COTTON GINNING, HANDLING, AND MARKETING IN THE MISSISSIPPI RIVER DELTA REGION Joseph L. Ghetti and Edward H. Glade, Jr. July 1978 CONTENTS Page Introduction ........................................................ 1 Cotton Varieties and Grades ......................................... 1 Varieties of Cotton Grown ......................................... 1 Cotton Grades Produced ............................................ 1 Seed Cotton Harvesting and Handling ................................. 3 Harvesting and Handling Seed Cotton ............................... 3 Seed Cotton Required Per Bale ..................................... 4 CottonGinning ...................................................... 5 GinningCharges and Practices ..................................... Gin Numbers, Volume, and Capacity ................................. 6 Gin Ownership and Revenues ........................................ 9 Transportation, Warehousing, and Compression ........................ 10 Transportation .................................................... 10 Warehouses and Compresses ......................................... 11 Merchandising....................................................... 15 Summary ............................................................. 19 COTTON GINNING, HANDLING, AND MARKETING IN THE MISSISSIPPI RIVER DELTA REGION Joseph L. Ghetti and Edward H. Glade, Introduction The Mississippi River Delta region covers parts of four states par- alleling the Mississippi River. These counties lie both east and west of the river and include thirteen counties in Mississippi, eight Louisiana parishes, eleven Arkansas counties, and six Missouri counties (figure 1). The fertility of the region's land and the availability of major market outlets have made it one of the major cotton production and marketing regions in the Cotton Belt. Although soybeans and rice compete in varying degrees for the use of land, the region normally produces about 20 percent of the nation's cotton crop each year. Cotton Varieties and Grades Varieties of Cotton Grown Deltapine 16 and Stoneville 213 are the most popular varieties; each accounting for about 45 percent of the planted acreage. However, in some parts of the region Deltapine varieties are preferred by most producers while in other parts Stoneville varieties are more popular. Several other varie- ties such as Coker 310, Dixie King, and Auburn M account for a small per- centage of total planted acres. Cotton Grades Produced The quality of cotton produced in the region is usually very high. Strict Low Middling grades account for 41 to 46 percent of the total. 1/ Agricultural Economists, Fibers and Oils, Economics, Statistics, and Cooperatives Service, stationed at the Delta Branch Experiment Station, Stoneville, Miss., and Washington, D.C., respectively. Figure 1 3 About 88 percent of the cotton produced in the region is classified within white designations. Light spotted classifications account for about 10 per- cent, with the remainder classified as spotted, tinged, light gray or gray. However, nearly all of the light spotted cottons grade Strict Low Middling (SLM) or Low Middling (LM). Producers in the region harvested 1.5 million bales in 1975 and 1.7 million bales in 1974. Of this total, over 60 percent stapled 1-3/32 inches (35), over 30 percent 1-1/16 inches (34) and around 4 percent 1-1/8 inches (36). Micronaire or fiber fineness generally measures within the 3.5 to 4.9 no discount range. Generally, about 80 to 85 percent of all cotton is fairly fine measuring within the 4.0 to 4.3 range. Fiber strength is good and generally falls within 82 Mpsi to 84 Mpsi. Seed Cotton Harvesting and Handling Harvesting and Handling Seed Cotton Machine picking is used almost exclusively in the Mississippi River Delta region, with an occasional small amount of handpicking and machine stripping. Spindle type machine pickers harvest nearly 100 percent of the crop in most seasons. However, machine stripping has begun to make some inroads primarily because of uncertain weather conditions usually prevail- ing during the harvest season. In addition, there are indications that the trend may continue because of the smaller investment cost of strippers and the cheaper operating cost. Unlike some areas of the Cotton Belt, gins in the Mississippi River Delta region own few if any trailers. Traditionally, producers have owned and maintained their own trailers for transporting seed cotton to the gin. Moreover, they have assumed responsibility for returning empty trailers to 4 the farm for reloading. Most of the trailers are the older types which hold six bales of machine-picked cotton; but some 10-bale and larger trailers are now being used. A 1972 study estimated that each trailer used in this region hauled 75.4 bales of cotton to the gin each year. Including labor from harvest to the gin, average cost was reported to be $4.23 per bale. Further, the study reported that the average producer owned nine trailers and traveled five miles from farm to gin. Recently, module storage and to a slightly lesser extent rick storage of seed cotton have been used in this region. However, significant module and rick storage has not occurred since the 1973 season. Even though a large number of producers own this equipment, most of them seemingly pre- fer to use trailers when available and use the module or ricker system only as a means of reducing the risk of uncertain weather conditions. During the 1974-75 season for example, only 2 percent of the 1.5 million bales produced in Mississippi were moduled. The smaller 1975-76 crop (1.0 million bales) resulted in even less bales being moduled, as only one percent of the Mississippi crop utilized modules. Recently enacted wage guarantees of $2.65 per hour plus overtime pay for all hours worked in excess of 10 hours per day or 48 hours in one week will doubtlessly hasten the shift to module storage. The availa- bility of workers for gin work will also necessitate storage of cotton prior to ginning since in many parts of the region gins can only operate one shift per day. Seed Cotton Reauired Per Bale The typical bale of machine-picked cotton in this region requires approximately 1,500 pounds of seed cotton to a bale of lint compared with 5 about 1,300 pounds of handpicked cotton. The 1,500 pounds of machine- picked seed cotton normally results in about 500 pounds of lint, 150 pounds of trash and 850 pounds of cottonseed. Nearly 800 additional pounds of seed cotton are required to produce a standard bale of lint from machine stripped cotton. Cotton Ginning Ginning Charges and Practices Each ginner throughout the Mississippi River Delta region is free to set his ginning charge at whatever level he feels producers are willing to pay. However, competition generally forces most ginners in a particular area to establish rates at about the same level using the same method of assessment. Ginners in the Mississippi River Delta region use a variety of methods in arriving at the final cost for ginning. They are as follows: 1. Ginning for the seed. Using this method, the ginner weighs the total pounds of seed in the bale. He then establishes the price each ton of seed can be sold for ($90 to $100 in 1975) and divides this price by 2,000 pounds. The price per pound is then multiplied by the pounds of seed in the bale to obtain the charge for ginning a particular bale of cotton. Charges per bale using this method ranged from $29.88 to $35.70 in 1975. After the ginning season has ended and at some specified date (referred to as the settlement date) rebates are usually made from the seed account on a per bale basis. In 1975, rebates ranged from none to $7.00 per bale depending on profits made from seed sales and the actual cost of ginning. 2. A fixed charge per hundredweight of seed cotton including cost of bagging and ties. Charges ranged from $2.45 per hundredweight to $2.23 over the region in 1975. Seed cotton weights ranged from 1,439 to 1,491 pounds and resulted in charges from $32.09 per bale to $36.53 during 1975. 3. Ginning charges are also assessed in some parts of the region on a per hundredweight of seed cotton plus a separate charge for bagging and ties. During 1975, ginning charges using this method averaged $32.20 (based on $1.69 per cwt. x 1,491 pounds of seed cotton plus $7.00 for bagging and ties) in a few areas and $31.61 per bale (based on $1.61 per cwt. plus $7.84 for bagging and ties) in a few other areas. 4. A fixed charge per hundredweight of lint cotton (net) plus an additional charge for bagging and ties or a larger charge per hundred- weight of lint and no additional charge for bagging and ties. Charges when calculated by the first method resulted in charges of $28.71 per bale in 1975 ($4.97 per cwt. x 4.8 plus $4.85 bagging and ties) for machine-picked cotton using the second method amounted to $29.28 per bale ($6.10 per cwt. x 4.8). These charges, regardless of the method used, normally include insurance and transportation to the warehouse. Gin Numbers, Volume, and Capacity The Mississippi River Delta region has an abundance of ginning capacity. A total of 655 gins were active during the 1974 and 1975 seasons and processed a total of 2,081,761 and 1,540,673 bales during the respective seasons (table 1). Average bales processed per plant were 3,082 in 1974 and 2,352 in 1975 when production was down because of poor growing conditions. Total ginning capacity is 6,656 bales per hour and average capacity 10.2 bales per hour. Combined, the 655 gins could process 5,126,148