The Relation of Quality of Cotton To Prices Paid to Farmers In Alabama

Transcription

1 BULLETIN 235 SEPTEMBER 93 The Reltion of Qulity of Cotton To Prices Pid to Frmers In Albm By J. D. POPE nd CARL M. CLARK AGRICULTURAL EXPERIMENT STATION OF THE ALABAMA POLYTECHNIC INSTITUTE IN CO-OPERATION WITH UNITED STATES DEPARTMENT OF AGRICULTURE BUREAU OF AGRICULTURAL ECONOMICS M. J. FUNCHESS, Director AUBURN, ALABAMA

2 ALABAMA AGRICULTURAL EXPERIMENT STATION STAFF Brdford Knpp, B S., LL. B., D. Agr., President M. J. Funchess, M. S., Director of Experiment Sttion W. H. Weidenbch, B. S., Secretry P. 0. Dvis, B. S., Agriculturl Editor Mry E. Mrtin, Librrin Sr Willeford, B. S., Agriculturl Librrin AGRONOMY AND SOILS: M. J. Funchess, M.S. Hed Professor of Agronomy J. W. Tidmore, Ph. D. -Professor of Soil Chemistry G. D. Scrseth, B. S. Assistnt Professor of Soil Chemistry Ann L. Sommer, Ph. D. Associte Professor of Soil Chemistry H. B. Tisdle, M. S _---- Associte Professor of Plnt Breeding J. T. Willimson, B. S. Associte Professor of Agronomy R. Y. Biley, B. S. Assistnt Professor of Agronomy D. G. Sturkie, Ph.D _ Assistnt Professor of Agronomy *F. L. Dvis, M. A. -Assistnt Professor of Agronomy G. H. Jester, B. S. Assistnt in Agronomy F. K. Bertrm, B. S _ Assistnt in Agronom y K. L. Myton. B. S. Assistnt in Agronomy J. W. Richrdson, B. S. Assistnt in Agronomy J. K. Tylor, B. S Assistnt in Agronomy H. W. Bennett, B. S_ Grdute A ssistnt Hoyt Sherrd, B. S. Grdute Assistnt ANIMAL HUSBANDRY, DAIRYING AND POULTRY: J. C. Grimes, M. S Hed Professor of Animl Husbndry, Dirying nd Poultry W. D. Slmon, M. A. -Reserch Professor of Animl Nutrition G. A. Shreder, Ph. D _---- Associte Professor of Animl Nutrition C. 0. Pricket, B. A. Associte Professor of Animl Nutrition G. A. Trollope, B. S. Professor of Poultry Husbndry D. F. King, M. S. Assistnt Professor of Poultry Husbndry W. K. Sewell, M. S. - Assistnt Professor of Animl Husbndry G. J. Cottier, M. A. Assistnt in Animl Husbndry C. T. Biley, B. S. Superintendent Poultry Frm J. G. Goodmn Grdute Assistnt in Animl Nutrition BOTANY AND PLANT PATHOLOGY: J. L. Sel, Ph. D. Acting Professor of Botny nd Plnt Pthology **G. L. Fick, M. S Assistnt Professor of Botny nd Plnt Pthology K. V. Smith. M. S. Assistnt in Botny nd Plnt Pthology AGRICULTURAL ECONOMICS: *J. D. Pope, M. S. Hed Prof. of Agriculturl Economics B, F. Alvord, M. S. Associte Professor of Agriculturl Economics C. C. Crmn, M. S. Associte Professor of Agriculturl Economics C. M. Clrk. M. S. Assistnt Professor of Agriculturl Economics Dee R. Oeff, B. S. Assistnt in Agriculturl Economics Edith My Slights Sttisticl Assistnt AGRICULTURAL ENGINEERING: M. L. Nichols. M. S. Hed Professor of Agriculturl Engineering J. W. Rndolph, M. S. A. Crnes, M. S..- - Agriculturl Engineering (Coop. U. S. D. A.) Assitnt Professor of Agriculturl Engineering N. W. Wilson. B. S. Assistnt Professor of Agriculturl Engineering E. Diseker, B. S. Assistnt Professor of Agriculturl Engineering H. D. Sexton. B. S. - -Grdute Assistnt ENTOMOLOGY: J. M. Robinson. M. A. Hed Professor of Entomology nd Zoology H. S. Swingle, M. S. Associte Professor of Entomology L. L. English, Ph. D Associte Professor of Entomology F. S. Arnt, M. S. Assistnt in Entomology nd Zoology SPECIAL INVESTIGATIONS: J. F. Duggr, M. S. Reserch Professor of Specil Investigtions HOME ECONOMICS RESEARCH: Edn R. Bishop, M. A. Associte Professor of Home Economics HORTICULTURE AND FORESTRY: L. M. Wre, M. S. Acting Hed Professor of Horticulture nd Forestry C. L. Isbell, Ph. D. Professor of Horticulture nd Forestry 0. C. Medlock, M. S. K. W. Tylor. M. S. Assistnt Professor of Horticulture nd Forestry Assistnt Professor of Horticulture nd Forestry P.. Wright, B. S. Grdute Assistnt E. W. McElwee, B. S _ Grdute Assistnt VETERINARY MEDICINE: M. W. Emmel, M. S Professor of Animl Pthology SUBSTATIONS: Fred Stewrt, B. S. Supt. Tennessee Vlley Substtion. Belle Min, Al C. F. King Assistnt to Tennessee Vlley Substtion Superintendent R. C. Christopher, B. S. --- Supt. Snd Mountin Substtion, Crossville, Al. J. M. Hernderson. B. S _S. Assistnt to Snd Mountin Substtion Superintendent J. P. Wilson. B. S. Supt. Wiregrss Substtion, Hedlnd, Al, K. G. Bker. B. S _ Supt. Blck Belt Substtion, Mrion Junction. Al. C. L. McIntyre, B. S. Assistnt to Blck Belt Substtion Superintendent Otto Brown. M. S. Supt. Gulf Cost Substtion. Firhope, Al. Hrold Ytes, B. S Assistnt to Gulf Cost Substtion Superintendent *Assigned by the Stts Deprtment of Agriculture nd Industries. **On leve. Sept., 93

3 The Reltion of Qulity of Cotton To Prices Pid to Frmers In Albm By J. D. POPE Hed Professor of Agriculturl Economics CARL M. CLARK Assistnt Professor of Agriculturl Economics BULLETIN 235 SEPTEMBER 93

4 Tle of Contents IN TRO DU CTION EXPLANATION OF TERMS USED PROCEDURE QUALITY OF COTTON PRODUCED IN ALABAMA, , Grde of Albm Cotton Stple Length of Albm Cotton -8 Tenderbility of Albm Cotton -9 VARIATIONS IN PRICES IN LOCAL MARKETS - 0 Vritions in Prices for Sme Qulity-0 Vritions in Prices Between Locl Mrkets PRICE DIFFERENCES PAID FOR QUALITY Grde Differences Stple Premiums nd Discounts LOCAL BUYERS AND GOVERNMENT CLASSIFICATION 29 SELLING IN ROUND LOTS SPREADS BETWEEN FARM AND CENTRAL. MARKETS PRICES ECONOMIC ASPECTS OF VARIETIES Vrieties Grown by Frmers Results of Experimentl Tests of Vrieties SUMMARY REFERENCES APPENDIX

5 The Reltion of Qulity of Cotton to Prices Pid to Frmers in Albm INTRODUCTION ALABAMA frmers often hve been urged to produce cotton of better qulity, especilly with respect to length of stple. They hve been dvised generlly tht it would be to their economic dvntge to do so. While it is known tht the superior stple lengths re worth more for mnufcturing purposes thn the inferior lengths, it hs not been, known to wht extent, if ny, such differences in vlues re reflected in prices pid to frmers in Albm. In fct, no informtion hs been vilble on price differentils for either grdes or stples in locl mrkets in this Stte. This study, ws undertken to determine the extent to which differences pid in centrl mrkets obtined in frmers mrkets, nd to determine whether or not n economic bsis exists for the improvement of the qulity of the cotton produced in the Stte. This study ws conducted in coopertion with the Division of Cotton Mrketing of the Bureu of Agriculturl Economics of the United Sttes Deprtment of Agriculture. In 926 nd 927, the Albm Experiment Sttion ws responsible for the collection of the smples of bles of cotton used in the study nd for obtining price dt nd other fcts concerning those bles. In 928, the smples nd the dt relting to them were collected coopertively by the United Sttes Deprtment of Agriculture nd the Albm Experiment Sttion. In ll three yers, the Deprtment of Agriculture clssed the smples in ccordnce with government stndrds nd supplied quottions of prices previling for different grdes nd stple lengths in centrl mrkets. A mjor portion of the nlysis of the reltions of qulity nd price ws conducted by the Deprtment of Agriculturl Economics of the Albm Experiment Sttion. Apprecition is expressed to the mny cotton buyers, ginners, wrehouse men, frmers, nd others in Albm who cooperted TABLE.-Number of Towns nd Bles of Cotton Smpled, Albm, Yer Number used in study Bles with Towns Bles smpled price dt ,047 3, f: 3,63 2, ,996 8,996 Totl 22 7,656 4,454

6 cordilly in supplying lrge prt of the dt used in this study. Acknowledgment is due severl present nd former members of the Deprtment of Agriculturl Economics for vluble ssistnce in collecting nd nlyzing dt. Specil credit is lso due Messrs. Arthur W. Plmer, B. Youngblood, W. B. Lnhm, nd L. D. Howell of the Division of Cotton Mrketing of the United Sttes Deprtment of Agriculture. Other members of the Division ssisted in the collection nd nlysis of the dt. EXPLANATIONS OF TERMS USED Qulity of cotton: Grde nd stple. Chrcter is third element of qulity but is not considered in this bulletin. Clss: Grde nd stple. Grde: "The composite of: () The color, luster, nd brightness of the lint; (2) the nture nd mount of foreign mtter present in the lint, such s lef, dust, or other foreign mtter; nd (3) the preprtion or ginning."' Stple length: The length of cotton fibers, quoted in eighths, sixteenths, or thirty-seconds of n inch. All stple lengths shorter thn 7/8-inch re included in one group, nmely, 3/6-inch nd shorter. Tenderble cotton: Those grdes nd stples tht my leglly be offered in the settlement of futures contrcts mde subject to Section 5 of the United Sttes Cotton Futures Act. 2 Point: One one-hundredth of cent, referring to price per pound of cotton. Differences: The "ons" nd "offs" pid for grdes, nd premiums nd discounts pid for stples. "On" mens more thn, "off" mens less thn the bsis grde or stple. A minus sign preceding difference figure indictes "off", or discount. Centrl mrkets differences nd prices: Averges of the quottions of the 0 spot mrkets s reported by the United Sttes Deprtment of Agriculture, with the exceptions noted below. The ten spot mrkets re August, Dlls, Glveston, Houston, Little Rock, Memphis, Montgomery, New Orlens, Norfolk, nd Svnnh. The ten spot mrkets quottions re used insted of the Montgomery quottions becuse only smll proportion of Albm cotton is sold on the Montgomery mrket, nd the verges of the ten spot mrkets re more widely representtive of vlues. These mrket. hve been designted by the Secretry of Agriculture for the pur pose of furnishing officil quottions of verge commercil dif ferences for grdes which re to be used in the settlement of grd differences for cotton delivered on futures contrcts. 2 The pric, quottions for the ten spot mrkets represent the prices t whici cotton ws purchsed by cotton merchnts nd shippers from loc

7 buyers, or from growers selling cotton in lrge lots. Averges of the quottions of the New Orlens nd Memphis mrkets were used for stple premiums in 926 nd 927. In 928, for 5/6-inch nd inch cotton, verges of the quottions of the six spot mrkets giving quottions for stple premiums were used. Averges of the quottions for Memphis nd New Orlens were used for stple premiums of lengths longer thn inch. The discounts used for cotton with stple length of 3/6-inch nd shorter were the discounts of the New Orlens, Houston, nd Glveston mrkets for 3/6-inch stple, s reported by the United Sttes Deprtment of Agriculture. 8 Frmers or locl mrkets differences: The "ons" nd "offs" for individul bles of different grdes nd stples s clculted from the verge prices received by frmers for the bsis grde nd stple on the sme dy in the sme town. Frm price: The price received by frmers for cotton in locl mrkets. No deductions were mde for storge or other chrges. Bsis: The grde from which "ons" nd "offs" re clculted. For exmple, if Strict Middling is quoted s 25 points "on", bsis Middling, it mens Strict Middling is selling for 25 points more thn Middling. Spred: The difference between frm price nd centrl mrkets price. A plus spred is one in which the centrl mrkets price is more thn the frm price. A minus spred is one in which the centrl mrkets price is less thn the frm price. Rnge: The difference between lowest nd highest of given group of prices. Round lot: Two or more bles sold t one verge price per pound. Mrketing seson: August to July 3, inclusive. Abbrevitions used for grdes: M.F. = Middling Fir M. = Middling S.G.M. = Strict Good Mid- S.L.M. = Strict Low Middling dling L.M.= Low Middling G.M. = Good Middling S.G.O. = Strict Good Ordi- S.M. = Strict Middling nry G.O.- Good Ordinry Abbrevitions used for colors: Sp.= Spotted Lt. Yel. St. = Light Yellow Yel. Tinged-=Yellow Tinged Stined Yel. St. = Yellow Stined Blue St.= Blue Stined Unless stted otherwise the color is white. For exmple, G. M. mens Good Middling White; G.M.Sp. mens Good Middling Spotted.

8 PROCEDURE Collection of smples.-in ech of the three yers of the study, smples of individul bles were collected during the ctive months of the ginning seson t towns or gins in different regions of the Stte. In 926 nd 927, the smples were collected weekly, nd drwn in n p~iroved mnner, both sides of the ble being represented. In 928; smples were drwn directly from the press box during the process of ginning. Ech smple ws given number for identifiction. The number of towns in which smples were collected, the number of bles smpled, nd the number on which price dt were obtined re given in Tble. Clssifiction of smples.-all smples were clssed by government clssers in ccordnce with officil cotton stndrds of the United Sttes. The smples obtined in 926 nd 927 were clssed in Wshington nd those obtined in 928 were clssed in Atlnt, Georgi. Obtining dt on bles smpled.-the dte of sle nd the exct price pid to the frmer for ech ble were obtined for s mny s possible of the bles smpled. Buyers grdes were obtined t four towns in 926 nd t one town in 928. All dt were tken from the records of buyers. Cotton sold in round lots ws kept seprte from cotton sold s single bles. Obtining dt on vrieties.-frmers ih six counties, who hd produced cotton in 928 on which government clssifiction nd price dt hd been obtined, were interviewed concerning the vriety of cotton grown, yield per cre, nd other fctors. Dt were obtined on these bles from gins s to weights of seed, lint, nd tre. Anlysis.-The generl procedure followed in nlyzing the reltions between qulity of cotton nd prices pid to frmers, consisted in determining () differences in prices pid to frmers for different grdes nd stples, (2) spreds between frm prices nd centrl mrkets prices, nd (3) rnges from lowest to highest prices for given groups of bles. Detiled descriptions of the methods of clculting differences nd spreds re given lter in this bulletin. Frmers differences were compred with centrl mrkets differences. The significnce of spreds nd rnges ws noted in reltion to price differentils for qulity in locl mrkets. QUALITY OF COTTON PRODUCED IN ALABAMA, The dt on qulity of Albm cotton cover the five-yer period 926 to 930; the dt on prices s ffected by qulity refer to 926, 927, nd 928. The dt on qulity for 926 nd 927 were bsed on smples collected by the Albm Ex-

9 periment Sttion representing different regions of the Stte nd constituted 0.34 per cent nd 0.30 per cent) respectively, of the totl crops produced in ech of those yers. The dt on qulity for 928, 929, nd 930 were bsed on the grde nd stple estimtes of the United Sttes Deprtment of Agriculture- Smples collected included in ech of those yers fromn5 to 0 per cent of the totl production. TABLE 2.-Percentge Distribution of Stple Length s Determined from 0 Per Cent nd 0.3 Per Cent Smples of Albm Cotton Crop of 928. Stple length Per cent Inches 0 per cent smple 0.3 per cent smpleb 3/6 nd shorter / / nd longer Totl Grde nd stple estimtes of U. S. Deprtment of Agriculture, Tble 28. bbles used in price nlysis in this study. Evidence tht smple s smll s three-tenths of one per cent my be considered firly dependble in estimting the reltive mounts of leding grdes nd stples in Albm ws provided by rndom selection of 3,595 bles from 7,35 single bles used in the price nlysis for 928. This constituted smple of 0.3 per cent of the 928 crop. The results from this sml smple my be compred with those obtined from the 0 per cent smple on which ws bsed the grde nd stple estimte of the crop of 928 mde by the United Sttes Deprtment of Agriculture. The differences in results obtined from the lrger nd smller smples re reltively gretest for the stple lengths longer thn 7/8-inch, which represent smll percentge of the totl. For yer to yer comprison, therefore, of the percentges of 3/6-inch nd shorter nd 7/8-inch stple, the smples obtined in 926 nd 927 pper to be useful. Similrly, the dt for 926 nd 927 should serve to give firly relible picture of the composition of the crops of those yers for leding grdes. Grde of Albm Cotton During the period 926 to 930, 77 per cent of Albm cotton= ws Middling White nd bove (Tble 3). Ten per cent ws White below Middling. Cotton spotted in color mounted to bout 2 per cent. Light Yellow Stined, Gry, Blue Stined, nd Below Grde cotton for the five-yer period verged less thn one per cent of the totl crop. Over four-fifths of Albm cotton ws white in color from 926 to 930. In generl, the

10 grdes of the Albm crop hve been good nd compre fvorbly with grdes produced in the United Sttes s whole. Eighty-one per cent of Albm cotton for 928, 7 per cent for 929, nd 73 per cent for 930 ws Middling White nd bove s compred with 72, 66, nd 73 per cent, respectively, for the United Sttes. A smller percentge of white cotton produced in Albm in 928, 929, nd 930 ws below Middling thn ws true of the United Sttes crop. During the sme yers lrger percentge of Albm cotton ws spotted thn for the United Sttes. TABLE 3.--Percentge of Different Grdes of Cotton Produced in Albm, , nd in the United Sttes, Per cent Grde nd Albm United Sttes color b 929b 930b 928b 929b 930b White, Middling nd bove c c 72.Oc 66.4c 72.7c White, below Middling c c 5.0c 2.c 8.c Spotted, ll grdes Other grdes nd colors Totl Bsed on smples collected by Albm Experiment Sttion, (Appendix Tbles 26 nd 27.) bbsed on grde nd stple estimtes of U. S. Deprtment of Agriculture, (Albm, Appendix Tbles 28, 29 nd 30). cincludes Extr White grdes. In 926, 927, 928, nd 930, the modl or most common grde ws Strict Middling White, which ccounted for 30 per cent, 48 per cent, 50 per cent, nd 36 per cent, respectively, of the production in those yers. In 929, Middling White ws the most common grde, comprising 35 per cent of the totl bles. Strict Middling White ws second in importnce nd comprised 33 per cent of the totl bles. Stple Length of Albm Cotton Certin oustnding fcts my be noticed with respect to the stple of the Albm cotton crop. The first is tht lrge proportion of the crops produced from 927 to 930 hs fllen below 7/8-inch in stple length, mounting to 45 per cent in 929 (Tble 4). The cotton of stple length inch or longer did not comprise more thn one or two per cent of the totl bles smpled in ny of the five yers for which dt were presented.

11 For the five-yer period 99 per cent of the Albm crop consisted of 3/6-inch nd shorter, 7/8-inch, nd 5/6-inch stple, The stple length of the Stte's crop suffered considerble deteriortion from 926 to 930. TABLE 4.-Percentge of Different Stple Lengths of Cotton Produced in Albm, , nd in the United Sttes, Stple length Albm Per cent United Sttes Inches b 929b 930b 928b 929b 930b 3/6 nd shorter / / nd longer Totl Bsed on smples collected by Albm Experiment Sttion, (Appendix Tbles 26 nd 27). bbsed on grde nd stple estimtes of U. S. Deprtment of Agriculture, (Albm, Appendix Tbles 28, 29 nd 30). The stple length of Albm cotton compres unfvorbly with the United Sttes s whole. During the yers 928, 929, nd 930, 24 per cent, 45 per cent, nd 39 per cent, respectively, of Albm cotton ws 3/6-inch nd shorter s compred with 4 per cent, 20 per cent, nd 3 per cent, respectively, for the United Sttes. Approximtely 22 per cent of the United Sttes cotton crop ws inch or longer in stple length for the yers 928, 929, nd 930 s compred with only bout one per cent for Albm during the sme yers. Tenderbility of Albm Cotton The reltively lrge mounts of untenderble cotton in Albm in 927, 928, 929, nd 930 were due lmost entirely to the 3/6-inch stple nd shorter produced in those yers (Tble 5). The fct tht cotton is untenderble does not men tht it is not usble or does not hve mrket. At the sme time, the sesonl verge discount for 3/6-inch stple incresed from 67 points to 08 points. 3 A greter proportion of the Albm crop ws untenderble thn of the United Sttes crop from 928 to 930. Twenty-four per cent of Albm cotton ws untenderble in 928 s compred with 8 per cent for the United Sttes s whole. 9

12 0 TABLE 5.-Percentge of Untenderble Cotton Produced in Albm, , nd in the United Sttes, Per cent Tenderbility Albm United Sttes b 929b 930b 928b 929b 930b Untenderble in grde only Untenderble in stple only Untenderble in both: grde nd stple Totl untenderble Totl tenderble Totl Bsed on smples collected by Albm Experiment Sttion, (Appendix Tbles 26 nd 27). bbsed on grde nd stple estimtes of U. S. Deprtment of Agriculture, (Albm, Appendix Tbles 28, 29 nd 30). VARIATIONS IN PRICES IN LOCAL MARKETS Vritions in Prices for Sme Qulity Prices pid to frmers for identicl clsses of cotton were chrcterized by wide rnges from highest to lowest price. Extreme instnces occurred in 926 of rnges s high s 400 points, nd in 927 nd 928 of bout 300 points (Tble 6). The verge rnge ws 77 points in 926, 49 points in 927, nd 35 points in 928 for ll instnces of the sle of two or more bles of the sme grde nd stple in the sme town on the sme dy. The nrrowing of the rnges from 926 to 928 corresponded to the incresing stbility of the cotton price level over the three yer period. There ws no vrition in bout 7 per cent of the instnces during the three yers. There seems to be tendency for buyers to vry their prices t intervls of 25, 50, 75, nd 00 points. The 25-point intervls from zero to 00 points for the three yers included bout 42 per cent of the totl number of instnces. The rnges were wider for the lower grdes thn for the higher grdes. The verge rnge in 926 for Good Middling ws 50 points, for Strict Middling 75 points, nd for Middling 9 points (Tble 6). Enough instnces of sles of Strict Low Midd-

13 TABLE 6.-Averge nd Highest Rnges in Prices Pid for Specified Grdes of Cotton Sold in the Sme Town on the Sme Dy, Yer Grde 7/8-inch stple G.M. S. M. M. Totl or verge G.M. S.M. M. I. u I Totl or verge G.M. S.M. M. i,, Totl or verge No. of instnces of 2 or more bles sold in sme town on sme dy Averge rnge in points Highest rnge in points Zero points Per cent of instnces where the rnge ws 25 points points 75 points points Per cent of instnces where rnge ws 0, 25, 75, nd 00 points I I I 2. I/ f /

14 2 ling nd other low grdes were not vilble to give significnt verge rnge for those grdes. A similr tendency for the verge rnge to be wider with the lower grdes occurred in both 927 nd 928. For the three-yer period the verge rnges for Good Middling, Strict Middling, nd Middling were 32 points, 5 points, nd 66 points, respectively. The higher grdes hd greter percentge of the totl instnces with no vrition in price thn did the lower grdes. In 926, the percentge of totl instnces with no vrition in price ws 22 for Good Middling, 7 per cent for Strict Middling, nd 2 per cent for Middling. There ws similr tendency in 927 nd 928. The most probble explnton of the nrrower rnges in the better grdes ppers to lie in the fct tht higher grdes were more esily identifled s "good cotton" thn the lower grdes which gve more difficulty in determining their true vlues. The rnge tended to increse s the number of bles included in given instnce incresed. In 926, n verge rnge for Good Middling, Strict Middling, nd Middling ws 5 points for the sle of two bles, 67 points for 3 bles, 85 points for 4 bles, nd 7 points for 5 bles. A similr tendency existed in 927 nd 928 (Tble 7). As the number of bles incresed wider smpling of the mrket ws obtined, nd more representtive mesure of rnges ws provided. With the lrger number of bles wider rnge would be expected, but successive increses in size of smple resulted in smller increses in the rnge. An explntion of the wide rnges in frm prices is not to be found in the much smller dily rnges which occurred on the futures exchnges. The verge dily rnge of quottions on the New York futures exchnge from August to December, inclusive, in 926 ws 25 points, nd the highest rnge for ny one dy ws 37 points (Tble 8). The verge dily rnge for the sme months in 927 ws 47 points. Twice during this period the price vried s much s 200 points which ws the limit under the rules of the exchnge. Further investigtion is needed to determine the cuses of these irregulr vritions in locl mrkets. Probbly the leding cuses, however, were imperfections such s the following: () Lck of ccurte knowledge on the prt of buyer or seller or both of the true qulity nd vlue of the cotton. (2) Necessity of mking immedite sles or purchses on the prt of buyer or seller. (3) Opportunity of the buyer to mke profit from the frmer on trnsction other thn the cotton purchsed. (4) Other fctors ffecting the brgining power of buyer or seller. The vritions in prices pid for the sme qulity of cotton, s given bove, re significnt in the problem of pying frmers

15 _ TABLE 7.-Averge Rnges in Prices for Numbers of Bles Indicted of Specified Grdes Sold in Sme Town on Sme Dy, 926, 927, nd 928. Yer Grde 7/8- inch G.M. S.M. 2 bles sold M. Totl or Averge 3 G.M. S.M. M. Totl or Averge G.M. S.M. M. Totl or Averge Number of instnces of two or more bles sold in sme town on sme dy 8 3, bles sold bles sold bles sold i i i i i I Totl bles sold bles sold Averge rnge in points I I-I I I - I I 4 bles sold 5 bles sold All instnces r I I /. ~ II

16 4 TABLE 8.--Dily Rnge in New York Futures, August to December, Month Month Future Rnge in points Yer of delivery Smllest Lrgest Averge quottion month rnge on one dy rnge on one dy rnge for month 926 August Oct September Dec October Dec November Dec December Jn August to December August Oct September Dec October Dec November Dec December Jn August to December August Oct September Dec October Dec November Dec December Jn August to December for their cotton in ccordnce with its qulity. As will be shown lter, such vritions were often greter thn vritions bsed on differences pid in ccordnce with qulity in centrl mrkets. Frmers sometimes receive more thn their cotton is worth, nd sometimes less. Such lck of exctness in price mking indictes tht chnges in locl mrketing methods re needed if frmers re to be rewrded ccurtely for the grde nd stple length of their cotton. Vritions in Prices Between Locl Mrkets The verge prices pid for cotton of identicl qulity vried mrkedly between the different locl mrkets. In 926, the price levels for 2 towns covered rnge of 40 points, in 927 for 5 towns rnge of 67 points, nd in 928 for 0 towns rnge of 85 points (Tble 9). The reltive price levels of different towns were clculted from prices of bles of the most representtive grdes nd stple lengths sold on the sme dy in respective towns. The town with the lowest price level ws used s the bse, nd its level represented by 0. The levels of the other towns were expressed s the number of points ech one ws

17 5 TABLE 9.-Reltive Price Levels of Albm Towns Indicted, 926, 927, nd 928. Number Averge Number Averge Town of locl mrket Town of locl mrket bles price level bles price level 926 E 08 0 M J 80 53K 8 92 C A N L G B 5 92D E 48 0 C A 4 24 L H R V T 233 3Q 63 3 U N 26 6 L 588 7S J P higher thn the bse town. Towns with very smll number of bles were omitted. The cuses of these differences in price levels cnnot be dequtely explined from dt obtined in this study. Some of the fctors which pper to influence price levels re nerness to cotton mills, freight rtes, competition mong buyers, nd the reputtion for stple length of the given locl mrket. Freight rtes to importnt cotton consuming centers from ech of the locl mrkets hd n verge rnge of bout 30 points nd therefore do not ccount for mjor portion of the vritions. PRICE DIFFERENCES PAID FOR QUALITY Different grdes nd stples of cotton possess different utilities for mnufcturing purposes, nd ccordingly, prices pid by consuming estblishments would be expected to vry with qulity. The mesures used for differences pid-for different qulities were those quoted in centrl mrkets. Grde Differences Differences pid to frmers for different grdes (7/8-inch stple only) were clculted from prices received by frmers. The Strict Middling grde ws used s bsis in mking ll comprisons becuse it ws the most representtive. Prices for given bles were compred only with other bles sold on the sme dy nd in the sme town, thereby voiding errors tht

18 6 might be cused by dy to dy fluctutions in prices, nd possible differences in previling price levels in different towns. Averges were clculted for ll towns for ech seson. These verge differences were converted from the Strict Middling bse to the Middling bse in order tht they might be compred with centrl mrkets differences. According to the grde nd stple clssifictions s given in Appendix Tbles 26, 27, nd 28, from 3 to 56 clsses of cotton were produced in Albm in 926, 927, nd 928. Seven of these clsses, however, contin the bulk of the cotton produced in the Stte, nd the bles of these grdes hving 7/8-inch stple length were used in clculting frmers differences. These grdes were Good Middling, Strict Middling (used s bsis), Middling, Strict Low Middling, Good Middling Spotted, Strict Middling Spotted, nd Middling Spotted. They included, (7/8- inch stple), 87 per cent, 84 per cent, nd 69 per cent of the Stte's production in 926, 927, nd 928, respectively, ccording to the smples obtined. The verge differences pid for these grdes in centrl mrkets nd in frmers mrkets, together with the number of bles on which the clcultions were bsed, re shown for ech of the three sesons in Tble 0, nd illustrted grphiclly in Figure. These dt indicte tendency on the prt of cotton buyers to py frmers more for the better grdes thn for the poorer grdes. TABLE 0.-Averge Differences Pid Frmers in Albm nd in Centrl Mrkets for Grdes Indicted, Bsis Middling 7/8, Differences Differences pid Clss Number of bles pid frmers in centrl mrkets 7/8-inch Number of points Number of points stple G.M S.M , M Bsis Bsis Bsis Bsis Bsis Bsis S.L.M T99-77 G.M. Sp S.M. Sp M. Sp In 926, the differences pid frmers were reltively wider in the Spotted grdes thn in the White grdes. For tht yer, in the White grdes, frmers differences showed trend from 94 per cent of centrl mrkets differences for Good Middling to 28 per cent for Strict Low Middling. The trend in the Spotted grdes ws in the opposite direction nd moved from 500 per cent for Good Middling Spotted to 44 per cent for Middling Spotted (Tble ). The crop of 926 ws chrcterized by reltively lrge proportion of low grdes s compred with the

19 7 PONT6 WHITE. SP0TTY.D ON G. M. S. M. CJ. L, M. (G. M. S. M. M Z. ON' GM. J. M. J.L...M. G.,M. J. M. _M OT5 2(5- Midlig /8269 8

20 8 other two yers. Approximtely 30 per cent of the crop consisted of White below Middling, nd colors other thn White, s compred with 0 per cent nd 9 per cent, respectively, in 927 nd 928 (Tble 3). In 927, s in the preceding yer, more ws pid on the verge for the better grdes thn for the poorer grdes. There ws the sme tendency in 928 to py more for the better grdes lthough the differences were nrrower thn in the other two yers. There ws nrrowing of differences both in centrl mrkets nd in frmers mrkets from 926 to 928. Frmers differences, however, nrrowed more mrkedly over this period thn centrl mrkets differences. The rnge in differences in centrl mrkets from the number of points "off" for Strict Low Middling to the number of points "on" for Good Middling ws 66 points in 926, 47 points in 927, nd 7 points in 928. The corresponding rnge in frmers differences for the sme grdes for the sme period ws 90 points in 926, 86 points in 927, nd 4 points in 928. TABLE.-Per Cent Albm Frmers Differences were of Centrl Mrkets Differences for Grdes Indicted, Bsis Middling 7/8-inch, Clss Per cent 7/8-inch stple G.M S.M S.L.M G.M. Sp S.M. Sp M. Sp Frmers difference 4 points "on", centrl mrkets difference 4 points "off". Rtio of Frmers Grde Differences to Centrl Mrkets Differences.-In 926, the frmers differences were lrger thn those pid in centrl mrkets except for Good Middling in which cse the frmers difference ws 94 per cent of the centrl mrkets differences (Tble ). The rtio of frmers differences to centrl mrkets differences ws much wider in 926 thn in 927, nd wider in 927 thn in 928. A possible explntion of the wide differences pid frmers in 926 is found in the fct tht the cotton mrket ws upset by the extremely lrge crop of tht yer. The verge dily price of Middling in the centrl mrkets from September to December 3 hd rnge from high to low of 6.46 cents. In 927, the rnge for the corresponding period ws 5.03 cents nd in 928, 2.98 cents. In 927, the rtio of frmers differences to centrl mrkets differences to 79 per cent rnged for from Strict 35 Middling, per cent for except Good for Middling Strict Spotted Middling

21 Spotted for which the frmers received slight "on" difference s compred with slight "off" difference. In 928, unlike the other yers, rtios of frmers differences to centrl mrkets differences were firly similr for ech of the grdes, rnging from 35 per cent to 42 per cent, except for Strict Middling Spotted for which frmers obtined no difference s compred with 3 points "off" in the centrl mrkets. In the cse of the ltter grde, centrl mrkets prices were prcticlly identicl wth those for Middling nd the sme ws true in frmers mrkets. Frmers differences for the grdes of white cotton in ech of the three yers were less thn those pid in the centrl mrkets except for Strict Middling nd Strict Low Middling in 926. Frmers received greter differences for spotted cotton in 926 thn those reported in centrl mrkets. In 927 nd 928, frmers differences for Strict Middling Spotted vried only slightly from centrl mrkets differences, but in both yers were slightly bove the ltter. Frequency Distribution of Grde Differences.-Although the verge differences pid to frmers, s given in Tble 0, indicte definite tendencies on prt of buyers to py frmers more for the better grdes thn for the poorer grdes, they re fr from indicting n exct differentition in the price pid for ech individul ble. Instnces quite commonly occurred in which the better grdes brought lower prices thn the lower grdes. Although the differences pid for different grdes hve significnce s verges, n exmintion of the frequency distributions of these differences throws further light on the pyment of such differences. The frequency distributions for the most common grdes re illustrted in Figures 2, 3, nd 4. Some of the bles hving extreme differences re not shown. An outstnding chrcteristic of the distribution of the differences ws tht they cover n extremely wide rnge. For exmple, the differences pid for Good Middling in 926 rnged from 22 points "off" Strict Middling to 202 points "on" Strict Middling. The differences pid for Strict Low Middling covered the extreme rnge of from 68 points "off" Strict Middling to 30 points "on" Strict Middling. The rnge of differences in 927 ws not s gret s in 926, nd in 928 ws much nrrower thn those in either 926 or 927. The rnges involve only the two extreme cses, the highest nd lowest differences in the given distribution. A more significnt description of the distribution is fforded by the stndrd devition. The stndrd devition is sttisticl mesure which gives the number of units to be dded to nd tken from the verge in order to obtin rnge within which would be included, in norml distribution, bout 68 per cent of the totl number of units. For exmple, the verge difference pid for Good Middling in 928 ws 3 points "on" Strict Middling. The stnd- 9

22 ._. TABLE 2.-Rnges nd Stndrd Devitions of Differences Pid in Locl Mrkets in Albm for Specified Grdes, Bsis Strict Middling 7/8-inch, Yer Grde 7/8-inch Number of bles Averge difference in points Rnge in points Stndrd devition in points Per cent bles included in one stndrd devition bove nd below verge difference Above S.M. Per cent bles which sold Sme s S.M. Below S.M. 926 G.M. M. S.L.M. S.M. Sp G.M. M G.M. M. S.L.M. ~I\L~ I S.M. Il I n Sp I riri A ~ I C I -- I

23 PELR 46'c2/ A/DAL /NCI- %-/AICH BALLS 3$.YTPICT LOW A/LL/V( %o8/nc/i BALES / /00 -Z~k5LI± 4 Y50 /00-20*2 /50 -/ z CLEN M/DDL/I/ BALLS 466 %s INC/ ita'/ct Y/ADL/A~r BAS 5/53 PERP '0 '0 -/ / /50 -ce PONSP0/O 3/N/T.5 FIGURE 2.-Percentge distributions of differences in prices pid frmers in Albm for cotton of grdes indicted, bsis Strict Middling 7/8, 926 (Some of the bles hving extreme differences re not shown).

24 22 CENT NIT MIDDL/NG /-/NCHi BALSD 25/ /00 POI/NTS / /00 PO/A'T FIGURE 3.-Percentge distributions of differences in prices pid frmers in Albm for cotton of grdes indicted, bsis Strict Middling 7/8, 927 (Some of the bles hving extreme differences re not shown). rd devition of the differences ws 9.3 points (Tble 2). The ddition of 9.3 points to 3 points "on," or 22.3 points "on", nd the subtrction of 9.3 points from 3 points "on," or 6.3 points "off", gives rnge within which ctully 82 per cent of the bles were included. This indictes tht the distribution ws more peked thn norml. Although very few bles were sold t exctly the verge differences, it is significnt tht in the distributions of differences mny more bles were sold t certin points long the scle of differences thn t other points. For most grdes, more bles were sold t difference of zero, tht is, t the sme price s Strict Middling, thn t ny other point. This ws especilly true of Good Middling in ll yers nd of Middling nd Strict Middling Spotted in 928. In the distributions of differences for Middling, Strict Low Middling, nd Strict Middling Spotted in 926, nd for Strict Low Middling in 928 more bles were centered round 50, 75, 50, nd 200 points "off" thn ny other point in the distributions of differences. This indictes tht differences were mde in terms of cents, hlf cents, or qurter cents; for exmple, 3.9 per cent of Strict Low Middling bles in 928 brought difference of 75 points "off" Strict Middling which ws lrger percentge thn

25 o I I, -ioo -5o O So - /oo - 50 I i I7[ GOO0 M/DDL/A'45?% -INCH BALES35,32 ST!'/C T LOWv. IMIDDLINAI r-/nchl BALES 6 i, I-i - 5 Po/IV TS L / S00/00 PQ/N75 M/ODL /NG BALfS 8/8 /NCI/ STRICT M/mD/iI' SPOTTiD -/NCH 54 LE io s 0 hill 0 C -0 - p0/hits Po5C-wrs y f7 _ /M FIGURE 4.-Percentge distributions of differences in prices pid frmers in Albm for cotton of grdes indicted, bsis Strict Middling 7/8, 928 (Some of the bles hving extreme differences re not shown).

26 24 for ny other difference. This difference ws lmost identicl with the verge difference quoted in centrl mrkets for the difference of Strict Low Middling, which ws 77 points "off" Middling. This suggests tht frmers were more often pid differences for Strict Low Middling thn for ny other grde. Although the wide dispersion of the differences might pper to destroy the significnce of the verge differences, s clculted, there ws unmistkble evidence of the pyment for individul bles of certin mounts "off" for Middling, Strict Low Middling, nd Strict Middling Spotted. Stple Premiums nd Discounts Differences pid to frmers for different stple lengths were clculted from bse of 7/8-inch stple. Comprisons were mde only of bles of the sme grde sold in the sme town on the sme dy. Eight tenderble grdes were used for this purpose. Averges were clculted for ll towns for ech seson. Centrl mrkets differences for stple in 926 nd 927 were reported in terms of monthly verges for Middling White cotton. In clculting the centrl mrkets differences for the bles used in this study for those two yers, the differences quoted for Middling were used. In 928, centrl mrkets differences for stple were quoted seprtely for ech grde nd the centrl mrkets differences were clculted on tht bsis. Stple differences pid to frmers in Albm nd in centrl mrkets re given in Tble 3. TABLE 3.Averge Differences Pid Frmers in Albm nd in Centrl Mrkets for Stple Lengths Indicted, Bsis 7/8-inch, Stple Differences pid Differences pid length Number of bles frmers in centrl mrkets Number of points Number of points Inches /6 5 87, / b 25 b 2 82 Number of bles too smll for significnt results. bno dt. During the three yers of the study, 99 per cent of the Albm crop ws composed of 3/6-inch, 7/8-inch, nd 5/6-inch cotton. Cotton of inch stple nd longer constituted such very smll proportion of the crop tht the number of bles vilble for determining the differences, if ny, pid for these longer lengths ws too smll for relible results. In 926, yer chrcterized by wide vritions in prices nd in grde differences, frmers received premium of only one point for 5/6-inch over 7/8-inch, wheres premium of 6

27 points ws pid in centrl mrkets. An verge premium of one point ws pid frmers for 5/6-inch cotton in 928. There ws no evidence in these dt tht distinction ws mde in locl mrkets between 7/8-inch nd 5/6-inch cotton in purchses from frmers. In 926 nd 928, premiums of 6 points, nd 28 points, respectively, were pid in centrl mrkets for 5/6-inch cotton. Interest in qulity of the Albm cotton crop is centered in the lrge mount of cotton shorter thn 7/8-inch in stple length. The verge discount pid frmers for 3/6-inch nd shorter mounted to 24 points for 5 bles in 926, 0 points for 87 bles in 927, nd one point for,202 bles in 928. These dt indicte slight tendency in 926 nd 927 to py discounts for 3/6-inch nd shorter, but the lrge smple obtined in 928 showed no such tendency. In 926, the rnge from the discount pid in locl mrkets for 3/6-inch nd shorter to the premium for 5/6-inch mounted to 25 points, s compred with 6 points in centrl mrkets. In 928, the corresponding rnge in locl mrkets ws 2 points s compred to 82 points in centrl mrkets. The highest verge discount pid in centrl mrkets for Middling 3/6-inch cotton in ny month from August, 924, the erliest dte for which quottions re vilble, to April, 930, ws 50 points, which previled from August to December, inclusive, in 925; in December, 929; nd in Jnury, The lowest verge monthly discount ws 50 points from August to October, inclusive, in 924, nd from August to October in 928. The yerly verge discount rnged from 67 points in to 25 points in No quottions were vilble s to discounts pid for 3/4-inch stple or shorter in centrl mrkets. Some of the bles of cotton used in this study were shorter thn 3/6-inch in stple length, but only discounts pplying to 3/6-inch were used for those lengths. Except for the discounts pid for 3/6-inch stple nd shorter in 926 nd 927, which were 24 nd 2 per cent, respectively, of centrl mrkets discounts, the discounts pid frmers for 3/6-inch nd shorter nd premiums pid for 5/6-inch formed n insignificnt portion of the differences pid in centrl mrkets (Tble 4). The dt fforded by the present study indicte tht no such mrked premiums nd discounts were pid for stple length to frmers in Albm s were pid in centrl mrkets. Very little distinction, if ny, ws mde between 3/6-inch nd shorter, 7/8-inch, nd 5/6-inch stple, in the purchse of individul bles from frmers in 926, 927, nd 928. Frequency Distribution of Stple Premiums nd Discounts.- A study of the frequency distribution of stple differences lso shows tht no mrked premiums or discounts were pid to frmers in Albm for stple length. The frequency distributions 25

28 26 TABLE 4.-Per Cent Frmers Differences in Albm were of Centrl Mrkets Differences for Stple Lengths Indicted, Bsis 7/8-inch, Stple length Per cent Inches / /6 2 4 b 2 Number of bles too smll for significnt results. bno dt. of stple differences for 5/6-inch in 926, for 3/6-inch nd shorter, nd 5/6-inch in 928 re illustrted in Figure 5. Some of the bles hving extreme differences re not shown. Approximtely 46 per cent of the bles of 3/6-inch stple nd shorter sold t prices bove nd 4 per cent sold t prices below 7/8-inch stple in 928. The tendency ws for stple differences to group round the zero point. More thn twice s mny bles were bought t the sme price s 7/8-inch thn t ny other price. If tendency hd existed in locl mrkets to py discounts for 3/6-inch stple, the bles of tht stple length would hve centered round those points in the distribution of differences. The tendency of the stple differences for 5/6-inch in 928 to center round the zero point ws similr to tht of 3/6-inch nd shorter. The stple differences for 5/6-inch stple in 926 did not center bout the zero point s they did for tht length in 928. A fctor ffecting the distribution of differences in 926 much more thn in 928 ws the rpid decline in cotton prices, cusing wide vritions in prices on the sme dy. The rnge for 3/6-inch stple nd shorter in 926 vried from 8 points below 7/8-inch to 67 points bove 7/8-inch or totl of 348 points (Tble 5). In 928, the rnge for 3/6- inch nd shorter nd 5/6-inch, respectively, vried from 242 points nd 252 points bove to 35 points nd 43 points below 7/8-inch. The vribility in the stple differences ws gret s shown by the stndrd devitions of stple differences which were 46.7 points for 3/6-inch nd shorter in 926, 30.7 points for 3/6-inch nd shorter, nd 30.4 points for 5/6-inch in 928.

29 /00 /00 27 PER/ CENAT IC STAPLE 6-WCH-Q926 SAL 65 / / /00 /50 PO/NT5 T5V 577/PL E '/A/c//H/928 BA LE5 /z202 5~ 5 PE, CEAI -/00 -W 0 0 o/00 50 TP0/YES 37T/PLE '/6oIA-/I /928 BALES 54/2 ii I i I. I IIIIII - oi~i~l 0/T FIGURE 5.-Percentge distributions of differences in prices pid frmers in Albm for cotton of stple lengths indicted, bsis sme grde 7/8-inch stple, 926 nd 928 (Some of the bles hving extreme differences re not shown).

30 TABLE 5.-Rnges nd Stndrd Devitions of Differences Pid in Locl Mrkets in Albm for Specified Stple Lengths, Bsis 7/8-inch, 926 nd 928. Stnd- Per cent bles Per cent bles Averge rd included in one which sold Stple Number difference Rnge devi- stndrd devi- Yer length of in in tion tion bove nd Above Sme s Below bles points points in below verge 7/8-7 / 8-7/8- Inches Points difference inch inch inch 926 5/ /6 nd, shorter 928 5/ Government clss TABLE 6.-Per Cent of Bles Clssed by Locl Buyer, Above, the sme s, or Below Government Clss, 683 Bles, Four Albm Towns, 926. Per cent of bles grded by buyer Two One One Two Three Four Grde No. of grdes grde Sme grde grdes grdes grdes Totl 7/8-inch stple bles bove bove grde below below below below S.G.M. & G.M S.M. & G.M. Sp M., S.M. Sp. & G.M. Y.T S.L.M., M. Sp. & S.M. Y.T L.M. & S.L.M. Sp S.G.O., G.O. & S.L.M. Y.T Totl

31 29 LOCAL BUYERS AND GOVERNMENT CLASSIFICATION In generl, stisfctory records indicting the buyers clssifiction of cotton, s purchsed from frmers, were not vilble. Even when records of grdes of cotton purchsed ppered on buyers books, it ws not lwys cler s to whether these grdes were used in buying cotton from the frmers or whether they were mde lter by the buyers for purposes of selling the cotton. In four towns in 926, dt were obtined from buyers s to their clssifiction of 706 bles, nd in one town in 928 for 87 bles. A summry of the government nd buyers clssifiction of these bles re shown in Tble 8 nd Appendix Tbles 3 nd 32. A comprison of the government clssifiction with the buyers clssifiction for the four towns in 926 shows tht the government plced these bles in 27 different clsses, wheres the buyers plced them in 4 grdes. The government clssed 683 bles, 7/8-inch stple; bles, 3!6-inch nd shorter; nd 2 bles 5/6-inch. The buyers clssifiction involved no stple clssifiction, t lest s fr s vilble records indicted. Only 3 bles out of ech hundred, however, ccording to government clssifiction, were other thn 7/8-inch stple length. The government clssifiction of the bles included 5 grdes nd the locl buyers clssifiction 4 grdes for the bles with 7/8-inch stple length. The buyers grding centered round one grde below the government grde. The devitions were bout eqully bove nd below the centrl tendency (Tbles 6 nd 7). In 926, 62 per cent of the bles ws grded by buyers one grde below the government grde. In 928, buyers grded pproximtely 57 per cent of the bles one grde below the government grde. In compring buyers grdes with government grdes, it ws ssumed tht the Spotted grdes were equivlent to the next lowest White grde, nd Yellow Tinged grdes equivlent to white cotton of two grdes below. Thus, S.M. Sp. ws considered "the sme s" M.; S.M. Y.T. "the sme s" S.L.M. TABLE 7.-Per Cent of Bles Clssed by Locl Buyer Above, the Sme As, or Below Government Clss, 646 Bles, One Albm Town, 928. Government clss Per cent of bles grded by buyer One One Two Three Grde No. of grde Sme grde grdes grdes Totl 7/8-inch stple bles bove grde below below below G.M S.M. & G.M. Sp M. & S.M. Sp S.L.M., M. Sp. & M. Y.T Totl

32 30 More bles were grded by buyers the sme s the government grdes in the low grdes thn in the high grdes (Tbles 6 nd 7). In 926, 8 per cent of Middling nd equivlent grdes ws grded the sme s the government grde, s compred with 62 per cent of Strict Good Ordinry nd lower grdes. There ws tendency on prt of buyers not to plce cotton in the higher grdes. Out of 706 bles, the government clssed 6 bles Strict Good Middling wheres locl buyers did not use this grde t ll (Appendix Tble 3). The government clssed 24 bles Good Middling, s compred with the buyers 5 bles; nd 82 bles Strict Middling s compred with 26 bles. On the other hnd, the government grded 22 bles Middling nd the buyers grded 98 bles Middling. The government grded only 69 bles Strict Low Middling nd 34 bles Low Middling; the buyers plced 74 bles nd 04 bles in those grdes, respectively. The government plced 55 bles in the Spotted grdes, wheres locl buyers plced only 29 bles in those grdes. Seven bles were plced in Yellow Tinged grdes by the government wheres the buyers plced 5 bles in those grdes. TABLE 8.-Percentge of Bles Plced in Different Stple Lengths by Government Clssifiction in Albm, Four Towns in 926, nd One Town in 928. Stple length Four towns, 926 One town, 928 Inches Bles Per cent Bles Per cent 3/ / / /8 0. Totl Probbly the point of gretest significnce with respect to government nd locl buyers grdes is tht cotton ws not clssifled ccording to stple in locl mrkets. The identifiction of bles of 3/6-inch nd shorter in locl mrkets, while not s importnt in 926 s in subsequent yers, becuse of the low percentge of such cotton in 926, is step of primry importnce if the qulity of individul bles is to be reflected ccurtely in prices in locl mrkets. The fct tht bout 80 per cent of the bles were grded by the locl buyers below government grdes, ws probbly not s significnt s the fct of the lrge percentge of error in the clssifiction of this cotton, if we my ssume perfect or nerly perfect ccurcy in the government clssing. If the buyers hd grded ech ble one grde below the government grdes, both the government nd buyers grdes would hve shown comprble differentition in qulity. These

33 fcts point to the need of improvement in clssifiction of cotton so tht dependble, uniform mesures of qulity s to both grde nd stple my be obtined in locl mrkets. SELLING IN ROUND LOTS Dt were obtined on 3,04 bles of cotton sold in round lots. Dt were not vilble showing the extent of selling in round lots. In town N, n importnt mrket in centrl Albm, summry of records of ll cotton purchsed by leding buyers covering 7,663 bles in 926 nd 8,308 bles in 927, indicted tht 75 per cent in 926, nd 83 per cent in 927, were sold in round lots. A lrge proportion of the single bles were sold in the erly prt of the mrketing seson. In 926, round lot sles fter Jnury included 95 per cent nd in 927, 97 per cent of ll bles purchsed. These figures cnnot be sid to be representtive of the Stte s whole in the bsence of dt from other towns. In this method of selling, the verge qulity of the lot ws often considered insted of ech ble being sold on its individul merit. In some instnces of round lot buying the round lot price ws clculted by merely verging the prices of individul bles. No dt re vilble to show the extent of the two methods of determining round lot prices. Since the government clssifiction ws obtined for ech ble in the round lots studied, it ws possible to determine price t which ech ble would hve sold individully if priced ccording to prices nd differences quoted in centrl mrkets. Comprison of the verge spreds of round lot bles nd single bles offered the most redily vilble mens of compring the reltive profitbleness of the two methods of selling. In ech of the three yers studied the round lot prices showed nrrower verge spred thn the single ble prices, the verge spred of the former being 20 points lower thn the ltter (Tble 9). This indictes profit of $.00 per ble s result of selling in round lots. Although the round lot method of selling my obscure the qulity of superior bles, it lso my obscure the qulity of inferior bles. Tht method, however, ppered to be to the frmers dvntge, s compred with selling in single bles. A fctor to be considered in round lot sles is the desirbility from the buyers stndpoint of purchsing s mny bles in one trnsction s possible. The costs of the trnsction in the purchse of ten bles would not be ten times s gret s the costs involved in the purchse of single ble. Such condition would presumbly induce the buyer to py greter price to obtin the lrger mount of cotton. Therefore, the frmer hs greter brgining power when he cn offer for sle severl bles t one time. 3

34 32 TABLE 9.-Comprison of Spreds for,43 Bles of Cotton Sold s Single Bles nd 3,04 Bles Sold in Round Lots, Albm, 926, 927, nd 928. Single Bles Yer Number Frm Centrl of price mrkets Spred bles price 926 3, , , Round lot bles , Single nd round lot bles 926 3, , , SPREADS BETWEEN FARM AND CENTRAL MARKETS PRICES The verge frm price for bles smpled of both single nd round lots of the 926 crop ws.55 cents per pound. The corresponding centrl mrkets price ws 3.23 cents per pound, giving plus spred of 68 points. In 927, the frm price ws cents per pound, s compred with the centrl mrkets price of cents per pound, giving plus spred of 45 points. In 928, the frm price ws 7.99 cents per pound s compred with 8.46 cents, giving spred of 47 points. The verge spreds for 927 nd 928 were lmost identicl while the spred in 926 ws more thn 00 points greter thn tht in 927 or 928. Apprently the wide spred in 926 ws ssocited with the demorlized condition of the mrket during tht seson in which the price declined stedily from August to December. Similr conditions did not previl in the other two yers. The spred between frm nd centrl mrkets prices, which represented such costs s trnsporttion, storge, nd other hndling chrges, ws not constnt quntity. The spreds not only vried from seson to seson but vried within the sme seson. In 926 nd in 927, the spred between frm price nd centrl mrkets price ws the lrgest during the pek of the mrketing seson (Tble 20). The spred widened from August to October then nrrowed in Jnury. This mens tht the frm price wekened in the erly prt of the seson nd becme reltively stronger in the ltter prt of the seson. In 928, the spred

35 TABLE 20.-The Averge Monthly Spred Between Frm Price nd Centrl Mrkets Price, Strict Middling 7/8, Albm, 926, 927, nd Yer Spred in points Aug. Sept. Oct. Nov. Dec. Jn nrrowed from August to October nd showed tendency to widen from October to Jnury. The frm price in tht seson ws stronger in the first prt of the seson nd weker in the ltter prt of the seson. ECONOMIC ASPECTS OF VARIETIES Vrieties Grown by Frmers Dt were obtined from frmers in six counties s to the vriety of cotton grown, nd the yield per cre. Government clssifiction ws obtined for t lest portion of the bles produced by ech frmer. A summry of vrieties grown by frmers is shown in Tble 2. In North Albm, Hlf nd Hlf ws the principl vriety grown. Cook vrieties, doubtless of the wilt-resistnt strins, predominted in South Albm. For the Stte s whole, the comprtively short stple vrieties were widely grown. Vrieties supposed to produce inch stple or longer were of minor importnce. The group of so-clled inch stple or longer contined mny bles which hd stple of 7/8-inch (Tble 22). No records were included under the specific vriety groups if the frmer did not sy he hd pure seed. Pure seed included only seed obtined from relible source, kept seprte t the gin, nd not reproduced for more thn two yers from the sme stock. There seems to be distinct reltion between vriety, s reported by frmers, nd the stple s determined by the government clssifiction. Thus 36 per cent of the bles of the Hlf nd Hlf group ws shorter thn 7/8-inch s compred with 0 per cent of the Cook group, 4 per cent of the Clevelnd group, nd 2 per cent of the inch stple nd longer group (Tble 22). The dt on yield per cre were not significnt in view of the fct tht locl conditions of soil, fertilizer, nd other fctors vried so much s to render obscure the net effect of vriety on yield. In view of the lck of differentition in prices ccording to stple length in locl mrkets, the vlue per cre vried directly with yield of lint per cre. For study of the vrious fctors ffecting the profitbleness of vrieties, we must depend on the results of experimentl tests. The dt from frmers, however, tend to indicte tht they hve found generlly most profit-

36 TABLE 2.-Number nd Percentge of Different Vrieties of 3,374 Bles Produced in Six Albm Counties, 928. of Cotton Number of Bles Per cent Vriety M Six group Tllpoos Mr- Gen- Mdi- Luderengo ev Tll- Mr- Gen- Mdison dle counpoosties poos engo ev son dle Luder- counties Hlf nd Cook Hlf , Vrieties Clevelnd Misc. Short Stple Totl Short Stple , Inch Stple nd longerb Mixed nd Unknownc Grnd Totl , Hevy Fruiter, Brodwell, Simpkins, Double Jointed, Rucker, King, Sikes, Toole, Addison, Poulknot. bvrieties supposed to produce inch stple or longer. cincludes bles of vrieties unknown to frmers nd bles of known mixed vrieties.

37 TABLE 22.-Stple Length nd Percentge Distribution of 3,363 Bles of Cotton of Different Vrieties Grown in Albm, 928. Vriety group 3/6 nd shorter 7/8 Number of Bles 5/6 or longer Totl ii 3/6 nd shorter 7/8 Per cent 5/6 or longer Totl Hlf nd Hlf Cook Clevelnd Misc. Short Stple Totl Short Stple Inch Stple nd longerb Mixed nd Unknownc Totl All Stple , , , , ,363 8 llevy Fruiter, Brodwell, Simpkins, Double Jointed, Rucker, King, Sikes, Toole, Addison, Poulknot. bvrieties supposed to produce inch stple or longer. cjncludes bles of vrieties unknown to frmers nd bles of known mixed vrieties LV

38 36 ble the short stple vrieties with high yields nd high percentge of lint. Results of Experimentl Tests of Vrieties In the light of present technology, the only wy in which the stple length of the Albm crop cn be lengthened is by substituting vrieties hving longer stples thn those now generlly grown. So fr s is definitely known, no improvement in stple length my be obtined by chnging methods of fertiliztion or culturl prctices. Dt on yield per cre nd stple length of the different vrieties hve been reported by the Albm Experiment Sttion from tests covering the five-yer period, 926 to 930. As mesure of the reltive profitbleness of these vrieties vlue per cre of lint ws clculted. The expression "vlue per cre" s used in this discussion lwys refers to vlue of lint nd does not include vlue of seed. The verge frm price of cotton in Albm from 926 to 930, which ws 4.69 cents, ws used in clculting the cre vlues of the different vrieties. The cre vlue ws clculted in two wys, first, the vlue per cre using no stple differences, nd second, the vlue per cre using the verge stple premiums nd discounts pid in centrl mrkets from 926 to 930. The verge discount in centrl mrkets for 3/6-inch ws 93 points. The premium for 5/6-inch ws 45 points, for inch 96 points, for /6 inches 6 points, nd for /8 inches 246 points. No djustment ws mde for picking nd ginning costs of different vrieties. The extr costs of ginning nd picking the vrieties with smll percentge of lint were mostly offset by incresed vlue of the seed of such vrieties. The vrieties with high gin turnout hve importnt dvntges such s permitting prompter hrvesting nd reducing hrvesting requirements, but these were not mesured in this study. The vrieties hve been rnked in order of their vlue without stple differences, since the present study hs indicted generlly lck of differentition in prices pid frmers for stple lengths of inch nd shorter, nd dt were not vilble for stple lengths longer thn inch. However, the vlue per cre djusted for stple premiums nd discounts should be considered since frmers cn obtin premiums nd discounts for stple lengths through the coopertive mrketing ssocitions. Since vrieties differ in their dptbility to different regions of Albm, they hve been plced in three generl groups, North Albm, Centrl Albm, nd South Albm. Vrieties in South Albm nd in portions of Centrl Albm need to be wilt-resistnt nd in this group those vrieties which were best suited to the wilt lnds of these sections hve been included. Results of the Experiment Sttion tests for the fiveyer period showed considerble vrition in stple length nd

39 yield per cre from one section of the Stte to nother. Vrieties rnking high in frm vlue per cre in one section were sometimes low in nother section of the Stte. In North Albm out of 6 vrieties tested for five yers, Cook 00 (Willimson) hd the highest verge vlue per cre when stple differences re not considered (Tble 23). This vriety yielded 368 pounds of lint per cre nd hd stple length of 3/6-inch, the shortest of ny of the vrieties tested for this re. D. P. L. 4-8 nd Trice, both verging stple length of 5/6-inch, rnked second nd fourth, respectively, in vlue per cre. Cook 627, which hd stple length of 7/8-inch, rnked third nd Delfos with stple length of /6 inches rnked fifth in vlue per cre. The order of the vrieties ws chnged considerbly when rnked ccording to cre vlues djusted for stple premiums nd discounts pid in centrl mrkets. Delfos rnks first with D. P. L. 4-8 close second. Delfos hs the disdvntge of being more expensive to pick thn the other vrieties mentioned. Cook 00 (Willimson) which ws first in vlue per cre without stple difference drops to sixth plce. When no stple differences were pid, Cook 00 (Willimson) ws worth $.03 more per cre thn D. P. L. 4-8, but when the discount of 93 points ws given Cook 00 (Willimson) nd the premium of 45 points ws given D. P. L. 4-8, the ltter ws worth $4.02 per cre more thn the former. According to stple premiums nd discounts, D. P. L. 4-8 ws worth n verge of.38 cents per 37 TABLE 23.-Cotton Vrieties Tested for North Albm Rnked from Highest to Lowest Averge Vlue of Lint Per Acre without Stple Differences, (Albm Experiment Sttion). Stple Yield Vlue per cre Vriety length per cre Without With /32- Pounds stple stple inch lint differences differences Cook 00 (Willimson) D. P. L Cook 627 (Smith) Trice Delfos Bottoms Cook 307 (Rhyne) Clevelnd (Piedmont) Dixie Triumph (Wtson) Cook College No Clevelnd (P. S. Co.) Clevelnd (Wnnmker) Acl No Mexicn Big Boll Webber Delt Type

40 38 pound more thn Cook 00 (Willimson). If such difference in price were pid to frmers consistently for individul bles, greter interest would develop in D. P. L Trice rnked third nd Cook 627 rnked fourth in vlue per cre with stple differences included. All the vrieties with inch stple nd longer, except Delfos, rnked comprtively low in cre vlue. The pyment of stple premiums does not improve the cre vlue of these vrieties enough to offset their low cre yields. The Webber Delt Type vriety, which verged stple length of /8 inches, would hve to be pid premium of 578 points to equl D. P. L. 4-8 in vlue per cre. This premium would be 332 points more thn the premium pid in centrl mrkets. Hlf nd Hlf, the most commonly grown vriety in North Albm ws tested for only two yers, 929 nd 930. On the bsis of the two yer tests, (using the five-yer verge price per pound nd stple differences) this vriety rnked third in vlue per cre without stple differences nd ninth with stple differences out of 27 other vrieties tested. Rucker mde outstnding yields in the tests in 929 nd 930, rnking first nd yielding 396 pounds of lint per cre s compred with 378 pounds for Cook 00 (Willimson), 362 pounds for Hlf nd Hlf, nd 359 pounds for Cook 307 (Rhyne). Rucker, which hd stple length of 25/32-inch, still rnked first in vlue of lint per cre when discounted 93 points, the centrl mrkets verge difference for 3/6-inch. If quottions on discounts for 25/32-inch hd been vilble, the cre vlue of Rucker would hve been still lower. The yield of lint per cre of Rucker ws so much lrger thn other vrieties tht the discount pid in centrl mrkets for 3/6-inch would hve to be incresed by 63 points to reduce Rucker to the sme level of profitbleness s its nerest competitor in the two yer test, nmely, Cook 00 (Willimson). Agin, on the bsis of the two yer tests, price of 2.42 cents per pound more would hve to be pid for D. P. L. 4-8 thn for Rucker to mke the two vrieties eqully profitble. In Centrl Albm, D. P. L. 4-8 with stple length verging 5/6-inch nd with yield of lint verging 43 pounds per cre led the list in frm vlue of lint per cre (Tble 24). This vriety ws followed by five vrieties hving stple length of 7/8-inch. Seven other vrieties which hd stple lengths of 5/6-inch or longer were lowest in vlues of lint per cre nd lso were reltively low in yields. None of the vrieties tested in Centrl Albm for the five-yer period hd stple length below 7/8 inch except Cook 00 (Willimson) which rnked seventh in vlue of lint per cre. The rnk of the vrieties ws not chnged mterilly when vlues of lint per cre included centrl mrkets premiums nd discounts, except for Cook 00 (Willimson) which moved from seventh to thirteenth plce nd Delfos which moved from twelfth to seventh plce. Delfos,