BULLETIN 235 SEPTEMBER 1931 The Relation of Quality of Cotton To Prices Paid to Farmers In Alabama By J. D. POPE and 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 ALABAMA AGRICULTURAL EXPERIMENT STATION STAFF Bradford Knapp, B S., LL. B., D. Agr., President M. J. Funchess, M. S., Director of Experiment Station W. H. Weidenbach, B. S., Secretary P. 0. Davis, B. S., Agricultural Editor Mary E. Martin, Librarian Sara Willeford, B. S., Agricultural Librarian AGRONOMY AND SOILS: M. J. Funchess, M.S. __ Head Professor of Agronomy J. W. Tidmore, Ph. D. -Professor of Soil Chemistry G. D. Scarseth, B. S. Assistant Professor of Soil Chemistry Anna L. Sommer, Ph. D. Associate Professor of Soil Chemistry H. B. Tisdale, M. S. ------------------------- Associate Professor of Plant Breeding _---J. T. Williamson, B. S. Associate Professor of Agronomy R. Y. Bailey, B. S. ________________________________________ Assistant Professor of Agronomy D. G. Sturkie, Ph.D. -------------------------------------_ Assistant Professor of Agronomy *F. L. Davis, M. A. -Assistant Professor of Agronomy G. H. Jester, B. S. Assistant in Agronomy F. K. Bertram, B. S. ---------------- _ --------------------Assistant in Agronom y K. L. Mayton. B. S. Assistant in Agronomy J. W. Richardson, B. S. Assistant in Agronomy J. K. Taylor, B. S. ---- -- --- _ _ . _ _ ---- -Assistant in Agronomy H. W . Bennett, B. S_ ------------------- -------------------. Graduate A ssistant Hoyt Sherard, B. S. Graduate Assistant ANIMAL HUSBANDRY, DAIRYING AND POULTRY: J. C. Grimes, M. S. .---- Head Professor of Animal Husbandry, Dairying and Poultry W. D. Salmon, M. A. -Research Professor of Animal Nutrition G. A. Shraeder, Ph. D. ------------------------_----Associate Professor of Animal Nutrition C. 0. Pricket, B. A. Associate Professor of Animal Nutrition G. A. Trollope, B. S. Professor of Poultry Husbandry D. F. King, M. S. Assistant Professor of Poultry Husbandry W. K. Sewell, M. S. -______________________ Assistant Professor of Animal Husbandry G. J. Cottier, M. A. Assistant in Animal Husbandry Superintendent Poultry Farm C. T. Bailey, B. S. J. G. Goodman Graduate Assistant in Animal Nutrition BOTANY AND PLANT PATHOLOGY: J. L. Seal, Ph. D. Acting Professor of Botany and Plant Pathology **G. L. Fick, M. S__.---------- Assistant Professor of Botany and Plant Pathology K. V. Smith. M. S. Assistant in Botany and Plant Pathology AGRICULTURAL ECONOMICS: Head Prof. of Agricultural Economics *J. D. Pope, M. S. Associate Professor of Agricultural Economics B, F. Alvord, M. S. Associate Professor of Agricultural Economics C. C. Carman, M. S. Assistant Professor of Agricultural Economics C. M. Clark. M. S. Assistant in Agricultural Economics Dee R. Oeff, B. S. Statistical Assistant Edith May Slights AGRICULTURAL ENGINEERING: Head Professor of Agricultural Engineering M. L. Nichols. M. S. Agricultural Engineering (Coop. U. S. D. A.) J. W. Randolph, M. S. Assitant Professor of Agricultural Engineering .A. Carnes, M. S. Assistant Professor of Agricultural Engineering N. W. Wilson. B. S. Assistant Professor of Agricultural Engineering E. Diseker, B. S. Assistant -Graduate H. D. Sexton. B. S. ENTOMOLOGY: Head Professor of Entomology and Zoology J. M. Robinson. M. A. Associate Professor of Entomology H. S. Swingle, M. S. Associate Professor of Entomology L. L. English, Ph. D.------------Assistant in Entomology and Zoology F. S. Arant, M. S. SPECIAL INVESTIGATIONS: Research Professor of Special Investigations J. F. Duggar, M. S. HOME ECONOMICS RESEARCH: Associate Professor of Home Economics Edna R. Bishop, M. A. HORTICULTURE AND FORESTRY: Acting Head Professor of Horticulture and Forestry L. M. Ware, M. S. Professor of Horticulture and Forestry C. L. Isbell, Ph. D. Assistant Professor of Horticulture and Forestry 0. C. Medlock, M. S. Assistant Professor of Horticulture and Forestry K. W. Taylor. M. S. Graduate Assistant _____ P. 11. Wright, B. S. Graduate Assistant _---------------------------E. W . McElwee, B. S. ---VETERINARY MEDICINE: ________ Professor of Animal Pathology -... M. W. Emmel, M. S. . ___-_____________ SUBSTATIONS: Supt. Tennessee Valley Substation. Belle Mina, Ala Fred Stewart, B. S. __________Assistant to Tennessee Valley Substation Superintendent C. F. King __ Supt. Sand Mountain Substation, Crossville, Ala. --R. C. Christopher, B. S. J. M. Hernderson. B. S _S._____ Assistant to Sand Mountain Substation Superintendent Supt. Wiregrass Substation, Headland, Ala, J. P. Wilson. B. S. Supt. Black Belt Substation, Marion Junction. Ala. ---_-------K. G. Baker. B. S. ---.------Assistant to Black Belt Substation Superintendent C. L. McIntyre, B. S. Supt. Gulf Coast Substation. Fairhope, Ala. Otto Brown. M. S. to Gulf Harold Yates, B. S. ______------------------Assistant Coast Substation Superintendent *Assigned by the Stats Department of Agriculture and Industries. **On leave. Sept. 1, 1931 The Relation of Quality of Cotton To Prices Paid to Farmers In Alabama By J. D. POPE Head Professor of Agricultural Economics CARL M. CLARK Assistant Professor of Agricultural Economics BULLETIN 235 SEPTEMBER 1931 Tale of Contents IN TRO DU CTION ------ -3--------------- --------------EXPLANATION OF TERMS USED ---------4 PROCEDURE -6-------- --- --- -- -- -------QUALITY OF COTTON PRODUCED IN ALABAMA, 192619 3 0 -- -- -- - -- -- - -- -- -- - - -,- -- -- - -- -- -- - -- -- - -- -- -- - -- -- - -- -- - 6 Grade of Alabama Cotton --------7 Staple Length of Alabama Cotton -8 Tenderability of Alabama Cotton -9 VARIATIONS IN PRICES IN LOCAL MARKETS 10 Variations in Prices for Same Quality-10 Variations in Prices Between Local Markets----------14 PRICE DIFFERENCES PAID FOR QUALITY ------------ 15 - Grade Differences-------------------------------15 Staple Premiums and Discounts ------------------------------- 24 LOCAL BUYERS AND GOVERNMENT CLASSIFICATION __29 SELLING IN ROUND LOTS------------------------------------------ 31 SPREADS BETWEEN FARM AND CENTRAL. MARKETS PRICES --------------------------------------------------------------- 32 ECONOMIC ASPECTS OF VARIETIES------------------___33 Varieties Grown by Farmers __--- Results of Experimental Tests of Varieties ----------------------------------------- 33 36 SUMMARY ------------------------------------------------------------- 41 REFERENCES ---------------------------------------------------------- 41 APPENDIX -------------------------------------------------------------- 42 The Relation of Quality of Cotton to Prices Paid to Farmers in Alabama INTRODUCTION farmers often have been urged to produce cotton of better quality, especially with respect to length of staple. They have been advised generally that it would be to their economic advantage to do so. While it is known that the superior staple lengths are worth more for manufacturing purposes than the inferior lengths, it has not been, known to what extent, if any, such differences in values are reflected in prices paid to farmers in Alabama. In fact, no information has been available on price differentials for either grades or staples in local markets in this State. This study, was undertaken to determine the extent to which differences paid in central markets obtained in farmers markets, and to determine whether or not an economic basis exists for the improvement of the quality of the cotton produced in the State. This study was conducted in cooperation with the Division of Cotton Marketing of the Bureau of Agricultural Economics of the United States Department of Agriculture. In 1926 and 1927, the Alabama Experiment Station was responsible for the collection of the samples of bales of cotton used in the study and for obtaining price data and other facts concerning those bales. In 1928, the samples and the data relating to them were collected cooperatively by the United States Department of Agriculture and the Alabama Experiment Station. In all three years, the Department of Agriculture classed the samples in accordance with government standards and supplied quotations of prices prevailing for different grades and staple lengths in central markets. A major portion of the analysis of the relations of quality and price was conducted by the Department of Agricultural Economics of the Alabama Experiment Station. Appreciation is expressed to the many cotton buyers, ginners, warehouse men, farmers, and others in Alabama who cooperated TABLE 1.-Number of Towns and Bales of Cotton Sampled, Alabama, 1926-1928. ALABAMA Number used in study Year Towns 1926 1927 14 6 Bales sampled . f: 5,047 3,613 Bales with price data 3,328 2,130 ... 1928 Total 11 22 8,996 17,656 8,996 14,454 cordially in supplying a large part of the data used in this study. Acknowledgment is due several present and former members of the Department of Agricultural Economics for valuable assistance in collecting and analyzing data. Special credit is also due Messrs. Arthur W. Palmer, B. Youngblood, W. B. Lanham, and L. D. Howell of the Division of Cotton Marketing of the Other members of United States Department of Agriculture. the Division assisted in the collection and analysis of the data. EXPLANATIONS OF TERMS USED Quality of cotton: Grade and staple. Character is a third element of quality but is not considered in this bulletin. Class: Grade and staple. Grade: "The composite of: (1) The color, luster, and brightness of the lint; (2) the nature and amount of foreign matter present in the lint, such as leaf, dust, or other foreign matter; and (3) the preparation or ginning."' Staple length: The length of cotton fibers, quoted in eighths, sixteenths, or thirty-seconds of an inch. All staple lengths shorter than 7/8-inch are included in one group, namely, 13/16-inch and shorter. Tenderable cotton: Those grades and staples that may legally be offered in the settlement of futures contracts made subject to Section 5 of the United States Cotton Futures Act. 2 Point: One one-hundredth of a cent, referring to price per pound of cotton. Differences: The "ons" and "offs" paid for grades, and premiums and discounts paid for staples. "On" means more than, "off" means less than the basis grade or staple. A minus sign preceding a difference figure indicates "off", or a discount. Central markets differences and prices: Averages of the quotations of the 10 spot markets as reported by the United States Department of Agriculture, with the exceptions noted below. The ten spot markets are Augusta, Dallas, Galveston, Houston, Little Rock, Memphis, Montgomery, New Orleans, Norfolk, and Savannah. The ten spot markets quotations are used instead of the Montgomery quotations because only a small proportion of Alabama cotton is sold on the Montgomery market, and the averages of the ten spot markets are more widely representative of values. These market. have been designated by the Secretary of Agriculture for the pur pose of furnishing official quotations of average commercial dif ferences for grades which are to be used in the settlement of grad differences for cotton delivered on futures contracts. 2 The pric, quotations for the ten spot markets represent the prices at whici cotton was purchased by cotton merchants and shippers from loca buyers, or from growers selling cotton in large lots. Averages of the quotations of the New Orleans and Memphis markets were used for staple premiums in 1926 and 1927. In 1928, for 15/16-inch and 1 inch cotton, averages of the quotations of the six spot markets giving quotations for staple premiums were used. Averages of the quotations for Memphis and New Orleans were used for staple premiums of lengths longer than 1 inch. The discounts used for cotton with a staple length of 13/16-inch and shorter were the discounts of the New Orleans, Houston, and Galveston markets for 13/16-inch staple, as reported by the United States Department of Agriculture. 8 Farmers or local markets differences: The "ons" and "offs" for individual bales of different grades and staples as calculated from the average prices received by farmers for the basis grade and staple on the same day in the same town. Farm price: The price received by farmers for cotton in local markets. No deductions were made for storage or other charges. Basis: The grade from which "ons" and "offs" are calculated. For example, if Strict Middling is quoted as 25 points "on", basis Middling, it means Strict Middling is selling for 25 points more than Middling. Spread: The difference between farm price and central markets price. A plus spread is one in which the central markets price is more than the farm price. A minus spread is one in which the central markets price is less than the farm price. Range: The difference between lowest and highest of a given group of prices. Round lot: Two or more bales sold at one average price per pound. Marketing season: August 1 to July 31, inclusive. Abbreviations used for grades: M. = Middling M.F. = Middling Fair S.G.M. = Strict Good Mid- S.L.M. = Strict Low Middling L.M.= Low Middling dling S.G.O. = Strict Good OrdiG.M. = Good Middling nary S.M. = Strict Middling G.O.- Good Ordinary Abbreviations used for colors: Lt. Yel. St. = Light Yellow Sp.= Spotted Stained Yel. Tinged-=Yellow Tinged Blue St.= Blue Stained Yel. St. = Yellow Stained Unless stated otherwise the color is white. For example, G. M. means Good Middling White; G.M.Sp. means Good Middling Spotted. PROCEDURE Collection of samples.-In each of the three years of the study, samples of individual bales were collected during the active months of the ginning season at towns or gins in different regions of the State. In 1926 and 1927, the samples were collected weekly, and drawn in an ap~iroved manner, both sides of the bale being represented. In 1928; samples were drawn directly from the press box during the process of ginning. Each sample was given a number for identification. The number of towns in which samples were collected, the number of bales sampled, and the number on which price data were obtained are given in Table 1. Classification of samples.-All samples were classed by government classers in accordance with official cotton standards of the United States. The samples obtained in 1926 and 1927 were classed in Washington and those obtained in 1928 were classed in Atlanta, Georgia. Obtaining data on bales sampled.-The date of sale and the exact price paid to the farmer for each bale were obtained for as many as possible of the bales sampled. Buyers grades were obtained at four towns in 1926 and at one town in 1928. All data were taken from the records of buyers. Cotton sold in round lots was kept separate from cotton sold as single bales. Obtaining data on varieties.-Farmers ih six counties, who had produced cotton in 1928 on which government classification and price data had been obtained, were interviewed concerning the variety of cotton grown, yield per acre, and other factors. Data were obtained on these bales from gins as to weights of seed, lint, and tare. Analysis.-The general procedure followed in analyzing the relations between quality of cotton and prices paid to farmers, consisted in determining (1) differences in prices paid to farmers for different grades and staples, (2) spreads between farm prices and central markets prices, and (3) ranges from lowest to highest prices for given groups of bales. Detailed descriptions of the methods of calculating differences and spreads are given later in this bulletin. Farmers differences were compared with central markets differences. The significance of spreads and ranges was noted in relation to price differentials for quality in local markets. QUALITY OF COTTON PRODUCED IN ALABAMA, 1926-1930 The data on quality of Alabama cotton cover the five-year period 1926 to 1930; the data on prices as affected by quality refer to 1926, 1927, and 1928. The data on quality for 1926 and 1927 were based on samples collected by the Alabama Ex- periment Station representing different regions of the State and constituted 0.34 per cent and 0.30 per cent) respectively, of the total crops produced in each of those years. The data on quality for 1928, 1929, and 1930 were based on the grade and staple estimates of the United States Department of AgricultureSamples collected included in each of those years fromn5 to 10 per cent of the total production. TABLE 2.-Percentage Distribution of Staple Length as Determined from 10 Per Cent and 0.3 Per Cent Samples of Alabama Cotton Crop of 1928. Staple length Inches 13/16 and shorter 7/8 15/16 1 and longer Total 24.0 69.7 4.5 1.8 100.0 Per cent 10 per cent samplea 0.3 per cent sampleb 20.6 71.6 7.2 0.6 100.0 aGrade and staple estimates of U. S. Department of Agriculture, Table 28. bBales used in price analysis in this study. Evidence that a sample as small as three-tenths of one per cent may be considered fairly dependable in estimating the relative amounts of leading grades and staples in Alabama was provided by a random selection of 3,595 bales from 7,135 single bales used in the price analysis for 1928. This constituted a sample of 0.3 per cent of the 1928 crop. The results from this smal sample may be compared with those obtained from the 10 per cent sample on which was based the grade and staple estimate of the crop of 1928 made by the United States Department of Agriculture. The differences in results obtained from the larger and smaller samples are relatively greatest for the staple lengths longer than 7/8-inch, which represent a small percentage of the total. For a year to year comparison, therefore, of the percentages of 13/16-inch and shorter and 7/8-inch staple, the samples obtained in 1926 and 1927 appear to be useful. Similarly, the data for 1926 and 1927 should serve to give a fairly reliable picture of the composition of the crops of those years for leading grades. Grade of Alabama Cotton During the period 1926 to 1930, 77 per cent of Alabama cotton= was Middling White and above (Table 3). Ten per cent was White below Middling. Cotton spotted in color amounted to about 12 per cent. Light Yellow Stained, Gray, Blue Stained, and Below Grade cotton for the five-year period averaged less than one per cent of the total crop. Over four-fifths of Alabama cotton was white in color from 1926 to 1930. In general, the grades of the Alabama crop have been good and compare favorably with grades produced in the United States as a whole. Eighty-one per cent of Alabama cotton for 1928, 71 per cent for 1929, and 73 per cent for 1930 was Middling White and above as compared with 72, 66, and 73 per cent, respectively, for the United States. A smaller percentage of white cotton produced in Alabama in 1928, 1929, and 1930 was below Middling than was true of the United States crop. During the same years a larger percentage of Alabama cotton was spotted than for the United States. TABLE 3.--Percentage of Different Grades of Cotton Produced in Alabama, 1926-1930, and in the United States, 1928-1930. Per cent Grade and color 1926a White, Middling and above White, below Middling Spotted, all grades Other grades and colors Total 1927a Alabama 1928b 1929b 1930b United States 1928b 1929b 930b 69.6 12.4 16.5 1.5 100.0 90.0 3.1 6.1 0.8 100.0 81.1c 3.8c 14.7 0.4 100.0 71.4 15.6 11.8 1.2 100.0 73.3c 15.c 11.0 0.6 100.0 72.Oc 15.0c 11.5 1.5 100.0 66.4c 21.1c 10.8 1.7 100.0 72.7c 18.c 8.7 0.6 00.0 aBased on samples collected by Alabama Experiment Station, (Appendix Tables 26 and 27.) bBased on grade and staple estimates of U. S. Department of Agriculture, (Alabama, Appendix Tables 28, 29 and 30). cIncludes Extra White grades. In 1926, 1927, 1928, and 1930, the modal or most common grade was Strict Middling White, which accounted for 30 per cent, 48 per cent, 50 per cent, and 36 per cent, respectively, of the production in those years. In 1929, Middling White was the most common grade, comprising 35 per cent of the total bales. Strict Middling White was second in importance and comprised 33 per cent of the total bales. Staple Length of Alabama Cotton Certain oustanding facts may be noticed with respect to the staple of the Alabama cotton crop. The first is that a large proportion of the crops produced from 1927 to 1930 has fallen below 7/8-inch in staple length, amounting to 45 per cent in 1929 (Table 4). The cotton of a staple length 1 inch or longer did not comprise more than one or two per cent of the total bales sampled in any of the five years for which data were presented. 9 For the five-year period 99 per cent of the Alabama crop consisted of 13/16-inch and shorter, 7/8-inch, and 15/16-inch staple, The staple length of the State's crop suffered considerable deterioration from 1926 to 1930. TABLE 4.-Percentage of Different Staple Lengths of Cotton Produced in Alabama, 1926-1930, and in the United States, 1928-1930. Per cent Staple length Alabama 1926a 1927a 1928b 1929b 1930b United States 1928b 1929b 1930b Inches 13/16 and shorter 7/8 15/16 1 and longer Total 0.7 92.4 6.3 0.6 100.0 14.7 84.3 0.8 0.2 100.0 24.0 69.7 4.5 1.8 100.0 44.8 52.6 2.2 0.4 100.0 38.6 55.4 5.2 0.8 100.0 14.4 41.7 22.8 21.1 100.0 20.1 38.1 18.9 22.9 100.0 13.4 38.8 24.9 22.9 100.0 aBased on samples collected by Alabama Experiment Station, (Appendix Tables 26 and 27). bBased on grade and staple estimates of U. S. Department of Agriculture, (Alabama, Appendix Tables 28, 29 and 30). The staple length of Alabama cotton compares unfavorably with the United States as a whole. During the years 1928, 1929, and 1930, 24 per cent, 45 per cent, and 39 per cent, respectively, of Alabama cotton was 13/16-inch and shorter as compared with 14 per cent, 20 per cent, and 13 per cent, respectively, for the United States. Approximately 22 per cent of the United States cotton crop was 1 inch or longer in staple length for the years 1928, 1929, and 1930 as compared with only about one per cent for Alabama during the same years. Tenderability of Alabama Cotton The relatively large amounts of untenderable cotton in Alabama in 1927, 1928, 1929, and 1930 were due almost entirely to the 13/16-inch staple and shorter produced in those years (Table 5). The fact that cotton is untenderable does not mean that it is not usable or does not have a market. At the same time, the seasonal average discount for 13/16-inch staple increased from 67 points to 108 points.3 A greater proportion of the Alabama crop was untenderable than of the United States crop from 1928 to 1930. Twenty-four per cent of Alabama cotton was untenderable in 1928 as compared with 18 per cent for the United States as a whole. 10 TABLE 5.-Percentage of Untenderable Cotton Produced in Alabama, 1926-1930, and in the United States, 1928-1930 Per cent Tenderability 1926a Untenderable in grade only Untenderable in staple only Untenderable in both: grade and staple Total untenderable Total tenderable Total Alabama 1927a 1928b 1929b 1930b United States 1928b 1929b 1930b 1.8 0.6 0.6 14.5 0.3 23.8 1.2 42.0 1.2 37.0 3.5 12.5 4.1 18.3 2.0 12.8 0.2 0.2 0.2 2.9 1.6 1.8 1.9 0.6 2.6 97.4 100.0 15.3 84.7 100.0 24.3 75.7 100.0 46.1 53.9 100.0 39.8 60.2 100.0 17.8 82.2 100.0 24.3 75.7 100.0 15.4 84.6 100.0 aBased on samples collected by Alabama Experiment Station, (Appendix Tables 26 and 27). bBased on grade and staple estimates of U. S. Department of Agriculture, (Alabama, Appendix Tables 28, 29 and 30). VARIATIONS IN PRICES IN LOCAL MARKETS Variations in Prices for Same Quality Prices paid to farmers for identical classes of cotton were characterized by wide ranges from highest to lowest price. Extreme instances occurred in 1926 of ranges as high as 400 points, and in 1927 and 1928 of about 300 points (Table 6). The average range was 77 points in 1926, 49 points in 1927, and 35 points in 1928 for all instances of the sale of two or more bales of the same grade and staple in the same town on the same day. The narrowing of the ranges from 1926 to 1928 corresponded to the increasing stability of the cotton price level over the three year period. There was no variation in about 17 per cent of the instances during the three years. There seems to be a tendency for buyers to vary their prices at intervals of 25, 50, 75, and 100 points. The 25-point intervals from zero to 100 points for the three years included about 42 per cent of the total number of instances. The ranges were wider for the lower grades than for the higher grades. The average range in 1926 for Good Middling was 50 points, for Strict Middling 75 points, and for Middling 91 points (Table 6). Enough instances of sales of Strict Low Midd- TABLE 6.-Average and Highest Ranges in Prices Paid for Specified Grades of Cotton Sold in the Same Town on the Same Day, 1926-1928. Grade Year 7/8-inch staple G.M. S. M. M. Total or average u G.M. S.M. M. Total or average G.M. S.M. M. i __,, ___ No. of instances of 2 or more bales sold in same town on same day 69 172 144 Per cent of instances where Average range in points 50 75 91 77 Highest range in points 405 350 310 405 105 275 239 275 111 175 310 310 the range was Zero points 21.7 16.9 12.5 16.1 27.6 16.2 15.3 17.4 22.2 17.5 18.8 18. 25 points 11.6 5.8 6.2 7.0 6.9 7.6 6.9 7.7 50 points 10.1 5.8 7.6 7.2 0 7.6 1.4 4.3 6.3 5.6 8.7 I/6.6 75 points 0 3.5 6.2 3.8 6.9 4.8 100 points 5.8 8.1 9.7 Per cent of instances where range was 0, 25, 75, and 100 points 49.2 40.1 42.2 42.4 41.4 38.1 38.8 39.0 34.9 44.2 49.4 f44. 1926 1927 I. I 29 105 72 24 48 60 49 23 31 46 35 6.9 5.8 1.6 3.6 7.1 4. 8.3 0 1.9 8.3 3.8 0 2.8 5.6 3.4 3.4 1928 206 63 394 197 /65 4.8 14.7 9.2 12. Total or average 654 35 310 I 18.3 I I 12. 6. 4. 44.8 12 ling and other low grades were not available to give a significant average range for those grades. A similar tendency for the average range to be wider with the lower grades occurred in both 1927 and 1928. For the three-year period the average ranges for Good Middling, Strict Middling, and Middling were 32 points, 51 points, and 66 points, respectively. The higher grades had a greater percentage of the total instances with no variation in price than did the lower grades. In 1926, the percentage of total instances with no variation in price was 22 for Good Middling, 17 per cent for Strict Middling, and 12 per cent for Middling. There was a similar tendency in 1927 and 1928. The most probable explanaton of the narrower ranges in the better grades appears to lie in the fact that higher grades were more easily identifled as "good cotton" than the lower grades which gave more difficulty in determining their true values. The range tended to increase as the number of bales included in a given instance increased. In 1926, an average range for Good Middling, Strict Middling, and Middling was 51 points for the sale of two bales, 67 points for 3 bales, 85 points for 4 bales, and 117 points for 5 bales. A similar tendency existed in 1927 and 1928 (Table 7). As the number of bales increased a wider sampling of the market was obtained, and a more representative measure of ranges was provided. With the larger number of bales a wider range would be expected, but successive increases in size of sample resulted in smaller increases in the range. An explanation of the wide ranges in farm prices is not to be found in the much smaller daily ranges which occurred on the futures exchanges. The average daily range of quotations on the New York futures exchange from August to December, inclusive, in 1926 was 25 points, and the highest range for any one day was 137 points (Table 8). The average daily range for the same months in 1927 was 47 points. Twice during this period the price varied as much as 200 points which was the limit under the rules of the exchange. Further investigation is needed to determine the causes of these irregular variations in local markets. Probably the leading causes, however, were imperfections such as the following: (1) Lack of accurate knowledge on the part of buyer or seller or both of the true quality and value of the cotton. (2) Necessity of making immediate sales or purchases on the part of buyer or seller. (3) Opportunity of the buyer to make a profit from the farmer on a transaction other than the cotton purchased. (4) Other factors affecting the bargaining power of buyer or seller. The variations in prices paid for the same quality of cotton, as given above, are significant in the problem of paying farmers TABLE 7.-Average Sold Ranges in Prices for Numbers of Bales Indicated of Specified Grades in Same Town on Same Day, 1926, 1927, and 1928. Year Grade 7/8inch G.M. S.M. M. Total or Average G.M. S.M. M. Total or Average G.M. S.M. M. Total or Average _ Number of instances of two or more bales sold in same town on same day 2 bales sold 21 54 56 i i Average range in points 2 bales sold 42 51 59 51 13 36 28 26 21 19 28 I I1- 3 bales sold 16 40 38 i 4 bales sold 7 22 14 i I 5 bales sold 7 Total 51 132 122 i I 3 bales sold 28 78 95 67 23 37 57 39 16 31 45 I 4 bales sold 120 72 62 85 90 49 86 75 35 35 56 42 5 bales sold 51 111 188 117 62 76 86 75 27 31 46 35 All instances 60 78 101 80 47 50 64 54 25 29 44 33 1926 16 14 37 1 9 10 20 7 131 18 31, 27 76 94 43 2 22 9 33 7 48 16 I-I 305 28 83 62 173 49 279 156 484 r I I~ /. II 1927 7 21 16 44 16 87 50 1 1928 I 19 115 80 214 1 29 10 46 153 71 23 1.1 31 14 TABLE 8.--Daily Range in New York Futures, August to December, 1926-1928. Month Month of quotation Future Future delivery month Range in points Average Largest range for range on one day month 116 137 77 34 30 31 33 30 15 17 25 200 200 88 143 58 200 Year Smallest range on one day 10 9 12 4 7 4137 1926 August September October November December August to December August September October November December August to December Oct. Dec. Dec. Dec. Jan. 1927 Oct. Dec. Dec. Dec. Jan. 23 18 21 13 11 11 58 68 48 34 29 47 1928 August September October November December August to December Oct. Dec. Dec. Dec. Jan. 0 13 10 7 7 0165 165 78 47 68 66 46 31 28 24 18 29 for their cotton in accordance with its quality. As will be shown later, such variations were often greater than variations based on differences paid in accordance with quality in central markets. Farmers sometimes receive more than their cotton is worth, and sometimes less. Such a lack of exactness in price making indicates that changes in local marketing methods are needed if farmers are to be rewarded accurately for the grade and staple length of their cotton. Variations in Prices Between Local Markets The average prices paid for cotton of identical quality varied markedly between the different local markets. In 1926, the price levels for 12 towns covered a range of 140 points, in 1927 for 5 towns a range of 67 points, and in 1928 for 10 towns a range of 85 points (Table 9). The relative price levels of different towns were calculated from prices of bales of the most representative grades and staple lengths sold on the same day in respective towns. The town with the lowest price level was used as the base, and its level represented by 0. The levels of the other towns were expressed as the number of points each one was 15 TABLE 9.-Relative Price Levels of Alabama Towns Indicated, 1926, 1927, and 1928. Number of bales Average local market price level Town Number of bales Average local market price level 1926 Town E J C N L B E A H R T U L J 108 80 75 48 109 115 0 53K 82 830 85 92D 1927 M A G 26 18 44 36 255 45 92 92 95 108 120 140 48 41 185 355 233 339 588 381 0 24 24 1928 0 3Q 12 17S 24 C L 100 120 46 67 V N P 334 163 261 169 491 27 31 61 77 85 higher than the base town. Towns with a very small number of bales were omitted. The causes of these differences in price levels cannot be adequately explained from data obtained in this study. Some of the factors which appear to influence price levels are nearness to cotton mills, freight rates, competition among buyers, and the reputation for staple length of the given local market. Freight rates to important cotton consuming centers from each of the local markets had an average range of about 30 points and therefore do not account for a major portion of the variations. PRICE DIFFERENCES PAID FOR QUALITY Different grades and staples of cotton possess different utilities for manufacturing purposes, and accordingly, prices paid by consuming establishments would be expected to vary with quality. The measures used for differences paid-for different qualities were those quoted in central markets. Grade Differences Differences paid to farmers for different grades (7/8-inch staple only) were calculated from prices received by farmers. The Strict Middling grade was used as a basis in making all comparisons because it was the most representative. Prices for given bales were compared only with other bales sold on the same day and in the same town, thereby avoiding errors that 16 might be caused by day to day fluctuations in prices, and possible differences in prevailing price levels in different towns. Averages were calculated for all towns for each season. These average differences were converted from the Strict Middling base to the Middling base in order that they might be compared with central markets differences. According to the grade and staple classifications as given in Appendix Tables 26, 27, and 28, from 31 to 56 classes of cotton were produced in Alabama in 1926, 1927, and 1928. Seven of these classes, however, contain the bulk of the cotton produced in the State, and the bales of these grades having 7/8-inch staple length were used in calculating farmers differences. These grades were Good Middling, Strict Middling (used as basis), Middling, Strict Low Middling, Good Middling Spotted, Strict Middling Spotted, and Middling Spotted. They included, (7/8inch staple), 87 per cent, 84 per cent, and 69 per cent of the State's production in 1926, 1927, and 1928, respectively, according to the samples obtained. The average differences paid for these grades in central markets and in farmers markets, together with the number of bales on which the calculations were based, are shown for each of the three seasons in Table 10, and illustrated graphically in Figure 1. These data indicate a tendency on the part of cotton buyers to pay farmers more for the better grades than for the poorer grades. TABLE 10.-Average Differences Paid Farmers in Alabama and in Central Markets for Grades Indicated, Basis Middling 7/8, 1926-1928. Class 7/8-inch Number of bales 1926 319 782 468 1927 109 449 251 1928 352 2,067 818 Differences paid farmers Number of points Differences paid in central markets Number of points staple G.M. S.M. M. 1926 63 52 Basis 1927 40 37 Basis 1928 14 11 Basis 1926 67 47 Basis 1927 71 47 Basis 23 4 -64 1928 40 26 Basis 23 3 -74 S.L.M. G.M. Sp. S.M. Sp. M. Sp. 178 78 153 101 32 13 18 10 116 240 707 86 -127 30 -43 -145 -46 8 4 - 41 -27 8 0 - 27 6 -18 -101 -76 T99 -77 In 1926, the differences paid farmers were relatively wider in the Spotted grades than in the White grades. For that year, in the White grades, farmers differences showed a trend from 94 per cent of central markets differences for Good Middling to 128 per cent for Strict Low Middling. The trend in the Spotted grades was in the opposite direction and moved from 500 per cent for Good Middling Spotted to 144 per cent for Middling Spotted (Table 11). The crop of 1926 was characterized by a relatively large proportion of low grades as compared with the 17 PO1NT6 ON 7.5 G.M. WHITE. S. M. CJ. M. L, (G. . M SP0TTY.D S. M. M. 25 5 125__ 1 50__ _ _ __ _ _ 19Z. ON' OT5 2(5- GM. J.M. J.L...M. G.,M. J.M. _M__ Midlig /812619 8 18 other two years. Approximately 30 per cent of the crop consisted of White below Middling, and colors other than White, as compared with 10 per cent and 19 per cent, respectively, in 1927 and 1928 (Table 3). In 1927, as in the preceding year, more was paid on the average for the better grades than for the poorer grades. There was the same tendency in 1928 to pay more for the better grades although the differences were narrower than in the other two years. There was a narrowing of differences both in central markets and in farmers markets from 1926 to 1928. Farmers differences, however, narrowed more markedly over this period than central markets differences. The range in differences in central markets from the number of points "off" for Strict Low Middling to the number of points "on" for Good Middling was 166 points in 1926, 147 points in 1927, and 117 points in 1928. The corresponding range in farmers differences for the same grades for the same period was 190 points in 1926, 86 points in 1927, and 41 points in 1928. TABLE 11.-Per Cent Alabama Farmers Differences were of Central Markets Differences for Grades Indicated, Basis Middling 7/8-inch, 1926-1928. Class 7/8-inch staple G.M. S.M. S.L.M. G.M. Sp. S.M. Sp. M. Sp. "off". Per cent 1926 94 111 128 500 239 144 1927 56 79 61 35 a 64 1928 35 42 35 35 0 36 4 points aFarmers difference 4 points "on", central markets difference Ratio of Farmers Grade Differences to Central Markets Differences.-In 1926, the farmers differences were larger than those paid in central markets except for Good Middling in which case the farmers difference was 94 per cent of the central markets differences (Table 11). The ratio of farmers differences to central markets differences was much wider in 1926 than in 1927, and wider in 1927 than in 1928. A possible explanation of the wide differences paid farmers in 1926 is found in the fact that the cotton market was upset by the extremely large crop of that year. The average daily price of Middling in the central markets from September 1 to December 31 had a range from high to low of 6.46 cents. In 1927, the range for the corresponding period was 5.03 cents and in 1928, 2.98 cents. In 1927, the ratio of farmers differences to central markets differences ranged from 35 per cent for Good Middling Spotted to 79 per cent for Strict Middling, except for Strict Middling 19 Spotted for which the farmers received a slight "on" difference as compared with a slight "off" difference. In 1928, unlike the other years, ratios of farmers differences to central markets differences were fairly similar for each of the grades, ranging from 35 per cent to 42 per cent, except for Strict Middling Spotted for which farmers obtained no difference as compared with 3 points "off" in the central markets. In the case of the latter grade, central markets prices were practically identical wth those for Middling and the same was true in farmers markets. Farmers differences for the grades of white cotton in each of the three years were less than those paid in the central markets except for Strict Middling and Strict Low Middling in 1926. Farmers received greater differences for spotted cotton in 1926 than those reported in central markets. In 1927 and 1928, farmers differences for Strict Middling Spotted varied only slightly from central markets differences, but in both years were slightly above the latter. Frequency Distribution of Grade Differences.-Although the average differences paid to farmers, as given in Table 10, indicate definite tendencies on part of buyers to pay farmers more for the better grades than for the poorer grades, they are far from indicating an exact differentiation in the price paid for each individual bale. Instances quite commonly occurred in which the better grades brought lower prices than the lower grades. Although the differences paid for different grades have significance as averages, an examination of the frequency distributions of these differences throws further light on the payment of such differences. The frequency distributions for the most common grades are illustrated in Figures 2, 3, and 4. Some of the bales having extreme differences are not shown. An outstanding characteristic of the distribution of the differences was that they cover an extremely wide range. For example, the differences paid for Good Middling in 1926 ranged from 122 points "off" Strict Middling to 202 points "on" Strict Middling. The differences paid for Strict Low Middling covered the extreme range of from 681 points "off" Strict Middling to 130 points "on" Strict Middling. The range of differences in 1927 was not as great as in 1926, and in 1928 was much narrower than those in either 1926 or 1927. The ranges involve only the two extreme cases, the highest and lowest differences in the given distribution. A more significant description of the distribution is afforded by the standard deviation. The standard deviation is a statistical measure which gives the number of units to be added to and taken from the average in order to obtain a range within which would be included, in a normal distribution, about 68 per cent of the total number of units. For example, the average difference paid for Good Middling in 1928 was 3 points "on" Strict Middling. The stand- TABLE 12.-Ranges and Standard Deviations of Differences Paid in Local Markets in Alabama for Specified Grades, Basis Strict Middling 7/8-inch, 1926-1928. Stand- Year Grade 7/8-inch Number of bales Average difference in points 11 - Range in points ard deviation in points 41.5 79.9 117.8 106.9 Per cent bales included in one standard deviation above and below average difference 84.0 77.1 71.1 72.8 72.6 78.8 81.8 75.5 77.8 77.6 . Per cent bales which sold Above S.M. 50.2 20.3 2.0 16.1 48.7 21.5 53.0 37.1 18.2 31.4 Same as S.M. 13.5 4.9 3.4 3.2 11.9 8.8 11.3 11.9 9.5 16.8 Below S.M. 36.3 74.8 94.6 80.7 39.4 69.7 35.7 51.0 72.3 51.8 1926 G.M. M. S.L.M. 319 S.M. Sp. 1927 1928 ~I\L1~ 468 178 153 109 251 352 818 116 707 52 95 -179 -- 324 584 811 591 242 550 203 394 267 275 G.M. M. G.M. M. S.L.M. S.M. I Il In Sp. - 3 37 3 -11 35.9 60.1 -- 38 11 19.3 37.5 49.8 36.2 I riri1~ C A I ._ I -- I PELR 46'c2/ A/DAL /NCI-%-/AICH BALLS 31$ .YTPICT LOW A/LL/V( %o8/NC/I BALES /73 5 - -/00 -Z~k5LIą 4 Y50 /00 -20*2 /50 -/09 -50 0 150 PERP z CLEN M/DDL/I/ %sINC/ iTA'/CT Y/ADL/A~r BAS 5/53 BALLS 466 '0 '0 -/00 -.50 0 50 3/N/T.5 PONSP0/O FIGURE /00 1926 (Some -200 /50 -1ce 150 differences 0 50 2.-Percentage distributions of differences in prices paid farmers in Alabama for cotton of grades indicated, basis Strict Middling 7/8, of the bales having extreme are not shown). 22 CENT MIDDL/NG BALSD /-/NCHi 25/ NIT -50 -00 -50 POI/NTS 0 50 /00 5 5 - - 150 /00 50 PO/A'T 0 50 /00 FIGURE 3.-Percentage distributions of differences in prices paid farmers in Alabama for cotton of grades indicated, basis Strict Middling 7/8, 1927 (Some of the bales having extreme differences are not shown). ard deviation of the differences was 19.3 points (Table 12). The addition of 19.3 points to 3 points "on," or 22.3 points "on", and the subtraction of 19.3 points from 3 points "on," or 16.3 points "off", gives a range within which actually 82 per cent of the bales were included. This indicates that the distribution was more peaked than normal. Although very few bales were sold at exactly the average differences, it is significant that in the distributions of differences many more bales were sold at certain points along the scale of differences than at other points. For most grades, more bales were sold at a difference of zero, that is, at the same price as Strict Middling, than at any other point. This was especially true of Good Middling in all years and of Middling and Strict Middling Spotted in 1928. In the distributions of differences for Middling, Strict Low Middling, and Strict Middling Spotted in 1926, and for Strict Low Middling in 1928 more bales were centered around 50, 75, 150, and 200 points "off" than any other point in the distributions of differences. This indicates that differences were made in terms of cents, half cents, or quarter cents; for example, 13.9 per cent of Strict Low Middling bales in 1928 brought a difference of 75 points "off" Strict Middling which was a larger percentage than I7[ GOO0 M/DDL/A'45 -INCH ?% BALES35,32 ST!'/C T LOWv. 116 IMIDDLINAI r-/NCHl BALES i , i I-i I I, o I -ioo -5o O So 0S00/00 5 L /00 -50 Po/IV TS PQ/N75 M/ODL /NG /NCI/ 8/8 BALfS STRICT M/mD/iI' SPOTTiD -/NCH 15 54 LE5 707 io s 0 C /oo 50 hill -10 p0/hITS f7 Pao5C-wrs _ 0 y /M FIGURE 4.-Percentage distributions of differences in prices paid farmers in Alabama for cotton of grades indicated, basis Strict Middling 7/8, 1928 (Some of the bales having extreme differences are not shown). 24 for any other difference. This difference was almost identical with the average difference quoted in central markets for the difference of Strict Low Middling, which was 77 points "off" Middling. This suggests that farmers were more often paid differences for Strict Low Middling than for any other grade. Although the wide dispersion of the differences might appear to destroy the significance of the average differences, as calculated, there was unmistakable evidence of the payment for individual bales of certain amounts "off" for Middling, Strict Low Middling, and Strict Middling Spotted. Staple Premiums and Discounts Differences paid to farmers for different staple lengths were calculated from a base of 7/8-inch staple. Comparisons were made only of bales of the same grade sold in the same town on the same day. Eight tenderable grades were used for this purpose. Averages were calculated for all towns for each season. Central markets differences for staple in 1926 and 1927 were reported in terms of monthly averages for Middling White cotton. In calculating the central markets differences for the bales used in this study for those two years, the differences quoted for Middling were used. In 1928, central markets differences for staple were quoted separately for each grade and the central markets differences were calculated on that basis. Staple differences paid to farmers in Alabama and in central markets are given in Table 13. TABLE 13.Average Differences Paid Farmers in Alabama and in Central Markets for Staple Lengths Indicated, Basis 7/8-inch, 1926-1928. Staple length Number of bales Differences paid farmers Number of points 1928 1926 1927 -24 1 a -10 a b -1 1 2 Differences paid in central markets Number of points 1926 1927 1928 -100 61 -83 -54 28 82 Inches 13/16 15/16 1 1926 15 135 a 1927 87 a b 1928 1,202 412 25 aNumber of bales too small for significant results. bNo data. During the three years of the study, 99 per cent of the Alabama crop was composed of 13/16-inch, 7/8-inch, and 15/16-inch cotton. Cotton of 1 inch staple and longer constituted such a very small proportion of the crop that the number of bales available for determining the differences, if any, paid for these longer lengths was too small for reliable results. In 1926, a year characterized by wide variations in prices and in grade differences, farmers received a premium of only one point for 15/16-inch over 7/8-inch, whereas a premium of 61 25 points was paid in central markets. An average premium of one point was paid farmers for 15/16-inch cotton in 1928. There was no evidence in these data that distinction was made in local markets between 7/8-inch and 15/16-inch cotton in purchases from farmers. In 1926 and 1928, premiums of 61 points, and 28 points, respectively, were paid in central markets for 15/16-inch cotton. Interest in quality of the Alabama cotton crop is centered in the large amount of cotton shorter than 7/8-inch in staple length. The average discount paid farmers for 13/16-inch and shorter amounted to 24 points for 15 bales in 1926, 10 points for 87 bales in 1927, and one point for 1,202 bales in 1928. These data indicate a slight tendency in 1926 and 1927 to pay discounts for 13/16-inch and shorter, but the large sample obtained in 1928 showed no such tendency. In 1926, the range from the discount paid in local markets for 13/16-inch and shorter to the premium for 15/16-inch amounted to 25 points, as compared with 161 points in central markets. In 1928, the corresponding range in local markets was 2 points as compared to 82 points in central markets. The highest average discount paid in central markets for Middling 13/16-inch cotton in any month from August, 1924, the earliest date for which quotations are available, to April, 1930, was 150 points, which prevailed from August to December, inclusive, in 1925; in December, 1929; and in January, 1930.3 The lowest average monthly discount was 50 points from August to October, inclusive, in 1924, and from August to October in 1928. The yearly average discount ranged from 67 points in 1928-29 to 125 points in 1925-26. No quotations were available as to discounts paid for 3/4-inch staple or shorter in central markets. Some of the bales of cotton used in this study were shorter than 13/16-inch in staple length, but only discounts applying to 13/16-inch were used for those lengths. Except for the discounts paid for 13/16-inch staple and shorter in 1926 and 1927, which were 24 and 12 per cent, respectively, of central markets discounts, the discounts paid farmers for 13/16-inch and shorter and premiums paid for 15/16-inch formed an insignificant portion of the differences paid in central markets (Table 14). The data afforded by the present study indicate that no such marked premiums and discounts were paid for staple length to farmers in Alabama as were paid in central markets. Very little distinction, if any, was made between 13/16-inch and shorter, 7/8-inch, and 15/16-inch staple, in the purchase of individual bales from farmers in 1926, 1927, and 1928. Frequency Distribution of Staple Premiums and Discounts.A study of the frequency distribution of staple differences also shows that no marked premiums or discounts were paid to farmers in Alabama for staple length. The frequency distributions 26 TABLE 14.-Per Cent Farmers Differences in Alabama were of Central Markets Differences for Staple Lengths Indicated, Basis 7/8-inch, 1926-1928. Staple length Inches 13/16 15/16 1 bNo data. Per cent 1926 24 2 a 1927 12 a b 1928 2 4 2 aNumber of bales too small for significant results. of staple differences for 15/16-inch in 1926, for 13/16-inch and shorter, and 15/16-inch in 1928 are illustrated in Figure 5. Some of the bales having extreme differences are not shown. Approximately 46 per cent of the bales of 13/16-inch staple and shorter sold at prices above and 41 per cent sold at prices below 7/8-inch staple in 1928. The tendency was for staple differences to group around the zero point. More than twice as many bales were bought at the same price as 7/8-inch than at any other price. If a tendency had existed in local markets to pay discounts for 13/16-inch staple, the bales of that staple length would have centered around those points in the distribution of differences. The tendency of the staple differences for 15/16-inch in 1928 to center around the zero point was similar to that of 13/16-inch and shorter. The staple differences for 15/16-inch staple in 1926 did not center about the zero point as they did for that length in 1928. A factor affecting the distribution of differences in 1926 much more than in 1928 was the rapid decline in cotton prices, causing wide variations in prices on the same day. The range for 13/16-inch staple and shorter in 1926 varied from 181 points below 7/8-inch to 167 points above 7/8-inch or a total of 348 points (Table 15). In 1928, the range for 13/16inch and shorter and 15/16-inch, respectively, varied from 242 points and 252 points above to 135 points and 143 points below 7/8-inch. The variability in the staple differences was great as shown by the standard deviations of staple differences which were 46.7 points for 13/16-inch and shorter in 1926, 30.7 points for 13/16-inch and shorter, and 30.4 points for 15/16-inch in 1928. 27 PER/ CENAT IC STAPLE 6-WCH-1Q926 /35 SAL 65 5- 5 /00 -50 0 PO/NT5 50 /00 /50 T5V 577/PL E '/A/c//H/928 BA LE5 /z202 5~ 5 -/00 -W 0 0 o/00 150 PE, CEAI TP0/YES 37T/PLE ' /6oIA-/I /928 54/2 BALES ii I i I. I 0/T IIIIII /00 /00 oI~I~l FIGURE 5.-Percentage distributions of differences in prices paid farmers in Alabama for cotton of staple lengths indicated, basis same grade 7/8-inch staple, 1926 and 1928 (Some of the bales having extreme differences are not shown). TABLE 15.-Ranges and Standard Deviations of Differences Paid in Local Markets in Alabama for Specified Staple Lengths, Basis 7/8-inch, 1926 and 1928. Average Number difference Range Staple Standard devia- Per cent bales included in one standard devia- Per cent bales which sold Above 7/8inch 37.0 46.3 49.3 Same as 7 / 8inch 13.3 12.7 11.9 Below 7/8inch 49.7 41.0 38.8 Year length Inches of bales in points in points tion in Points 46.7 30.7 30.4 tion above and below average difference 73.1 83.1 84.8 1926 1928 1928 15/16 13/16 and shorter 15/16 135 1,202 412 1 -1 1 348 377 395 TABLE 16.-Per Cent of Bales Classed by Local Buyer, Above, the same as, or Below Government Class, 683 Bales, Four Alabama Towns, 1926. Government class Per cent of bales graded by buyer Grade 7/8-inch staple 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. Total No. of bales 124 219 179 104 49 Two grades above One grade above Same grade 3.2 19.2 18.4 23.1 30.6 62.5 18.0 One grade below 59.7 61.1 65.4 60.6 63.3 12.5 61.5 Two grades below 31.5 17.4 14.5 13.4 2.0 Three grades below 5.6 1.3 1.1 1.0 Four grades below Total 0.5 0.6 2.1 1.9 2.0 25.0 0.1 1.0 0.5 100.0 100.0 100.0 100.0 100.0 100.0 8 683 17.3 1.9 0.2 100.0 29 LOCAL BUYERS AND GOVERNMENT CLASSIFICATION In general, satisfactory records indicating the buyers classification of cotton, as purchased from farmers, were not available. Even when records of grades of cotton purchased appeared on buyers books, it was not always clear as to whether these grades were used in buying cotton from the farmers or whether they were made later by the buyers for purposes of selling the cotton. In four towns in 1926, data were obtained from buyers as to their classification of 706 bales, and in one town in 1928 for 817 bales. A summary of the government and buyers classification of these bales are shown in Table 18 and Appendix Tables 31 and 32. A comparison of the government classification with the buyers classification for the four towns in 1926 shows that the government placed these bales in 27 different classes, whereas the buyers placed them in 14 grades. The government classed 683 bales, 7/8-inch staple; 11 bales, 13!16-inch and shorter; and 12 bales 15/16-inch. The buyers classification involved no staple classification, at least as far as available records indicated. Only 3 bales out of each hundred, however, according to government classification, were other than 7/8-inch staple length. The government classification of the bales included 15 grades and the local buyers classification 14 grades for the bales with 7/8-inch staple length. The buyers grading centered around one grade below the government grade. The deviations were about equally above and below the central tendency (Tables 16 and 17). In 1926, 62 per cent of the bales was graded by buyers one grade below the government grade. In 1928, buyers graded approximately 57 per cent of the bales one grade below the government grade. In comparing buyers grades with government grades, it was assumed that the Spotted grades were equivalent to the next lowest White grade, and Yellow Tinged grades equivalent to white cotton of two grades below. Thus, S.M. Sp. was considered "the same as" M.; S.M. Y.T. "the same as" S.L.M. TABLE 17.-Per Cent of Bales Classed by Local Buyer Above, the Same As, or Below Government Class, 646 Bales, One Alabama Town, 1928. Government class Grade 7/8-inch staple G.M. S.M. & G.M. Sp. M. & S.M. Sp. S.L.M., M. Sp. & M. Y.T. Total No. of bales 10 354 245 37 646 grade above Per cent of bales graded by buyer One Same grade grade below 10.0 75.7 38.0 24.3 57.4 One grades below 80.0 13.3 2.8 Two grades below 10.0 Three Total 0.8 8.1 0.8 11.0 58.4 67.6 32.0 100.0 100.0 100.0 100.0 9.6 0.2 100.0 30 More bales were graded by buyers the same as the government grades in the low grades than in the high grades (Tables 16 and 17). In 1926, 18 per cent of Middling and equivalent grades was graded the same as the government grade, as compared with 62 per cent of Strict Good Ordinary and lower grades. There was a tendency on part of buyers not to place cotton in the higher grades. Out of 706 bales, the government classed 6 bales Strict Good Middling whereas local buyers did not use this grade at all (Appendix Table 31). The government classed 124 bales Good Middling, as compared with the buyers 5 bales; and 182 bales Strict Middling as compared with 126 bales. On the other hand, the government graded 122 bales Middling and the buyers graded 198 bales Middling. The government graded only 69 bales Strict Low Middling and 34 bales Low Middling; the buyers placed 174 bales and 104 bales in those grades, respectively. The government placed 155 bales in the Spotted grades, whereas local buyers placed only 29 bales in those grades. Seven bales were placed in Yellow Tinged grades by the government whereas the buyers placed 15 bales in those grades. TABLE 18.-Percentage of Bales Placed in Different Staple Lengths by Government Classification in Alabama, Four Towns in 1926, and One Town in 1928. Staple length Four towns, 1926 One town, 1928 Inches 13/16 7/8 15/16 1 1 1/8 Total Bales 11 683 12 Per cent 1.6 96.7 1.7 Bales 120 646 46 4 1 817 Per cent 14.7 79.1 5.6 0.5 0.1 100.0 706 100.0 Probably the point of greatest significance with respect to government and local buyers grades is that cotton was not classifled according to staple in local markets. The identification of bales of 13/16-inch and shorter in local markets, while not as important in 1926 as in subsequent years, because of the low percentage of such cotton in 1926, is a step of primary importance if the quality of individual bales is to be reflected accurately in prices in local markets. The fact that about 80 per cent of the bales were graded by the local buyers below government grades, was probably not as significant as the fact of the large percentage of error in the classification of this cotton, if we may assume perfect or nearly perfect accuracy in the government classing. If the buyers had graded each bale one grade below the government grades, both the government and buyers grades would have shown comparable differentiation in quality. These 31 facts point to the need of improvement in classification of cotton so that dependable, uniform measures of quality as to both grade and staple may be obtained in local markets. SELLING IN ROUND LOTS Data were obtained on 3,041 bales of cotton sold in round lots. Data were not available showing the extent of selling in round lots. In town N, an important market in central Alabama, a summary of records of all cotton purchased by leading buyers covering 7,663 bales in 1926 and 8,308 bales in 1927, indicated that 75 per cent in 1926, and 83 per cent in 1927, were sold in round lots. A large proportion of the single bales were sold in the early part of the marketing season. In 1926, round lot sales after January included 95 per cent and in 1927, 97 per cent of all bales purchased. These figures cannot be said to be representative of the State as a whole in the absence of data from other towns. In this method of selling, the average quality of the lot was often considered instead of each bale being sold on its individual merit. In some instances of round lot buying the round lot price was calculated by merely averaging the prices of individual bales. No data are available to show the extent of the two methods of determining round lot prices. Since the government classification was obtained for each bale in the round lots studied, it was possible to determine a price at which each bale would have sold individually if priced according to prices and differences quoted in central markets. Comparison of the average spreads of round lot bales and single bales offered the most readily available means of comparing the relative profitableness of the two methods of selling. In each of the three years studied the round lot prices showed a narrower average spread than the single bale prices, the average spread of the former being 20 points lower than the latter (Table 19). This indicates a profit of $1.00 per bale as a result of selling in round lots. Although the round lot method of selling may obscure the quality of superior bales, it also may obscure the quality of inferior bales. That method, however, appeared to be to the farmers advantage, as compared with selling in single bales. A factor to be considered in round lot sales is the desirability from the buyers standpoint of purchasing as many bales in one transaction as possible. The costs of the transaction in the purchase of ten bales would not be ten times as great as the costs involved in the purchase of a single bale. Such a condition would presumably induce the buyer to pay a greater price to obtain the larger amount of cotton. Therefore, the farmer has greater bargaining power when he can offer for sale several bales at one time. 32 TABLE 19.-Comparison of Spreads for 11,413 Bales of Cotton Sold as Single Bales and 3,041 Bales Sold in Round Lots, Alabama, 1926, 1927, and 1928. Single Bales Year Number of bales 3,052 1,226 7,135 Farm price Central markets price 13.17 20.64 18.41 Spread 1926 1927 1928 11.46 20.11 17.92 Round lot bales 171 53 49 1926 1927 1928 276 904 1,861 12.51 19.91 18.29 13.92 20.25 18.66 141 34 37 Single and round lot bales 1926 1927 1928 3,328 2,130 8,996 11.55 20.02 17.99 13.23 20.47 18.46 168 45 47 SPREADS BETWEEN FARM AND CENTRAL MARKETS PRICES The average farm price for bales sampled of both single and round lots of the 1926 crop was 11.55 cents per pound. The corresponding central markets price was 13.23 cents per pound, giving a plus spread of 168 points. In 1927, the farm price was 20.02 cents per pound, as compared with the central markets price of 20.47 cents per pound, giving a plus spread of 45 points. In 1928, the farm price was 17.99 cents per pound as compared with 18.46 cents, giving a spread of 47 points. The average spreads for 1927 and 1928 were almost identical while the spread in 1926 was more than 100 points greater than that in 1927 or 1928. Apparently the wide spread in 1926 was associated with the demoralized condition of the market during that season in which the price declined steadily from August to December. Similar conditions did not prevail in the other two years. The spread between farm and central markets prices, which represented such costs as transportation, storage, and other handling charges, was not a constant quantity. The spreads not only varied from season to season but varied within the same season. In 1926 and in 1927, the spread between farm price and central markets price was the largest during the peak of the marketing season (Table 20). The spread widened from August to October then narrowed in January. This means that the farm price weakened in the early part of the season and became relatively stronger in the latter part of the season. In 1928, the spread 33 TABLE 20.-The Average Monthly Spread Between Farm Price and Central Markets Price, Strict Middling 7/8, Alabama, 1926, 1927, and 1928. Year Aug. 1926 1927 1928 115 17 87 Sept. 137 53 58 Spread in points Oct. Nov. 172 93 45 167 78 82 Dec. 164 29 97 Jan. 135 10 67 narrowed from August to October and showed a tendency to widen from October to January. The farm price in that season was stronger in the first part of the season and weaker in the latter part of the season. ECONOMIC ASPECTS OF VARIETIES Varieties Grown by Farmers Data were obtained from farmers in six counties as to the variety of cotton grown, and the yield per acre. Government classification was obtained for at least a portion of the bales produced by each farmer. A summary of varieties grown by farmers is shown in Table 21. In North Alabama, Half and Half was the principal variety grown. Cook varieties, doubtless of the wilt-resistant strains, predominated in South Alabama. For the State as a whole, the comparatively short staple varieties were widely grown. Varieties supposed to produce 1 inch staple or longer were of minor importance. The group of so-called 1 inch staple or longer contained many bales which had a staple of 7/8-inch (Table 22). No records were included under the specific variety groups if the farmer did not say he had pure seed. Pure seed included only seed obtained from a reliable source, kept separate at the gin, and not reproduced for more than two years from the same stock. There seems to be a distinct relation between variety, as reported by farmers, and the staple as determined by the government classification. Thus 36 per cent of the bales of the Half and Half group was shorter than 7/8-inch as compared with 10 per cent of the Cook group, 4 per cent of the Cleveland group, and 2 per cent of the 1 inch staple and longer group (Table 22). The data on yield per acre were not significant in view of the fact that local conditions of soil, fertilizer, and other factors varied so much as to render obscure the net effect of variety on yield. In view of the lack of differentiation in prices according to staple length in local markets, the value per acre varied directly with yield of lint per acre. For a study of the various factors affecting the profitableness of varieties, we must depend on the results of experimental tests. The data from farmers, however, tend to indicate that they have found generally most profit- TABLE 21.-Number and Percentage of Different Varieties of 3,374 Produced in Six Alabama Counties, 1928. Number of Bales M Mar- GenMadi- Lauder- Bales of Cotton Per cent Six Variety group Tallapoosa poosaties engo eva son dale coun- Tallapoosa Marengo Geneva Madison Lauderdale counties Half and Half Cook Varieties Cleveland Misc. Short Staplea Total Short 22 255 25 100 402 9 45 456 18 252 120 51 441 4 199 644 155 117 69 71 412 10 85 507 2 257 12 15 286 2 78 366 346 114 93 5 558 17 209 784 568 1 0 1,111 996 319 249 2,675 42 657 3,374 5 56 5 22 88 2 10 100 3 39 18 8 68 1 31 100 30 23 14 14 81 2 17 100 1 70 3 4 78 1 21 100 44 14 12 1 71 2 27 100 92 0 0 1 93 0 7 100 33 30 9 7 79 1 20 100 7 576 0 41 617 Staple Inch Staple and longerb Mixed and Unknownc Grand Total aHeavy Fruiter, Broadwell, Simpkins, Double Jointed, Rucker, King, Sikes, Toole, Addison, Poulknot. bVarieties supposed to produce inch staple or longer. cIncludes bales of varieties unknown to farmers and bales of known mixed varieties. TABLE 22.-Staple Length and Percentage Distribution of 3,363 Different Varieties Grown in Alabama, 1928. Number of Bales Variety group Half and Half Cook Cleveland Misc. Short Staplea Total Short Staple Inch Staple and longerb Mixed and Unknownc Total All Staple Bales of Cotton of Per cent 13/16 402 98 14 15 529 1 63 593 ii and shorter 7/8 660 817 261 206 1,944 33 525 2,502 15/16 46 75 40 24 185 5 60 250 1 or longer 1 4 1 4 10 2 6 18 Total 1,109 994 316 249 2,668 41 654 3,363 13/16 36 10 4 6 20 2 10 18 and shorter 7/8 60 82 83 83 73 81 80 74 15/16 4 8 13 10 7 12 9 7 1 or longer 0 0 0 1 0 5 1 1 Total 100 100 100 100 100 100 100 100 alleavy Fruiter, Broadwell, Simpkins, Double Jointed, Rucker, King, Sikes, Toole, Addison, Poulknot. bVarieties supposed to produce inch staple or longer. cjncludes bales of varieties unknown to farmers and bales of known mixed varieties. LV 36 able the short staple varieties with high yields and high percentage of lint. Results of Experimental Tests of Varieties In the light of present technology, the only way in which the staple length of the Alabama crop can be lengthened is by substituting varieties having longer staples than those now generally grown. So far as is definitely known, no improvement in staple length may be obtained by changing methods of fertilization or cultural practices. Data on yield per acre and staple length of the different varieties have been reported by the Alabama Experiment Station from tests covering the five-year period, 1926 to 1930. As a measure of the relative profitableness of these varieties a value per acre of lint was calculated. The expression "value per acre" as used in this discussion always refers to value of lint and does not include value of seed. The average farm price of cotton in Alabama from 1926 to 1930, which was 14.69 cents, was used in calculating the acre values of the different varieties. The acre value was calculated in two ways, first, the value per acre using no staple differences, and second, the value per acre using the average staple premiums and discounts paid in central markets from 1926 to 1930. The average discount in central markets for 13/16-inch was 93 points. The premium for 15/16-inch was 45 points, for 1 inch 96 points, for 1 1/16 inches 161 points, and for 1 1/8 inches 246 points. No adjustment was made for picking and ginning costs of different varieties. The extra costs of ginning and picking the varieties with a small percentage of lint were mostly offset by increased value of the seed of such varieties. The varieties with a high gin turnout have important advantages such as permitting prompter harvesting and reducing harvesting requirements, but these were not measured in this study. The varieties have been ranked in order of their value without staple differences, since the present study has indicated generally a lack of differentiation in prices paid farmers for staple lengths of 1 inch and shorter, and data were not available for staple lengths longer than 1 inch. However, the value per acre adjusted for staple premiums and discounts should be considered since farmers can obtain premiums and discounts for staple lengths through the cooperative marketing associations. Since varieties differ in their adaptability to different regions of Alabama, they have been placed in three general groups, North Alabama, Central Alabama, and South Alabama. Varieties in South Alabama and in portions of Central Alabama need to be wilt-resistant and in this group those varieties which were best suited to the wilt lands of these sections have been included. Results of the Experiment Station tests for the fiveyear period showed considerable variation in staple length and 37 yield per acre from one section of the State to another. Varieties ranking high in farm value per acre in one section were sometimes low in another section of the State. In North Alabama out of 16 varieties tested for five years, Cook 1010 (Williamson) had the highest average value per acre when staple differences are not considered (Table 23). This variety yielded 368 pounds of lint per acre and had a staple length of 13/16-inch, the shortest of any of the varieties tested for this area. D. P. L. 4-8 and Trice, both averaging a staple length of 15/16-inch, ranked second and fourth, respectively, in value per acre. Cook 1627, which had a staple length of 7/8-inch, ranked third and Delfos with a staple length of 1 1/16 inches ranked fifth in value per acre. The order of the varieties was changed considerably when ranked according to acre values adjusted for staple premiums and discounts paid in central markets. Delfos ranks first with D. P. L. 4-8 a close second. Delfos has the disadvantage of being more expensive to pick than the other varieties mentioned. Cook 1010 (Williamson) which was first in value per acre without staple difference drops to sixth place. When no staple differences were paid, Cook 1010 (Williamson) was worth $1.03 more per acre than D. P. L. 4-8, but when the discount of 93 points was given Cook 1010 (Williamson) and the premium of 45 points was given D. P. L. 4-8, the latter was worth $4.02 per acre more than the former. According to staple premiums and discounts, D. P. L. 4-8 was worth an average of 1.38 cents per TABLE 23.-Cotton Varieties Tested for North Alabama Ranked from Highest to Lowest Average Value of Lint Per Acre without Staple Differences, 1926-1930. (Alabama Experiment Station). Staple Variety length 1/32inch 27 31 29 31 34 29 28 29 29 28 30 32 28 32 32 36 Yield per acre Pounds lint 368 361 352 349 348 346 338 332 332 328 323 319 316 308 300 267 Value per acre Without staple differences 54.06 53.03 51.71 51.27 51.12 50.83 49.65 48.77 48.77 48.18 47.45 46.86 46.42 45.25 44.07 39.22 With staple differences 50.64 54.66 51.71 52.84 56.72 50.83 49.65 48.77 48.77 48.18 48.90 49.92 46.42 48.20 46.95 45.79 Cook 1010 (Williamson) D. P. L. 4-8 Cook 1627 (Smith) Trice Delfos Bottoms Cook 307 (Rhyne) Cleveland (Piedmont) Dixie Triumph (Watson) Cook 588 College No. 1 Cleveland (P. S. Co.) Cleveland (Wannamaker) Acala No. 5 Mexican Big Boll Webber Delta Type 38 pound more than Cook 1010 (Williamson). If such a difference in price were paid to farmers consistently for individual bales, greater interest would develop in D. P. L. 4-8. Trice ranked third and Cook 1627 ranked fourth in value per acre with staple differences included. All the varieties with 1 inch staple and longer, except Delfos, ranked comparatively low in acre value. The payment of staple premiums does not improve the acre value of these varieties enough to offset their low acre yields. The Webber Delta Type variety, which averaged a staple length of 1 1/8 inches, would have to be paid a premium of 578 points to equal D. P. L. 4-8 in value per acre. This premium would be 332 points more than the premium paid in central markets. Half and Half, the most commonly grown variety in North Alabama was tested for only two years, 1929 and 1930. On the basis of the two year tests, (using the five-year average price per pound and staple differences) this variety ranked third in value per acre without staple differences and ninth with staple differences out of 27 other varieties tested. Rucker made outstanding yields in the tests in 1929 and 1930, ranking first and yielding 396 pounds of lint per acre as compared with 378 pounds for Cook 1010 (Williamson), 362 pounds for Half and Half, and 359 pounds for Cook 307 (Rhyne). Rucker, which had a staple length of 25/32-inch, still ranked first in value of lint per acre when discounted 93 points, the central markets average difference for 13/16-inch. If quotations on discounts for 25/32-inch had been available, the acre value of Rucker would have been still lower. The yield of lint per acre of Rucker was so much larger than other varieties that the discount paid in central markets for 13/16-inch would have to be increased by 63 points to reduce Rucker to the same level of profitableness as its nearest competitor in the two year test, namely, Cook 1010 (Williamson). Again, on the basis of the two year tests, a price of 2.42 cents per pound more would have to be paid for D. P. L. 4-8 than for Rucker to make the two varieties equally profitable. In Central Alabama, D. P. L. 4-8 with a staple length averaging 15/16-inch and with a yield of lint averaging 431 pounds per acre led the list in farm value of lint per acre (Table 24). This variety was followed by five varieties having a staple length of 7/8-inch. Seven other varieties which had staple lengths of 15/16-inch or longer were lowest in values of lint per acre and also were relatively low in yields. None of the varieties tested in Central Alabama for the five-year period had a staple length below 7/8 inch except Cook 1010 (Williamson) which ranked seventh in value of lint per acre. The rank of the varieties was not changed materially when values of lint per acre included central markets premiums and discounts, except for Cook 1010 (Williamson) which moved from seventh to thirteenth place and Delfos which moved from twelfth to seventh place. Delfos, 39 TABLE 24.-Cotton Varieties Tested for Central Alabama Ranked from Highest to Lowest Average Value of Lint Per Acre without Staple Differences, 1926-1930. (Alabama Experiment Station). Staple length 1/32inch 31 29 29 28 28 28 27 29 29 31 31 34 30 32 32 37 Yield per acre Pounds lint 431 422 422 419 415 406 390 388 387 378 371 361 350 339 334 318 Value per acre With Without staple staple differences differences 63.31 61.99 61.99 61.55 60.96 59.64 57.29 57.00 56.85 55.53 54.50 53.03 51.42 49.80 49.06 46.71 65.25 61.99 61.99 61.55 60.96 59.64 53.66 57.00 56.85 57.23 56.17 58.84 52.99 53.05 52.27 54.54 Variety D. P. L. 4-8 Dixie Triumph (Watson) Cook 1627 (Smith) Cook 588 Cook 307 (Rhyne) Cleveland (Piedmont) Cook 1010 (Williamson) Cleveland (Wannamaker) Bottoms Trice Cleveland 884 (P.S.Co.) Delfos College No. 1 Mexican Big Boll Acala No. 5 Webber Delta Type which had a staple length of 1 1/16 inches would have to be paid a premium of 339 points for staple, or 178 points more than that paid in central markets to equal D. P. L. 4-8 in value per acre. In order to obtain the highest yields in South Alabama and in many sections of Central Alabama wilt-resistant varieties must be grown. Nine wilt-resistant varieties were tested for the five-year period 1926 to 1930 (Table 25). The three highest ranking varieties in value per acre were Cook 307 (Rhyne), Dixie Triumph (Watson), and Toole Council, all of 7/8-inch staple length. All varieties used in the tests had a staple length of 7/8-inch staple or shorter except Super 7 which had a staple length of 1 1/32 inches. Super 7 ranked lowest in value per acre with a yield of 307 pounds of lint per acre as compared with 391 pounds for Cook 307 (Rhyne). The rank of the wilt-resistant varieties did not change materially when the value per acre was adjusted for central markets staple differences. Super 7, ranking ninth in local market value per acre, moved to only eighth place when central markets premiums were added. This variety was worth $9.39 per acre less than Cook 307 (Rhyne) after adding the staple premium paid in central markets. A staple premium of more than 402 points would have to be paid before Super 7 would rank the highest in value per acre. This premium would be 306 points more than was paid in central markets. None of the wilt-resistant varieties tested in South and Central Alabama had both a high yield and a staple length longer than 7/8-inch. 40 TABLE 25.-Wilt-Resistant Varieties Tested for Central and South Alabama Ranked from High to Lowest Average Value of Lint Per Acre without Staple Differences, 1926-1930. (Alabama Experiment Station). Staple length 1/32inch 28 28 28 27 28 28 27 28 33 Yield per acre Pounds lint 391 387 384 367 364 358 340 337 307 Value per acre With Without staple staple differences differences 57.44 56.85 56.41 53.91 53.47 52.59 49.95 49.51 45.10 57.44 56.85 56.41 50.50 53.47 52.59 46.78 49.51 48.05 Variety Cook 307 (Rhyne) Dixie Triumph (Watson) Toole Council Cook 307 (Bridges) Lewis 63 Toole (Petty) Cook 588 Kelly Big Boll Super 7 The data presented serve to show from the individual farmers point of view that the shorter varieties-are often the more remunerative than the longer staple varieties when no staple differences are paid for individual bales. The D. P. L. 4-8 variety shows up well in North and Central Alabama both in yield per acre and staple length. Farmers may grow more cotton of such varieties as D. P. L. 4-8 if they are paid large enough premiums for 15/16-inch and 1 inch staple lengths making the varieties of staple lengths shorter than 7/8-inch, such as Rucker and Half and Half, less profitable. As long as the same price is paid for all staple lengths in local markets, farmers in Alabama may find it most profitable to continue to grow the varieties with shorter staple length and higher yields per acre. 41 SUMMARY 1.-The grade of Alabama cotton from 1926 to 1930 compared favorably with the grade of cotton produced in the United States as a whole. 2.-There was a definite tendency on the part of cotton buyers to pay farmers more for the better grades than for the poorer grades. 3.-Thirty-six per cent of Alabama cotton from 1928 to 1930 had a staple length shorter than 7/8-inch, as compared with 16 per cent of the United States crop. 4.-Very little distinction, if any, was made between 13/16inch and shorter, 7/8-inch, and 15/16-inch staple in the purchase of individual bales from farmers in Alabama in 1926, 1927, and 1928. 5.-Improvement in classification of cotton in local markets so that dependable, uniform measures of quality may be obtained as to both grade and staple is a fundamental consideration in the problem of paying farmers for cotton in accordance with quality. 6.-Prices paid to farmers for given grades and staple lengths sold in the same town on the same day were characterized by wide ranges indicating serious imperfections in local markets. Prices of the same qualities varied widely from town to town. 7.-One dollar more per bale was received by farmers selling in round lots than by those selling in single bales. 8.-The economic reward for high yields per acre was a more important factor influencing the variety of cotton grown by farmers than the reward for staple length. 9.-The payment of staple premiums and discounts for individual bales is necessary before farmers will select varieties on the basis of staple length instead of only on the basis of yield of lint per acre and gin turnout. REFERENCES 'Palmer, A. W., Commercial classification of American cotton, United States Department of Agriculture, Circular No. 278. 2 United States Department of Agriculture, Bureau of Agricultural Economics, Service and Regulatory Announcement No. 124, "Regulations of the Secretary of Agriculture under the United States Cotton Futures Act." and Markets, United States Department of Agriculture, June, 1931. 'Crops APPENDIX TABLE 26.-Grade, Staple Length, and Tenderability of 5,047 Bales of Cotton Produced in Alabama, 1926. Bales GRADE Per cent 1 and longer 0.5 a 0.1 0.3 0.1 WHITE, TOTAL S.G.M. G.M. S.M. M. S.L.M. L.M. *S.G.O. * G.O. X13/,16 and shorter 22 2 6 3 6 1 2 2 11 3 4 4 : 7/8 . ____ 15/16 290 3 100 134 43 8 Staple in Total 4,136 27 928 1,528 1,028 485 114 19 7 834 192 385 203 50 4 65 14 31 13 7 land longer 25 1 7 13 inches *13/16 and shorter 0.4 a 0.1 0.1 0.1 a a a 0.2 a 0.1 0.1 7/8 75.3 0.5 16.4 27.4 19.2 9.2 2.2 0.3 0.1 15.7 3.6 7.2 3.8 1.0 0.1 1.3 0.3 0.6 0.3 0.1 a a 0.1 a 0.1 92.4 15/16 5.8 a 2.0 2.7 0.8 0.2 a Toa 82.0 0.5 18.4 30.3 20.4 9.6 2.3 0.4 0.1 16.5 3.8 7.6 4.0 1.0 0.1 1.3 0.3 0.6 0.3 0.1 a a 0.1 a 0.1 0.1 100.0 SPOTTED, G.M. S.M. M. *SL.M. *L.M. TOTAL YEL. TINGED. TOTAL G.M. S.M. *M YEL.ST. TOTAL G.M. GRAY, TOTAL G.M. S.M. *NO GRADE**, TOTAL ALL GRADES, TOTAL aLess. *-Untenderable. **-Includes hales 3,799 24 825 1,381 969 467 111 17 5 795 181 366 195 49 4 64 14 31 13 6 I -I 4 3 . 2 1 2 25 8 13 3 1 1. 0.5 0.2 0.2 0.1 a a 0.1 a a 1 a 4 3 7 40 4,663 316 28 7 5,047 0.1 0.7' 6.3 0.; than one-tenth of one per cent. not otherwise classified with the exception of Extra White, Lt. Yel. St. and Blue St. in which colors there were no bales. TABLE 27.-Grade, Staple Length, and Tenderability of 3,613 Bales of Cotton Produced in Alabama, 1927. Bales Staple in inches Per cent Grade WHITE, TOTAL S.G.M. G.M. S.M. M. S.L.M. L.M. *13/16 and shorter 473 1 50 218 177 24 3 7/8 2,866 2 498 1,488 791 79 8 15/16 20 3 12 5 1 and longer 5 1 4 Total 3,364 3 552 1,722 973 103 11 *13/16 and shorter 13.0 a 1.4 6.0 4.9 0.6 0.1 7/ 8 79.4 a 13.8 41.2 21.9 2.2 0.2 15/16 0.6 0.1 0.3 0.1 1 and longer 0.1 a 0.1 Total 93.1 0.1 15.3 47.7 26.9 2.8 0.3 SPOTTED, TOTAL G.M. S.M. M. *S.L.M. YEL.TINGED, TOTAL S.M. *NO GRADE**, TOTAL ALL GRADES, TOTAL 50 12 31 7 9 532 166 50 92 22 2 1 1 11 3,044 4 3 1 5 29 3 8 220 65 124 29 2 1 1 28 3,613 1.4 0.3 0.9 0.2 0.3 14.7 4.6 1.4 2.5 0.6 a a a 0.3 84.3 0.1 0.1 a 0.1 0.8 0.1 0.2 6.1 1.8 3.4 0.8 a a a 0.8 100.0 a-Less than one-tenth of one per cent. *--Untenderable. **--Includes bales not otherwise classified with the exception of Extra White, Lt. Yel. St., Gray and Blue St. in which colors there were no bales. TABLE 28.-Grade, Staple Length, and Tenderability of 1,096,600 Bales of Cotton Produced in Alabama, 1928. (Preliminary Estimate, U. S. Department of Agriculture). Bales Staple in inches Per cent GRADE 13/16 and shorter 100 100 7/8 300 200 100 642,600 1,200 69,900 387,300 161,000 21,800 1,100 200 100 15/16 1 and 1 longer Total 400 100 200 100 930,300 1,500 106,600 545,000 235,900 37,000 3,600 600 ! 100 *13/16 and shorter a a 7/8 a a a 58.7 0.1 6.4 35.3 14.7 2.0 0.1 a a 15/16 1and longer Total a a a a EXTRA WHITE, TOTAL G.M. S.M. M. WHITE, TOTAL S.G.M. G.M S.M. M. S.L.M. L.M. *S.G.O. *G.O. 226,100 300 31,100 116,000 61,800 14,100 2,400 400 36,300 3,400 24,000 7,700 900 300 42,200 5,200 28,100 8,200 600 100 19,400 400 13,600 4,900 500 20.6 a 2.8 10.7 5.7 1.2 0.2 a 3.3 0.3 2.2 0.7 0.1 a 3.9 0.5 2.6 0.7 0.1 1.7 a 1.2 0.4 0.1 a 84.9 0.1 9.7 49.8 21.5 3.4 0.3 0.1 a SPOTTED, TOTAL G.M. S.M. M. *S.L.M. *L.M. 117,200 14,800 81,000 19,500 1,900 3,000 800 1,700 500 7,400 1,700 4,700 900 100 100 100 600 100 400 100 161,500 20,000 110,100 28,200 2,900 300 10.7 1.3 7.4 1.8 0.2 0.3 0.1 0.1 0.1 0.6 0.1 0.4 0.1 a a a 0.1 a a a 14.7 1.8 10.0 2.6 0.3 a YEL.TINGED, G.M. S.M. *M. TOTAL 600 100 400 100 3,700 1,000 2,100 600 0.1 a a a 0.4 0.1 0.2 0.1 LT.YEL.ST., TOTAL *M. 100 100 100 100 a a a a YEL.ST., TOTAL *M. 100 100 100 100 a a a a GRAY, TOTAL G.M. S.M. *NO GRADE**, TOTAL 100 100 100 300 100 200 400 100 300 100 a a a a a a a a a a ALL GRADES, TOTAL 263,300 763,600 49,700 20,000 1,096,600 24.0 69.7 4.5 1.8 100.0 a-Less than one-tenth of one per cent. *-Untenderable. **-Includes bales not otherwise classified with the exception of Blue St., in which color there were no bales. TABLE 29.-Grade, Staple Length, and Tenderability of 1,307,600 Bales of Cotton Produced in Alabama, 1929. (Preliminary Estimate, U. S. Department of Agriculture). Bales Staple in inches Per cent GRADE WHITE, TOTAL S.G.M. G.M. S.M. M. S.L.M. L.M. *S.G.O. *G.O. "13/16 and shorter 498,600 300 9,100 145,400 214,600 76,700 25,900 18,000 8,600 7/8 608,200 1,100 26,200 273,000 234,700 46,100 16,600 8,200 2,300 15/16 25,800 100 2,300 14,200 7,800 1,200 100 100 2,400 100 1,900 300 100 100 100 1 and longer 4,500 200 2,300 1,800 200 Total 1,137,100 1,500 37,800 434,900 458,900 124,200 42,600 26,300 10,900 "13/16 and shorter 38.2 a .07 11.1 16.4 5.9 2.0 1.4 0.6 7 /8 46.5 0.1 2.0 20.9 17.9 3.5 1.3 0.6 0.2 15/16 2.0 a 0.2 1.1 0.6 0.1 a a 0.2 a 0.1 a a a a 1 and longer 0.3 a 0.2 0.1 a Total 87.0 0.1 2.9 33.3 35.1 9.5 3.3 2.0 0.8 SPOTTED, G.M. S.M. M. *S.L.M. *L.M. TOTAL 78,400 1,700 44,200 27,200 4,700 600 73,900 3,100 51,300 16,800 2,400 300 300 300 155,000 4,900 97,700 44,300 7,200 900 6.0 0.1 3.4 2.1 0.3 a 5.6 0.2 3.9 1.3 0.2 a a a 11.8 0.4 7.5 3.4 0.5 a YEL.TINGED, TOTAL G.M. S.M. *M. *S.L.M. *L.M. LT.YEL.ST., TOTAL *S.M. *M. 4,300 200 1,500 1,800 600 200 300 100 200 4,200 400 2,600 1,100 100 100 100 8,600 700 4,100 2,900 700 200 400 100 300 0.3 a 0.1 0.1 a a a a a 0.3 a 0.2 0.1 a a a 0.7 a 0.3 0.2 a a a a a YEL. ST., TOTAL *S.M. GRAY, TOTAL S.M. *M. 100 100 1,800 500 1,300 1,600 600 1,000 100 100 3,400 1,100 2,300 a a 0.1 a 0.1 0.1 a 0.1 a a 0.3 0.1 0.2 BLUE ST., TOTAL *S.M. 300 300 300 300 600 600 a a a a a a *NO GRADE**, TOTAL 2,100 585,900 300 688,600 28,300 4,800 2,400 1,307,600 0.2 44.8 a 52.6 2.2 0.4 0.2 100.0 ALL GRADES, TOTAL a-Less than one-tenth of one per cent. *-Untenderable. **-Includes bales not otherwise classified with the exception of Extra White in which color there were no bales. TABLE 30.-Grade, Staple Length, and Tenderability of 1,444,600 Bales of Cotton Produced in Alabama, 1930. (Preliminary Estimate, U. S. Department of Agriculture). Bales ___________ ___________ ___________ Per cent Staple in inches _ _ _ ______ _ _ GRADE *13/16 and shorter 7/8 100 100 707,600 300 24,700 282,700 290,200 76,200 27,500 5,100 900 87,600 9,100 41,300 27,300 7,300 15/16 1 and longer Total 100 100 1,276,500 500 50,000 515,100 492,200 136,700 63,900 14,500 3,600 159,300 19,700 75,200 45,600 14,500 4,300 6,800 800 3,000 2,100 600 300 200 100 100 1,700 1,444,600 *13/16 and shorter 7/8 a a 49.0 a 1.7 19.6 20.1 5.3 1.9 0.4 a 6.0 0.6 2.8 1.9 0.5 ... 15/16 1 and longer Total a a 88.4 a 3.5 35.7 34.1 9.5 4.4 1.0 0.2 11.0 1.4 5.2 3.1 1.0 0.3 0.5 0.1 0.2 0.1 a a EXTRA WHITE, TOTAL M. WHITE, TOTAL S.G.M. G.M. S.M. M. S.L.M. L.M. *S.G.O. * G.O. SPOTTED, TOTAL G.M. S.M. M. *S.L.M. *L.M. YEL.TINGED, TOTAL G.M. S. M. *M. *S.L.M. *L.M. LT.YEL.ST., TOTAL *S.M. *M. *NO 488,600 200 23,600 203,400 161,000 53,100 35,400 9,200 2,700 64,100 9,500 20,500 16,400 7,000 1,700 2,800 400 900 900 400 200 100 100 1,500 557,100 68,600 1,400 24,800 35,200 6,000 1,000 200 6,900 1,000 4,000 1,700 20 200 100 100 11,700 300 4,200 5,800 1,400 700 100 400 200 33.9 a 1.6 14.1 11.1 3.7 2.4 0.6 0.2 4.4 0.7 2.0 1.1 0.5 0.1 ,. i i 4.7 0.1 1.7 2.4 0.4 0.1 a 0.5 0.1 0.3 0.1 a ______ 0.8 a 0.3 0.4 0.1 0.1 a a a ______ 2,600 3,800 300 2,000 1,200 200 100 100 100 200 799,400 0.2 0.2 a 0.1 a a a a a ^^^ 0.1 38.6 0.3 a 0.1 0.1 a a a a a 55.3 a a a 5.2 0.9 0.1 100.0 GRADE**, GRADES, TOTAL ALL TOTAL 75,700 12,400 a-Less than one-tenth of one per cent. *-Untenderable. **-Includes hales not otherwise classified with the exception of Yel.St., Gray, and Blue St. in which colors there were no hales. TABLE 31.-Government and Local Buyers Grades of 706 Bales, Four Alabama Towns, 1926. Buyers grades Government grade S.G.M. G.M. S.M. M. S.L.M. L.M. S.G.O. G.O. G.M. Sp. S.M. Sp. M. Sp. S.L.M. Sp. G.M. Y.T. S.M. Y.T. S.L.M. Y.T. Total ______Number of bales ____ Total 6 124 182 122 69 34 6 1 _________ White I N ____ I ___ ___ G.M. 4 1 S.M. 4 77 41 1 I M. 2 36 105 18 1 ww S.L.M. 5 29 T -- L.M. S.G.O.I G.O. G.M. 1 Spotted S.M. M. 1 2 1 S.L.M. S.M. Yellow Tinged M. S.L.M. 3 17 45 80 15 2 6 21 4 2 1 1 3 11 1 5 31 8 1 4 1 1 2 5 11 2 45 58 36 16 4 3 20 13 10 2 1 ,, 19 4 2 5 1 3 1 1 1 2 706 2 174 104 52 1 1 126 198 15 11 1 6 5 4 48 TABLE 32.-Government and Local Buyers Grades of 817 Bales, One Alabama Town, 1928. Buyers grade Government grade Number of bales White Total 11 381 197 S.M. 1 42 3 M. 9 287 105 S.L.M. 1 52 85 L.M. G.M. S.M. M. 4 S.L.M. G.M. Sp. S.M. Sp. M. Sp. S.L.M. Sp. M.Y.T. Total 19 34 135 38 1 1 817 1 2 1 1 28 85 6 12 4 45 27 1 1 228 5 4 5 50 521 18