Preprocessing practices and costs of United States textile mills as affected by the cotton bale package

Historic, archived document

Do not assume content reflects current
scientific knowledge, policies, or practices

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PREPROCESSING PRACTICES AND COSTS
OF UNITED STATES TEXTILE MILLS

as Affected by the Cotton Baler Package

7^
Marketing Research Report No. 253 )//

"7

UNITED S.HTE5 DEPARTMENT OF AGRICULTURE -

Agricultural Marketing Service
Marketing Research Division
Washington, D.C.

CONTENTS

Page

Summary 1

Introduction 3

Preprocessing practices and problems of spinners k

Shortcomings of the package k

Bale cleaning practices 7

Costs to mills ^ 10

Costs associated with cleaning 10

Costs not associated with cleaning 13

Total of all preprocessing costs 1^

Other costs and considerations 17

ACKNOWLEDGMENTS

This study is part of a "broad program of research aimed at increasing
marketing efficiency and expanding markets for farm products. It would not
have "been possible without the cooperation of the many domestic cotton man-
ufacturers who provided a large proportion of the information contained in
this report. The staffs of the National Cotton Council (NCC) and of the
American Cotton Manufacturers Institute and its committees on cotton and on
research and technical service assisted in developing plans and procedures
for obtaining the information. Staff members of the NCC also assisted by
collecting some of the data and by furnishing information and suggestions
based on their work with various segments of the industry in an effort to
improve the bale package.

Washington D. C. July 1958

For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C. - Price 15 cents

PREPROCESSING PRACTICES AND COSTS OF IINITED SPATES TEXTILE MILLS
AS AFFECTED BY THE COTTON BALE "PACKAGE ■„

"by D. G. ^afferty and Maurice R. Cooper
agricultural economists
Market Organization and Costs Branch
Agricultural Marketing Service l/

SUMMARY

During the last few years the domestic cotton industry, the United
States Department of Agriculture, and others, have been concerned ahout crit-
icisms of the American cotton hale package, and have made concerted efforts
to improve the package. As a part of this effort (and upon the recommenda-
tions of and in active cooperation with industry representatives), the
Agricultural Marketing Service inaugurated in 1955-56 a fairly broad study
of the problems and economic considerations involved. This report 'deals
with those phases of the study which relate to (l) the cleaning of cotton
bale surfaces and other preprocessing problems and practices of domestic
spinners resulting from the condition of the bale packages as received by
the mills, and (2) the effects of these practices and problems on mill costs.

In the first phase of the study, mail questionnaires were returned by
mills which in 1955 consumed approximately four -fifths of the total cotton
consumption of all domestic mills. The information furnished by these mills
showed that about 85 percent of them cleaned the outer surface of at least
some of the bales consumed and that approximately one -half of all bales con-
sumed received some surface cleaning before the cotton was placed in the pro-
cessing machinery. It also indicated that picking or brushing or both were
by far the most frequently used methods in the preprocessing cleaning of
bales. Of the bales cleaned, nearly one -half were reported to have been
cleaned on all surfaces, and one-third on the heads and one or two sides.

In the second phase of the study, information was obtained in the sum-
mer of 1957 fry personal interviews with officials of ll^t- mills selected to
represent the methods, practices, and costs of all domestic mills which do
any significant amount of cleaning before processing. From the information
obtained in this more intensive part of the study and that available from

l/ Mr. Lafferty transferred to the Arkansas Agricultural Experiment Station,
Fayette ville , Ark., in October 1957-

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the earlier phase, it is estimated that in 195& the preprocessing cleaning
operations of domestic mills cost them an average of about 25 cents for each
hale cleaned. Of this, the loss in value of the contaminated cotton removed
from the surface of the bales accounted for nearly two -thirds, labor costs
about one-third, and equipment costs less than k percent. Estimates for in-
dividual mills indicate that nearly 75 percent of the bales cleaned were in
mills with an average of under 30 cents per bale cleaned, l6 percent in mills
with averages of 30 to 50 cents, and 10 percent in mills with averages of 50
cents and above.

All domestic mills have at least some preprocessing costs not associated
with bale cleaning which result from either the condition of the bales or the
adherence of cotton to the bale covers when they are removed. These costs
are estimated to have averaged about 20 cents per bale for all bales con-
sumed. Labor- -for removing cotton from the bale covers and for the time lost
in handling bales with loose and ragged bagging and those that are distorted —
accounted for about one -fourth of these costs and losses in value of cotton,
about three -fourths . The latter was mainly due to the reduced salvage or waste
value of the cotton removed from or remaining with the bagging. The average
of these noncleaning costs for individual mills ranged from about h cents to
approximately 68 cents per bale consumed.

The total preprocessing costs to domestic mills attributable to the
faults of the bale package are estimated to have been almost $3 million.
This is equivalent to a little over 33 cents per bale for each of the bales
consumed. The estimated average preprocessing cost per bale to mills for all
bales that were cleaned is k^.6 cents, with labor representing nearly one-
third and loss in value of cotton over two-thirds. In addition to the costs
described in this report, the total cost to the cotton industry includes (l)
additional direct costs to domestic mills, (2) similar costs to foreign
mills, and (3) various types of direct costs to other segments of the industry.
To answer the question of how badly an improved package for American cotton
is needed, consideration should be given not only to all the direct marketing
costs of the present package, but to the overall effects of such costs on
farm value, production, competitive position, and consumption of American
cotton.

Conventional sampling practices and improper application of bale covers
are the cause of many of the complaints against the American cotton bale and
of the costs given in this report. These, together with the domestic system
of buying and selling cotton on a gross -weight basis, are among the most im-
portant obstacles to the improvement of the American cotton bale package.
Efforts to correct or reduce the major faults of the bale package should in-
clude special attention to ways of changing these practices .

3 -

INTRODUCTION

For decades the American cotton bale package has been the subject of
criticism. As far back as 1896 this Department released a publication in
which the cotton bale package was described as "the clumsiest, dirtiest, most
expensive and most wasteful package in which cotton, or in fact any commodity
of like value, is anywhere put up." 2/ The present partially covered and
frequently cut bales continue to receive extensive criticism both in domestic
and foreign markets. The contamination of bales, weather damage, fire losses,
and need for picking sample holes, together with the unattractive appearance
of the bales, are often said to be responsible for sizable economic losses in
marketing channels. Poorly applied and rusty bands and buckles, which result
in broken or distorted bales and in rust contamination, as well as overweight
and lightweight bales, are also the source of considerable complaint.

The increased attention being given to the packaging of all commodities,
together with the growing competition from manmade fibers and foreign-grown
cotton, have focused attention on the unfavorable aspects of the American
cotton bale package. Synthetic fibers are delivered to consuming mills com-
pletely free from contamination in neat, uniformly shaped, easily handled
packages. Most foreign cottons are also said to reach the manufacturers in
a much more desirable package than American cotton does .

As a result of these and other developments, the domestic cotton industry,
through the National Cotton Council and its Packaging Subcommittee of the
Industrywide Committee on Cotton Quality, and the manufacturers of experimen-
tal materials, ties, and buck3.es, have devoted much attention to the problem
of bale packaging during the last few years. As a part of this overall effort
and upon the recommendations of industry groups and with their assistance, the
Agricultural Marketing Service developed a project in 1955 and 1956 concerned
with problems and economic considerations in modifying the American cotton
bale wrappings .

The objectives of this project were to collect and analyze economic data
to determine the nature and extent of (l) the problems and costs resulting
from existing methods of packaging American cotton, and (2) the problems in-
volved and the possible net benefits to be derived from the adoption of new
or improved packaging materials. The project was designed to cover all seg-
ments of the domestic cotton industry as well as the transporters of cotton.
This report, however, is limited largely to (l) the preprocessing problems
and practices of domestic cotton spinners resulting from the condition of the
American cotton bale package as delivered to the mills, and (2) the nature
and extent of the effects of these problems and practices on mill costs prior
to the actual processing of the cotton.

2/ U. S. Department of Agriculture. The Cotton Plant. 1896.

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In the first phase of the study, information was obtained in 1956 by mail
questionnaire from, roughly, four-fifths of all United States mills known or
believed to be spinning raw cotton. 3/ The information called for included
the origin and amount of cotton consumed in 195 5 j the number of bales cleaned
before being processed, the method of cleaning used, the parts of the bales
cleaned, and the major end products made from bales which were cleaned and
from those which were not cleaned. This information was used primarily to re-
duce the time and expense of conducting the second phase of the study which
involved personal contacts with officials and workers at a relatively small
number of mills using different methods and practices. It also provided help-
ful information for developing the details of the personal interview schedule.
This schedule called for information on (l) practices and costs of cleaning
bales before processing; (2) number of bales consumed and cleaned by area of
growth and method of cleaning; (3) major textiles produced from, and the grade,
staple length, and average price of the cotton used in mixes at each of the
mills; {k) costs other than for cleaning incurred as a result of the outer sur-
face condition of the bale; (5) types of bale surface contaminants encountered
most frequently; and (6) opinions as to the most important shortcomings of the
conventional bale package .

Personal interview schedules were obtained during the summer of 1957 from
ll^t- mills, with a reported 195& consumption of cotton equal to about 20 per-
cent of the total consumption of all domestic mills. Few mills had any esti-
mates of the preprocessing costs based on actual time studies and other
specific checks. Consequently special efforts were made in designing the
schedule and conducting the interviews with mill officials and workers to help
insure reasonably accurate estimates where such time studies and checks were
not available .

PREPROCESSING PRACTICES AND PROBLEMS OF SPINNERS

Shortcomings of the Package

Complaints over a period of years, as evidenced by a review of trade lit-
erature and the information obtained in the course of this study, indicate that
the average American cotton bale package as delivered to domestic mills falls
far short of being the type of bale package the spinners would like. The more

3/ An effort was made to obtain separate data on each plant since it was
known that the separate plants of a given firm often if not generally produced
different qualities and types of yarns and fabrics. Consequently, it was be-
lieved that the practices and costs in the preprocessing cleaning and handling
of bales would vary more nearly by plants than by firms, and that the practices
and costs would, in any event, need to be determined for individual plants.
Officials of some firms, however, combined the data for two or more plants.
In most instances throughout this report the term "mill" is used to designate
the particular operations reported by mill officials.

- 5 "

commonly cited shortcomings include: (l) Failure of the package to protect
the contents of the hale from contaminants, including jute fibers from the
hale covers, and other surface damage; (2) excessive adherence of cotton to
the hale cover; (3) extra time required in handling hales with loose, ragged
bagging; and (k) extra space and time required in storing and handling hales
of extra size and irregular shape. Since the work covered in this report is
limited to those aspects of the hale package directly relating to the hale
cover and the bale ties, the material which follows is concerned almost entire-
ly with the first three of these groups .

Failure to Protect the Cotton

The type of bagging and ties used, together with the sampling, handling,
and storing practices followed in marketing American cotton result in a major
proportion of hales reaching domestic mills with large areas of the surfaces
contaminated with various kinds of foreign materials .

A study made in 1933 indicated that about 58 percent of the total surface
of the average-size, gin-pressed, unsampled American bale wrapped with con-
ventional jute bagging was exposed as a result of the open mesh or open weave
of the fabric . kj This did not take into consideration the completely exposed
space between the two bagging patterns, or the areas on the ends or heads of
the bales frequently exposed because of failure to properly fasten the bagging
under the ties. On the smaller, standard -density compressed bale, which repre-
sents a large proportion of the bales consumed by domestic mills, the exposed
surface would be considerably smaller due to the reduction or elimination of
the exposed space between the bagging patterns. Furthermore, sugar -cloth
bagging, which is estimated to have been used in packaging about two -fifths of
the 195^-55 crop, compared with three-fifths for which open-weave jute was
used, is considered more protective than the open-weave material. 5/ But even
with sugar-cloth bagging, the average unsampled gin-pressed bale has a rela-
tively large proportion of its surface exposed, despite the efforts now being
made to see that the bagging is of adequate length, and is overlapped on the
heads of the bales and properly tucked under the ties.

The types of exposures referred to above may not be as serious as those
resulting from the mutilation of the bale package after it leaves the gin press,
and from the improper application of the bagging. During the 19^-9-50 season,
it was found that by the time American cotton bales reached domestic mills and
were ready for moving to the opening rooms to be consumed, they had been sam-
pled an average of 3 times, and some bales were sampled as many as 6 times. 6/
This meant that each of 2 sides of the average bale had 3 holes cut through

hj Wright, J. W., and Cheatham, R. J. Comparative Advantages of Jute and
Cotton Bagging for American Cotton. U. S. Dept. Agr., Bur. Agr. Econ. Mar. 1983.

5/ Fortenberry, A. J. Charges for Ginning Cotton, Seasons 19Vf-48 to 195^-55.
U. S. Dept. Agr., Agr. Mktg. Serv., Mktg. Res. Rpt. No. 120. June 1956.

6/ Soxman, R. C, and Gaus, G. E. The Sampling of Cotton Bales as Related
to Marketing, U. S. Dept. Agr., Prod. & Mktg. Admin. Nov. 1950.

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the bagging and veil into the outer surface of the cotton, from which a siz-
able amount of cotton was pulled. These cuts, which are generally 18 to 20
inches long and K to 6 inches wide, and the holes torn in the "bagging "by the
rough treatment the bales often receive, represent a considerable proportion
of the outer surface of the bale.

More than three -fifths of the cotton spinners from whom mail question-
naires were obtained reported in 1956 that contamination (either on the outer
surfaces or inside the bales) of the cotton consumed by their plants affected
their opening-room costs and processing costs, and sometimes reduced the qual-
ity of the finished yarns and fabrics. The types of contaminants or foreign
materials encountered most frequently, as reported by 11^+ mill operators in-
terviewed, were: Rust stains, reported by 91 mills; weather stains, 71 mills;
hard fibers, "Jl; tar, 69; grease, 67; dirt, 52; ink dye, k-9; colored fibers,
27; dust and sand, 16; and water damage, 11 mills. Representatives of 17 mills
reported encountering such other contaminants as lime, smoke, crushed gravel,
floor stains, straw, lampblack, wood shavings, paint, feed, seed, bark, and
fertilizer. Most of these probably cause at least some difficulty in spinning,
weaving, or finishing, or extra loss as waste. Failure of the conventional
bale package to protect the contents of the average bale directly affects
cotton spinners in two other ways: (l) Added fire hazards and (2) added
amounts of raw cotton going into warehouse and opening -room waste or sweeps.

Loose cotton, hanging from sample holes, torn places in bagging, and other
unprotected areas of the bale, creates significant fire hazards because it
burns freely and can be readily ignited by sparks from power equipment, elr' -
trical wiring, cigarettes, or slipping bands. No attempt was made in this
study to determine the losses from such fires at mills or the effects on in-
surance rates. The hazard, however, is such that considerable precautions
are generally taken, including picking the loose cotton from the sample holes.
Also, small amounts of such cotton are accidentally dislodged during the
weighing and handling operations and while the bales are in storage. Most of
this cotton goes into some form of waste, much of it being of low quality,
and is disposed of at a low price or used as a low-value product. Although
the amount of this waste per bale is small, it is significant in the aggregate.

Excessive Adherence of Cotton Fibers to Bagging

When a bale is stripped of its covering, a fairly large amount of cotton
remains on the bagging, particularly on open-weave jute. At most mills some
of this cotton is picked or brushed from the bagging. A part of the cotton
removed is often put back with the cotton in the bale and processed along with
it. However, when cotton removed from covers is contaminated with bagging
fibers and other foreign materials, it is either sold at a greatly reduced
price or utilized by the mill in producing low-grade yarns. Even where the
bale covers are picked, some cotton is usually left on the bagging and sold
with the covers at a price lower than that received for most other cotton
waste .

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Since almost all American cotton "bales are wrapped in either open-weave
jute or sugar -cloth "bagging to which cotton fibers readily adhere, this is an
aspect of the conventional bale package affecting all domestic mills.

Extra Labor Requirements Due to Loose, Ragged Bagging

Usually cotton bales are unloaded, weighed, and moved into mill storage
by means of hand trucks or power equipment. Later the bales are taken from
storage and moved to the opening room, where the cotton is prepared for pro-
cessing. Most mill operators interviewed reported that loose bagging frequent-
ly became entangled in the wheels of the handling equipment and slowed down
the operation. A single interference of this nature may stop or slow down an
entire operating crew of up to 6 or 8 men. A few bales were reported as being
in such condition that the bagging and ties were removed at the unloading docks
and the loose cotton carried directly to the opening room.

Bale Cleaning Practices

Bales Cleaned

The information developed through the industrywide mail survey indicated
that about one -half of all American bales consumed domestically in 1955 were
cleaned at least to some extent by the mills prior to processing (table l) .
Practices by individual mills varied widely, with ahout 15 percent of the mills
doing no cleaning and approximately 50 percent of them cleaning all bales they
consumed. About one -fourth of the mills cleaned less than 10 percent of their
consumption and the remaining 10 percent of the mills cleaned between 10 and
99 percent of the bales consumed.

A larger proportion of the Western-grown cotton was cleaned than cotton
from the other three areas (table l) . Approximately three-fifths of the cotton
obtained from the West was cleaned, compared to one-half of that from the
Central area and a little less than one -half of that from each of the other
two producing areas . jj Apparently the most important factor contributing to
the high proportion of Western cotton cleaned is the large amount of open
storage in the West.

A rough classification indicated that mills producing fine goods cleaned
more than three -fifths of the bales they consumed, compared with less than
one -half of the hales consumed by mills producing coarse goods. This is in
keeping with the higher proportion of Western and Central area cotton cleaned,
since the cotton from these areas is longer in staple and therefore is used
to a greater extent by producers of fine goods than cotton from the other areas .

7/ Production areas referred to in this report generally encompass the
following: Southeast — North and South Carolina, Georgia, Alabama, central and
eastern Tennessee; Central States — Mississippi, Louisiana, Arkansas, Missouri,
western Tennessee; West — El Paso area of Texas, New Mexico, Arizona, California;
and Texas and Oklahoma.

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Table 1. — Estimated distribution of "bales of cotton consumed and cleaned, "by-
area of origin, United States, 1955

Area of orgin

Bales
consumed l/

Bales
cleaned l/

Proportion of
bales cleaned

: Number

Southeast : 1,719,050

Central States : 3,087,555

Texas and Oklahoma : 1,156,517

Western : 1, 30^,760

All areas : 7,267,882

Number

801,861

1,556,377
562,927

801,720

Percent

^7
50
k9

61

3,722,885

51

l/ Estimates for all domestic mills based on answers to questionnaires by
424 mills and on Bureau of Census estimates of total consumption by mills .

Some mill operators stated that their bale -cleaning operations were
varied from time to time, depending upon complaints received from their
customers or upon defects noted in the finished yarns and fabrics. Others
reported cleaning all bales without attempting to determine degree of con-
tamination. This was believed no more costly and much safer than bale -by-
bale visual inspection and selective cleaning.

Methods of Cleaning

Mill responses to the mail survey indicated that three methods of
cleaning bale surfaces were used primarily: (l) Picking contaminated cotton
from the surface of the bale by hand, (2) currying or brushing the surfaces
of the bale with brushes, usually made at the mill from card clothing or other
mill stock, and (3) blowing the bale surfaces with compressed air, usually
supplied by the mill compressor system. Many mills used a combination of
these methods and one mill reported the use of a vacuum system.

Brushing and blowing are rather explicit terms and probably were inter-
preted uniformly by all of the mills surveyed. Picking is less exact, however,
and may have been interpreted to cover everything involving the removal by
hand of an occasional bit of trash from the surface of a bale to removing a
substantial amount of cotton from irregular or badly damaged bales.

Picking bales was the most prevalent method used, both in terms of num-
ber of mills using the method and in number of bales cleaned, while brushing
was a close second (table 2) . About 26 percent of all mills reported picking
as the only method used. These mills accounted for approximately 33 percent
of all bales that were cleaned prior to processing and an estimated 17 percent

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Table 2. --Number and distribution of mills reporting and bales cleaned and

not cleaned, by cleaning methods, 1955

Mills reporting 1/

Methods of cleaning
and
other treatment

Cleaning methods

Picked only. .
Brushed only.
Blown only. . .
Other 3/

Total all methods

Other treatment

No cleaning ,

Totals

Num-
ber

Percentage of--

Mills
cleaning

108

30

76

21

13

4

162

45

359

65

424

100

All mills
reporting

Bales cleaned and not cleaned

Number

2/

Percentage of--

Bales
cleaned

Bales
consumed

26
18

3
38

1,223,265

1,160,244

33
31

199,903

1A39A73

5
31

85

3,722,885 100

15 4/3, 5^+, 997

100

7,267,882

17

16

3

15

51

^9

100

l/ Mills returning usable mail questionnaires.

2/ Estimated totals for all mills based on reports from mills reporting and
on Bureau of Census estimate of total mill consumption.

3/ Includes combinations of picking, brushing, and blowing reported by l6l
mills and the vacuum system reported by one mill.

4/ Includes an estimate for all mills that did no cleaning (not just those
reporting), plus an estimate of the bales not cleaned that were consumed in
mills which cleaned only a part of their bales.

of the total bales consumed by all domestic mills . Brushing was the only
method used by about 18 percent of the mills; they cleaned 31 percent of all
bales that were cleaned, an amount equivalent to l6 percent of all the bales
domestically consumed. Only 3 percent of the mills reported blowing as the
sole method used, and the bales cleaned by those mills represented 3 percent
of the total domestic consumption.

About 38 percent of the mills reported the use of combinations of
methods, especially picking and brushing. Collectively the mills, using a
combination of methods, reportedly cleaned approximately 31 percent of all
the bales cleaned and about 15 percent of the total consumption by United
States mills.

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Parts of Bales Cleaned

In 1955 nearly one -half of the hales that received any cleaning "before
processing were reportedly cleaned at least to some extent on all six sur-
faces (table 3)' About one-third of the hales cleaned were reported as
having been cleaned both on the heads and on one or two sides, and more than
one-sixth of them on the heads only. This indicates that the heads of nearly
all the bales that were cleaned received at least some cleaning.

The more frequent cleaning of the heads of the bales than other surfaces
apparently results from the fact that cotton is generally both stored and
transported with the hales resting on the head or end. This means that during
a considerable proportion of the time, one end of the average hale of American
cotton is in direct contact with either the ground, a warehouse or compress
floor, a truck bed, or a rail car "bed. All of these are often sources of
various types of contaminants, particularly where there is no "bagging over
parts of the ends of the hale. Furthermore, when the hales are in an upright
position, even the upper ends are often subject to more contamination and
weather damage than the sides, especially when hales are stored in the open
or in buildings with faulty roofs .

In terms of method of cleaning and parts of the hale cleaned, the picking
of all surfaces and the "brushing of heads and one or two sides were the most
extensively used combination of practices.

COSTS 'TO MILLS

A number of costs incurred at domestic cotton spinning mills are related
to the hale package. As previously indicated, however, the ones covered in
this report are (l) those directly associated with hale cleaning, and (2) cer-
tain others occurring "before the cotton is processed.

Costs Associated With Cleaning

Costs incurred by domestic mills in the cleaning of cotton bales include
(l) the labor required "both in cleaning the outer surface of the bales and in
extra handling associated with cleaning, (2) the loss in the cotton removed
from the hales in the cleaning operations, and (3) the power and hand equip-
ment used in cleaning the hales .

The average of all cleaning costs as reported by llA representative mills
was about 25 cents per bale cleaned (table k) . Of this, the loss in the value
of the cotton accounted for nearly two -thirds and labor costs about one -third.
Equipment costs averaged less than 1 cent per hale.

Total cleaning costs per hale varied greatly among mills, ranging from
about k cents to approximately $3*24. However, nearly three -fourths of the
bales cleaned were in mills with average cleaning costs of under 30 cents per

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Table 3- --Estimated number and distribution of bales cleaned, by method of

cleaning and parts of bale cleaned, 1955

Method

Bales
cleaned

Part of bale cleaned

of
cleaning

: Heads :
: only :

Head and one :
or two sides :

All
surfaces

; Other

1/

Total

Number

Percent

Percent

Percent

Percent

Percent

Picked only. . .

1,223,265

9

24

67

2/

100

Brushed only. .

1,160,244

27

56

15

2

100

199,903

IT

50

33

100

Other 3/

1,139,473

12

20

60

8

100

3,722,885

16

34

J+7

3

100

l/ The part of the bale cleaned was not reported or the different parts of
the bales were cleaned by different methods .

2/ Less than 0.5 percent.

3/ Includes combinations of picking, brushing, and blowing, and a vacuum
system used by one mill.

Table 4. --Estimated cost to domestic mills of cleaning cotton bales before

processing, 1956

„ , . : Average cost per bale cleaned
: Actual : As percent of total

: Cents Percent

Labor for cleaning bale surfaces : 7-2 28.4

Labor for extra bale handling : 1.6 6.3

Total labor : 8.8 34.7

Loss in value of cotton l/ : 15-7 6l.8

Equipment : 0.9 3J?

Grand total : 2^.4 100.0

l/ Original cost, minus salvage value of contaminated cotton removed from
bales and adjusted for claims paid by shippers.

-12 "

"bale cleaned (ta"ble 5)- The remainder of the bales cleaned were distributed
as follows: 10 percent in mills with estimated average costs of 30 to kO
cents per hale, 6 percent where costs averaged ^0 to 50 cents, and 10 percent
where costs averaged 50 cents and above. These wide variations in costs per
bale between individual mills were, of course, almost entirely the result of
differences in the average loss in value of cotton and the average cost of the
labor involved. These costs may be influenced by (l) efficiency and organi-
zation of the cleaning operations, (2) proportion of the bales consumed which
are cleaned, (3) surface condition of the cotton received and the extent to
which the mill either rejects bales with excessive contamination or obtains
claim settlements from shippers of such contaminated cotton, (k) condition of
the bales consumed by the mill for which no reimbursements were made by the
shippers, (5) differences in the cleaning of bales with equal amounts of sur-
face contamination, (6) quality and purchase price of the cotton consumed,
(7) use made of, or the price obtained for, the contaminated cotton removed in
cleaning the bales compared with the original purchase price of the cotton,
and (8) method of cleaning.

Labor Costs

The estimated average labor requirement for all bales cleaned by domestic
mills in 195& was slightly less than k man -minutes per bale. The mill average
ranged from less than 1 to about 30 man -minutes per bale cleaned.

The hourly wages paid the cleaning crew ranged from $1 to $lA6 and aver-
aged about $1.11. About half of the mills paid less than $1.10 and one -tenth
paid more than $1.20. At existing wages, the average cost of the labor in-
volved in cleaning the bale surfaces was about 7-2 cents per bale cleaned.
The average at individual mills ranged from less than 1 cent up to about 58
cents per bale. Mills which accounted for 65 percent of the total bales
cleaned had estimated average labor costs of less than 10 cents per bale
cleaned.

In addition to the actual cleaning, a number of mills reported other
labor costs incurred in moving bales to special areas for cleaning and from
there to the opening room. The estimated extra handling costs at these mills,
when calculated on the basis of the number of bales cleaned by all mills, was
equivalent to 1.6 cents per bale.

Loss in Value of Cotton

The loss in value of cotton in bale cleaning represents the difference
between the price originally paid for the cotton delivered to the mill and
the salvage value of the cotton removed in cleaning. This loss or cost was
estimated at nearly l6 cents per bale cleaned. At individual mills, the
average cost ranged from less than 1 cent to about $2.67 per bale cleaned.

The average amount of cotton removed by all mills in the cleaning proc-
ess is estimated at O.65 pound per bale cleaned. The average ranged up to
approximately 10 pounds for some mills that cleaned only very badly contam-
inated bales. The average salvage value per pound of the cotton removed in

- 13 "

Table 5 . --Estimated number and proportion of cotton bales cleaned by mills

having specified bale cleaning costs, 195&

Range of average cost per bale
cleaned to individual mills

Bales cleaned

Number 1/

Percent of total

Cents :

to 10

10 to 20

20 to 30

30 to kO

^0 to 50

50 and above

Total

Thousands

906

1,359

1,087

^53

272

^53

^,529

Percent

20
30
2k
10
6

10

100

l/ Number cleaned at mills with average costs per bale cleaned falling with-
in the range indicated.

the surface cleaning also varied somewhat from mill to mill, but at most mills
it was based on the price received for cotton waste, which was about the same
at all mills. The average for all mills was about 11 cents per pound, whereas
the average price the mills originally paid for this and other cotton in the
bales cleaned was estimated at 35-65 cents P er pound.

Equipment Costs

Since large proportions of the bales cleaned were picked by hand or
brushed with inexpensive and rather durable brushes, the equipment costs per
bale incurred in the preprocessing cleaning of cotton were small. Some mills
could provide no specific estimates relating to such costs, often reporting
them as very small or practically nil. However, from data obtained, it is
estimated that the average cost was equivalent to less than 1 cent per bale
for all bales cleaned. The average for bales cleaned with brushes was esti-
mated at about one -tenth cent per bale, and that for the bales which were
blown at approximately 3 cents. The latter is based on limited reports from
mills which had separate air-compressor units used largely for cleaning bales.
Most mills using compressed air in cleaning bales had central compressor units
which furnished air for a number of operations throughout the mill.

Costs Not Associated with Cleaning

Preprocessing mill costs resulting from the condition of American cotton
bales and the type of bagging used, but not associated with the cleaning oper-
ations, include (l) the labor required in picking cotton adhering to the bale
covers after they are removed, (2) extra labor required to move and stack dis-
torted bales and those with loose and ragged bagging, and (3) loss in value of

- Ik -

cotton which is picked or "blown from the hale covers , left in and sold with
the hale covers, or picked from the sample holes while the hales are in the
mill warehouse.

Collectively these costs are estimated to have averaged about 20 cents
per bale consumed by all mills, with labor accounting for about one -fourth
and loss in value of cotton about three -fourths (table 6). The average of
these costs for individual mills ranged from about k cents to approximately
68 cents per bale consumed.

A large part of these costs represents the labor used in picking the
bale covers. In many of the mills, the cost of removing the cotton from the
bale covers was larger than the salvage value of the cotton removed. Some
mills reported that this salvage cotton was sold as waste at prices below the
prices dealers were regularly paying for either picked or unpicked used
bagging. At some mills only large batches of cotton which adhered to the
covers were removed from the bagging.

A considerable proportion of the mills supplied estimates of the extra
labor required in handling and storing hales which (l) had loose, stringy
bagging which became tangled in or caught under both the hand and power trucks
used in moving the cotton, and (2) required special handling because they were
abnormal in size and shape. The proportion of such bales reported was com-
paratively small, so that the estimated average cost of the extra labor in-
volved was a little over one -half cent per bale consumed.

The estimated average loss in value of cotton which adhered to and was
sold with the bagging was nearly 7 cents per bale consumed. This plus the
estimated loss on the cotton removed from the bagging gives a combined aver-
age loss of approximately 12 cents per bale. The estimated loss on cotton
going into warehouse sweeps was somewhat more than 3 cents per bale. About
three-fifths of the bales consumed by domestic mills in 195& were consumed in
mills where the preprocessing costs not directly associated with bale cleaning
averaged less than 20 cents per bale consumed (table "j) . Nearly one-third of
the bales consumed were in mills where such costs were from 20 to 30 cents
and about one -tenth of the bales in mills where average costs were 30 cents
or more per bale .

Total of All Preprocessing Costs

The cost per bale presented in the preceding pages, when multiplied by
the number of bales involved, indicates that the total of such costs to all
domestic mills in the calendar year 195^ was almost $3 million (table 8) .
About two -fifths of the total cost was associated with bale cleaning operations
and three -fifths with other operations. The total was equivalent to approxi-
mately 33 -I/**- cents per bale for each of the 8,880,000 bales consumed. Of the
overall average cost per bale consumed, 23.2 cents represented losses in value
of cotton and 9.6 cents, the labor costs involved. Equipment costs were equal
to one -half cent per bale consumed.

- 15 "

Table 6. --Estimated preprocessing costs to domestic mills resulting from the
cotton "bale package other than those associated with bale cleaning

Cost item

Average cost per bale consumed
Actual : Percent of total

: Cents

Labor for picking bale covers : k. 5

Extra labor required in moving and :

stacking bales : 0.6

Percent
22.2
2-9

Total labor ,

5-1

25.1

Loss in cotton removed from bale :

covers l/ :

Loss in cotton sold with bale covers l/...;
Loss in cotton sold as warehouse sweeps l/:

5-1
6.9

3.2

25.1
3^.0
15.8

Total loss in value of cotton l/ : 15-2

7^-9

Total of all items : 20.3

100.0

1 ' Original cost minus salvage value.

Table 7- --Estimated number and proportion of cotton bales consumed by mills
having specified preprocessing cost not associated with bale cleaning,
1956

Range of average cost per bale : Bales consumed

consumed to individual mills : Number 1/ : Percent of total

: 1,000

: bales Percent

Cents : :

to 10 : kkk 5

10 to 20 : 4,86% 55

20 to 30 : 2,753 31

30 to kO : kkk 5

kO to 50 : 89 1

50 and up : 266 3

Total : 8,880 100

1/ Number consumed at mills with average costs per bale cleaned falling
within the range indicated.

- 16 -

Table 8. — Estimated preprocessing costs to mills associated with existing
methods of packaging and handling American cotton, 1956

•

Cost
per bale

' Bales
[ involved

: Total

costs

Cost item

. Actual

: Percent
:of total

:

1,000

1,000

'•

Cents

bales

dollars

Percent

Labor:

:

•

8.7

^,529

395

14

In non-cleaning activities 2J . . .

:

5-1

8,880

k5k

15

9.6

8,880

849

29

Loss in value of cotton:

.

•

15-7

J+,529

712

24

15.2

8,880

1,351

k6

■

23.2

8,880

2,063

70

Equipment :

o

•

• 9

4,529

40

1

--

8,880

--

--

:

• 5

8,880

4o

1

Total costs :

•

In and from cleaning ba.les "\J . - .

•

25.3

4,529

1,147

39

In and from non-cleaning activ-

:

:

20.3

8,880

1,805

61

Total

33.2

8,880

2,952

100

:

l/ Includes extra labor used in moving some of the bales to and from special
areas for cleaning.

2/ These activities and causes include (a) labor for picking bale covers
and for extra time in moving and stacking bales due to loose bagging and dis-
torted and oversize bales, and (b) loss in value of cotton removed from bale
covers, remaining with the bale covers, or going into warehouse sweeps.

The estimated 1956 costs to mills attributable to the bale package and
sampling practices averaged about 45.6 cents per bale for those bales which
were cleaned prior to processing. This includes estimates of average per
bale costs of 20.3 cents due to "non -cleaning" expenses and 25. 3 cents due
to preprocessing cleaning. Here, too, roughly one -third of the 45 .6 cents
represented labor costs and approximately two-thirds was for loss in value
of cotton.

- IT "
Other Costs and Considerations

In considering the results given in this report as they relate to efforts
to improve the American cotton hale package, the following should he kept in
mind:

1. The cost estimates reported do not include any increase in processing
costs or any reduced value of yarns and fahrics resulting from surface con-
tamination including the mixture of jute finer with the cotton, in hales which
were either not cleaned at all hefore processing or were not adequately
cleaned. It seems likely that such costs may well he important, particularly
to the mills that do no regular hale surface cleaning.

2. No allowances have "been included for differences in costs of trans-
portation, handling, and fire loss, due to extra weight of standard bagging
compared with improved bagging that has been used experimentally, the greater
fire hazards of bales with exposed surfaces, and to misshapen hales. The
effects of these are at least partially borne by the manufacturers, but are
of more direct concern to other segments of the industry.

3- No estimates have "been made of the costs to foreign mills resulting
from the shortcomings in American cotton bale packaging and sampling practices .
It may well be, however, that the costs to foreign mills are more important
to the domestic cotton industry than comparable costs to domestic mills.
This is because (l) American cotton is said to reach foreign mills in poor
condition, and (2) in foreign markets American cotton meets strong competition
not only from manmade staple fiber but from foreign-grown cotton, which gener-
ally reaches the spinners in a package which provides better protection to the
cotton.

k. Even estimates of the total increase in direct marketing costs for
American cotton due to the undesirable aspects of the existing package as it
reaches the mills do not show the whole picture . These costs have indirect
effects on prices, farm value, production, competitive position, consumption,
and exports of American cotton.

It is contemplated that in subsequent phases of the project, efforts will
be made to determine at least some of the other costs attributable to the
American cotton bale package. In addition, it has "been proposed that costs
and other data be obtained for foreign countries similar to those given for
the United States in this report.

A number of factors help to account for the shortcomings of the average
American bale package and for the condition of the outer surface of the bales
upon reaching the mills. One factor which has received a great deal of at-
tention during the last few years is the bale cover itself. A summary of the
industry's efforts to find an improved cover and some of the main difficulties
involved is given in a report of May 1957 ^y "the National Cotton Council. 8/

8/ National Cotton Council. The Search for a Better Bale Package for Cotton.
May 1957-

- 18 -

In this report the Council recognized that the solution to this prohlem is
greatly complicated hy two traditional marketing practices. These are (l) the
cutting of from 2to32ormore sampling holes in the hale covers, each of which
is generally 18 to 20 inches long and k to 6 inches wide, and (2) gross -weight
trading with the accompanying standard tare allowances.

In the industry's rather extensive experimental hale cover program "many
efforts have "been made to develop practical ways of opening and closing sam-
pling holes," hut up to now no satisfactory solution to the prohlem has "been
found (see footnote 8). However, mechanical sampling devices, which during
1957-58 sampled "between 200,000 and 300,000 hales during the ginning process,
show promise of providing a partial solution to this phase of the packaging
prohlem. In addition to providing a sample more representative of the overall
contents of the hale, the automatic samplers make it possible for the hales
to reach the mills in "better condition than would otherwise have heen the case.
Many of these hales have heen delivered to mills with no sample holes having
heen cut in the hagging.

The domestic system of gross-weight trading, together with the weight and
the comparatively low price per pound of the conventional jute hagging, repre-
sent a comhination which greatly reduces the ahility of other materials, in-
cluding cotton fahrics, to compete for the hale cover market. Under the ex-
isting system the prices paid for cotton include an allowance of 21 pounds
per hale for hagging and ties, ahout 12 pounds of which is hagging. This
means, for example, that in order for a light-weight material (as most of the
experimental covers tested have heen) to compete with jute, there would need
to he a downward adjustment in the tare allowance and an upward adjustment in
the price per pound for cotton wrapped with the lighter hagging. Otherwise
farmers' returns for a given amount of lint cotton would he reduced.

Bale tare is considered to he a partial waste to the mills and as such,
naturally is reflected in the prices paid. However, under gross -weight
trading, adjustments in prices for hales with appreciahly more or less tare
than that now allowed cannot he expected unless the marketing system provides
adequate means of recognizing and trading in such hales. Even with the adop-
tion of a single new cover differing in weight from the present cover, two
sets of pricing and trading practices would he necessary until the previously
produced hales were largely disposed of. Adoption of two or more new covers
of different weights would further complicate the marketing of American cotton.
Net -weight trading, on the other hand, would avoid such difficulties and per-
mit the ready adoption and use of any types or weights of material which
could measure up to certain minimum industry specifications .

5k

* U S GOVERNMENT PRINTING OFFICE : 1958 — 470345