f^ /.2M S^')0 United States Department of Agriculture Economic Research Sen/ice Statistical Bulletin Number 877 Cotton Ginning Charges, Harvesting Practices, and Selected Marketing Cos^^, 1992/93 Season February 1994 Edward H. Glade, Jr., M. Dean Johnson, Leslie A. Meyer ^'H Science m.3im M IMOrc-l t)' 1 / riuj Ginning Charges The average charge for saw-ginning and wrapping a 480-pound net-weight bale of cotton in the United States was $42.50 during the 1992/93 season, com- pared with $42.61 per bale in 1991/92. This was the fifth consecutive season of declining average ginning charges. The lower charges in recent years reflect larger production throughout the Cotton Belt, improved average gin volumes, and the effects of relatively low inflation and interest rates. Also, the sale of cotton- seed has helped boost gin revenues (fig. 1). Average charges declined in seven States and in- creased in seven States. The largest drop in ginning charges occurred in Tennessee, where average charges fell by $1 .40 per bale, while Alabama experi- enced the largest increase with average charges up by $3.01 per bale. For most other States, 1992/93 ginning charges remained around year-earlier levels. In Texas, where ginning charges are based primarily on the vol- ume of seed cotton required to yield a 480-pound net weight bale, the average charge increased by $1 .16 per bale to $50.09. Poor growing and harvesting condi- tions caused the volume of seed cotton required per Figure 1 Ginning charges aided by cottonseed values 80 $/bale 1983/84 90/91 85/86 87/88 Crop Year •Estimated 600 pounds ol seed per 480-pound bale ginned. 92/93 T7d bale to increase about 50 pounds under the machine- stripped method of harvest to approximately 2,234 pounds. Active Gins There were a total of 1 ,383 active cotton gins operating in the 14 traditional cotton-producing States during the 1 992/93 season, compared with 1 ,500 the previous season. In addition, four gins operated in Florida and two in Virginia. A decline in production in 1 992/93 of 1.4 million bales, was primarily responsible for the un- usually sharp drop in the number of gins operating dur- ing 1992/93. The largest decline in numbers occurred in Texas where 67 fewer gins operated than in the 1991/92 season. The number of gins declined in all States in 1992/93, except in Georgia, Oklahoma, and Mississippi. The average volume processed per gin was 11 ,340 bales in 1992/93, only 32 bales below last season, but sharply above the average of recent years (fig. 2). The increasing proportion of production ginned from modules has allowed fewer gins to process larger volumes by extending the ginning season. Gin vol- umes varied from a high of 25,116 bales in California to a low of 2,900 bales in New Mexico during the 1 992/93 season. Method Of Harvesting The proportion of the 1 992/93 cotton crop harvested by the machine-picked method averaged 84 percent, an in- crease of 5 percentage points from the 1991/92 sea- son. Machine-stripping, used primarily in Texas and Oklahoma, accounted for 1 6 percent of the overall har- vested volume, compared with 21 percent in 1991/92. Lower 1 992/93 production in these two States, and relatively higher production in many other States were responsible for the increase in the machine-picking share during 1992/93. Machine-scrapping still ac- counts for less than 0.5 percent of the harvested vol- ume, but is practiced in a number of States, especially in Arizona. Average charges for saw-ginned i4>land cotton, average charges for selected aarketing services, ano Itea Unit U.S. AL AZ AR CA Bales ginned (rtxming bales) 1/ Active gins 1/ Average voluae per gin Ginning and wrapping charges: Total charge per 480- lb. net- weight bale 2/ Dol. 42.50 38.11 41.49 36.68 Method of harvesting: Machine-picked Pet. 84 100 95 100 Thou. 15,683 596 805 1,646 No. 1,383 68 81 121 Bale 11,340 8,765 9,938 13,603 Pet. 84 Pet. 16 Pet. 3/ Lbs. 1,452 4/ 1,464 1,450 Lbs. 2,233 --- — - ... Lbs. 1.739 ... 1.753 1,638 Pet. 33 31 17 40 Pet. 67 69 83 60 Machine-stripped Machine-scrapped Pet. 3/ 3/ 5 3/ Weight of seed cotton per 480- lb. net-weight bale: Machine-picked Maeh i ne- St r i pped Mach i ne- sc rapped Cotton ginned from: Trai lers Modules Charges for warehousing and related services: 6/ Charge per bale for receiving Dol. 3.11 3.02 -— 3.17 Charge per bale per month for insured storage Dol. 1.85 1.72 2.00 1.94 Charge per bale for conpressing to iniversal density Charge per bale for outhandling — = Zero. 1/ Based on report of May, 1993, by National Agricultural Statistics Service, USOA, and includes 4 active gins in Florida, and 2 in Virginia. 2/ Includes bagging and ties, drying of seed cotton, to warehouses, industry organization dues, or cotton classing fees. 3/ Less than 0.5 percent. 4/ Dol. 7.80 7.00 6.50 8.00 Dol. 6.24 5.21 5.16 8.30 .1111 nil iiiiii»« lated information, by State, 1992/93 season GA LA NS NO NN 722 1,296 2,074 530 58 59 77 181 41 20 12,237 16.831 11,459 12,927 2,900 NC OK SC TN TX 461 204 212 813 3,227 42 64 41 62 405 10.976 3.187 5,171 13 .113 7,968 42.03 36.18 36.50 38.71 56.63 50.15 52.35 46.40 32.70 50.09 100 100 99 99 94 100 20 100 100 30 6 80 3/ 70 4/ 1 .407 4/ 1,474 1,625 1.488 4/ 1.593 4/ 1.478 1,495 2,050 — 2,230 — 5/ 2,234 34 51 42 34 79 57 44 77 62 14 66 49 58 66 21 43 56 23 38 86 2.91 4.03 3.76 1.52 1.84 3.41 2.25 2.66 3.55 2.57 1.64 2.07 2.02 1.91 1.73 1.48 1.78 1.51 1.96 1.68 7.75 8.50 7.75 7.50 --- 7.75 — 8.25 8.75 4.69 8.12 8.70 8.28 4.71 3.11 4.05 3.68 8.37 4.55 th American- Pi ma and upland cotton. Excludes bales ginned in Florida, and Virginia, also excludes nt cleaning, and insurance, but does not reflect any partonage dividends, rebates, transportation ed cotton usually not weighed. 5/ No data available. 6/ Based on published tariffs. UNIVERSITY OF FLORIDA Figure 2 Modules improve ginning efficiency 1,000 bales 3 1262 08229 616 Figure 3 Percent 1983/84 1986/87 1989/90 Crop year 1992/93 40 30 20 10 Charges for cotton warehousing services vary by region, 1992/93 season $/bale ^^ Receiving I I Compression 21.59 8.76 Storage Outhandling ■ 16.39 ^^^^H w.oa ^ "^^^^^^^^^^^^ ^^^^^m 1^^^^^^ \\\\\m\\m\ Southeast • Mid-South Southwest West •• Region •Compression charges not made, except in Alabama at $7.00 per bale. ••Receiving charges not made. The use of modules as a method of temporary field storage of seed cotton continues to increase across the Cotton Belt. A record 67 percent of the 1 992/93 cot- ton crop was ginned from modules. The remaining 33 percent was ginned from traditional seed cotton trailers (fig. 2). By State, use of modules ranged from 86 per- cent of the crop in Texas to 21 percent in New Mexico during 1 992/93. Pounds Of Seed Cotton Required for a 480-Pound Net-Weight Bale The average volume of seed cotton necessary to yield a 480-pound net-weight bale for each of the three har- vesting technologies changed only slightly during 1 992/93 compared with last season. Under the ma- chine-picked method of harvest, an average of 1 ,452 pounds of seed cotton were required, 14 pounds less than a year earlier. Cotton harvested by machine-strip- ping required 2,233 pounds of seed cotton to produce a 480-pound net-weight bale~48 pounds more than in 1991/92. Machine-scrapping required that 1 ,739 pounds of seed cotton be harvested per bale ginned, compared with 1,795 pounds during 1991/92. The United States Department of Agriculture (USDA) pro- hibits discrimination in its programs on the basis of race, color, national origin, sex, religion, age, disability, politi- cal beliefs, and marital or familial status. (Not all prohib- ited bases apply to all programs.) Persons with disabilities who require alternative means for communi- cation of program information (braille, large print, audio- tape, etc.) should contact the USDA Office of Communications at (202) 720-5881 (voice) or (202) 720- 7808 (TDD). To file a complaint, write the Secretary of Agriculture, U.S. Department of Agriculture, Washington, DC 20250, or call (202) 720-7327 (voice) or (202) 720-1127 (TDD). USDA is an equal employment opportunity employer. Selected Marketing Services After ginning, most cotton bales are moved to local warehouses for storage and other services necessary for marketing. Universal density compression is now performed at many gins. Some bales, therefore, are shipped directly to textile mills and ports from gin points. This can result in considerable savings as ware- house charges can vary greatly by region (fig. 3). Charges for each of the four primary warehousing serv- ices increased modestly for the 1992/93 season. Ware- house receiving charges averaged $3.11 per bale in 1992/93, compared with $2.88 in 1991/92. Storage charges averaged $1 .85 per bale per month, up 5 cents from the 1991/92 season average. Charges for compressing cotton to universal density increased only 3 cents per bale to an average of $7.80 in 1 992/93. Warehouse charges for outhandling or shipping serv- ices averaged $6.24 per bale during 1992/93, com- pared with $5.92 per bale a year earlier. For more information, call Edward H. Glade, Jr., (202) 219- 0840, or write: Commodity Economics Division, Economic Research Service, U.S. Department of Agriculture, Room 1034, 1301 New York Avenue, NW., Washington, DC 20005- 4788. 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