U.S.

*the lack of mechanization and modern production methods points to
further declines in foreign cotton production, unless large subsidies
are paid to those foreign growers;

*the U.S. cotton industry has market building programs in place to
combat the sharply expanded global production of low-cost polyester that
is taking aim at the world's fastest growing markets;

*the U.S. textile industry invested more than $20 billion the past
decade on modernization and expansion, and the processing/distribution
system now can handle crops of 20 million bales or more; and

*there are many technologies in place and on the horizon, such as the
boll weevil eradication program, insect and herbicide resistant cotton
varieties and precision farming techniques, that promise to help U.S.
cotton producers maintain their technological edge in the world

"U.S. growers have a competitive edge in technology, and it will be
important to maintain it," Smith said. "That's why I believe support for
agricultural research appropriations must continue to have a high
priority. It is one of several specific actions aimed at achieving a
major goal identified by the Council's strategic planners - reducing
production, processing and distribution costs throughout the system. The
brand of market orientation confronting us now demands that we do
everything possible to squeeze costs out of the system."

Smith said the Council will continue its active role. in working for
favorable government policy, which will almost certainly be debated
every year as spending measures are considered by Congress. And whether
or not Congress passes another farm bill in the year 2002, the National
Cotton Council must keep a strong focus on a host of other Washington
policy issues -including trade, tax policy, research appropriations and
regulatory issues."

As the unifying force of the U.S. cotton industry, the Memphis-based
National Cotton Council has a mission of ensuring the ability of all
industry segments to compete effectively and profitably in the raw
cotton, oilseed and value added product markets at home and abroad.

Soybean hulls can treat water

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ST. LOUIS - Agricultural by-products like soybean hulls have often been
an underutilized waste material by milling and crushing plants.

Through a national soybean checkoff-funded project, researchers are
using soybean hulls in treating wastewater and drinking water during
filtration. They have developed a process to transform soybean hulls to
non-carbonized metal absorbers and to convert hulls to activated metals
carbons. The project, which is one of 54 Domestic Marketing projects
funded by the United Soybean Board, is being overseen by researchers
from the U.S. Department of Agriculture.

We discovered metal absorption could be achieved by treating soybean
hulls with oxidants, such as sodium hypochlorite (household bleach),"
says Wayne Marshall, a project researcher from the USDA Southern
Regional Research Center in New Orleans, La.

Soybean hulls that come from oil mills are unmodified, or
non-carbonized. Because of the unique composition of soybean hulls, they
are very effective at absorbing metals. Their affinity for metals also
make hulls~ effective at softening water and removing magnesium calcium.

Using non-carbonized hulls also is a cost-efficient method of water
treatment. The use of the hulls is inexpensive in comparison to current
treatment processes. Currently, ion-exchange resins are most commonly
used to absorb metals and filter water. Resins are expensive, says
Marshall, and by using the hulls, treatment facilities can reduce costs
by not spending as much on resins and investing in soybean hulls.

"This is another example of adding value to the hull and the soybean,"
explains Marshall.

Non-carbonized hulls can only be used two or three times, but their use
in the filtration process does not end with metal absorption. After
their useful life as metal absorbers has expired, soybean hulls can
become carbonized by mixing the hulls with a suitable binder and
compressing them into briquettes. These high-density, carbonized
briquettes are superior to non-carbonized hulls for absorption of
organic compounds, and are similar to non-carbonized hulls in metals

"The briquettes are more costly than non-carbonized hulls, but they can
be used more often that non-carbonized hulls," says Marshall. "The
non-carbonized hulls are not as durable in batch applications."

Marshall says some companies, particularly seed crushers, have
expressed interest in this soybean hull technology, especially activated
carbons. However, transferring this technology to companies like seed
crushers would not come cheap. According to Marshall, it would cost $5-6
million to construct and equip a new facility to manufacture activated
carbons, but it would only cost $800,000 for a non-carbonized
manufacturing facility.

"We expect to be able to conduct product demonstrations within a year
and a half to two years for interested companies. We want to transfer
the technology to the companies and let them make the profit from it,"
explains Marshall.

Senate bill is aimed to keep water flowing

By J.E. `Buster' Brown
and Lt. Gov. Bob Bullock
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Water is the lifeblood of our existence, but it is something we tend to
take for granted when Mother Nature's been generous. Texans assume water
will flow from the tap when they prepare to make a pot of coffee, wash
their hands, take a bath, or simply get a cool drink on a warm day.

With the state's population expected to explode over the next 50 years,
increasing strains on diminishing supplies, the future holds no
guarantee that water will always be readily available in Texas.
Heightened environmental concerns and the high costs and red tape
necessary for new supplies have made water planning and management
difficult. And until recent years, planning from a statewide perspective
has proven an exercise in futility.

Not that state water officials and some lawmakers haven't tried. In
1957, the Legislature created the Texas Water Development Board and gave
it the authority to develop a state plan. Eleven years later, the TWDB
submitted the first plan to the Legislature, but no action was taken.
Subsequent plans were submitted to legislators four times between 1984
and 1992, and the results were the same. No action.

We are 40 years behind the times, and we cannot afford to wait any
longer. The potential for future crises has been more than evident
during the drought still lingering today. During the peak of the drought
in 1996, several Texas towns' water supplies ran perilously low, forcing
local officials to look elsewhere for water to pipe back to their
communities. Water use restrictions were in exact from city to city. The
Texas Agriculture Extension Service estimates that Texas producers lost
$2.1 billion worth of crops and livestock and the adverse impact to the
economy overall is expected to top $5 billion.

Rain or shine, however, experts now warn that without changes in state
water policy no area of ~the state will be immune from water shortages
by 2050. It is imperative for Texas to have a comprehensive statewide
plan in effect by the turn of the century. Senate Bill 1, which was
introduced January 22, will lay the foundation for that plan while
providing a diverse blend of strategies to meet future demands.

The legislation proposes action in several general policy areas:
drought response management, water management, marketing and transfers,
surface and ground water supplies, financial assistance to local
governments and small communities and data collection and dissemination.

Texas is a diverse state, and solutions that are appropriate for one
region may not be suitable for another. Water availability, economics,
geography and environmental issues will determine how policies should be
structured for specific areas. With an emphasis on coordination at the
local level, we feel Senate Bill 1 will provide small cities and towns
with a "toolbox" of possible approaches to meet their own unique needs.

Drought management preparedness is an integral part of the legislation,
with state assistance possible to local governments that initiate
drought response plans. Conservation is one of the most crucial parts of
water management, and this is reflected in the bill. The bill envisions
a statewide network to coordinate the exchange of information among
governmental agencies as well as state, regional and local drought
response efforts. The bill clarifies state policy on interbasin
transfers, an area that will generate much debate, even though water has
been transferred among basins in the state for nearly a century. More
than 80 agreements are in effect now.

Even though complacency often sets in when droughts give way to good
rains, Texans still take their water very seriously. As a result, there
will be many diverse opinions as the debate unfolds, but we must remain
committed to finding common ground. That is the nature of compromise -
but there is no compromise with nature. Studies show that by 2010 about
15 percent of projected urban demands in Texas will go unmet without
reasonable measures in place. As a consequence, the Texas economy stands
to lose between $25 billion and $40 billion annually.

Every Texas resident has a stake in this legislation. Regional
cooperation is necessary. We want to hear from all walks of life, from
farmers and ranchers, business people, local officials,
environmentalists and individual Texans. A unified front is necessary to
overcome barriers and to raise the public awareness about the need for a
coordinated state plan. The bill seeks to reinforce the belief that
clean, abundant water should be a guarantee in Texas - not an uncertain

As Ben Franklin said, "You don't know the worth of water until the well
is dry."

Let's not let Texas wells go dry.
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