The Role of the USDA Cotton Classification System and Certified Cotton Warehouses in the US Cotton Circulation System

Darryl W. Earnest
Deputy Administrator
USDA, Agricultural Marketing Service, Cotton Program
Washington DC, USA
Good evening. It is an honor and pleasure to be here in Urumqi and to speak at this 2007 China International Cotton Conference. The primary purpose of my presentation is to discuss the USDA cotton classification system and to explain how such a system builds demand and facilitates marketing of cotton.
The Cotton Program is part of the USDA’s Agricultural Marketing Service and is responsible for providing instrument and manual cotton classification on all cotton grown in the United States. The Cotton Program is also responsible for producing cotton standards, providing cotton market news information and providing oversight of cotton demand building programs through research and promotion.
The Cotton Program is headquartered in Washington, DC with twelve field offices located from coast to coast in the southern U.S. Each of the twelve field cotton classing offices is responsible for providing cotton classification service in its respective cotton growing region. The office in Memphis, Tennessee serves as a field classing office and also as the base for field operations. The functions of cotton standards production, quality assurance, market news, information technology and administration are all carried out in Memphis.
Cotton Classification Process
I would like to begin with an explanation of the cotton classification process.
The USDA cotton classification system today utilizes a total of 294 High Volume Instrument (HVI) systems, approximately 2000 instrument operators, approximately 300 cotton graders, or “classers” as we refer to them, and a permanent management and administrative staff of over 100.
The manual classer is responsible for leaf grade and detection of extraneous matter while the instrument measures micronaire, strength, length, length uniformity index, color Rd, color +b, color grade and percent area of trash.
The cotton classification process actually begins at the cotton gin when the bale exits the bale press. Standardized procedures are followed to ensure that bales are sampled from both sides and that a standardized Permanent Bale Identification (PBI) tag is inserted into the sample. Sample sizes must conform to weight and size specifications. Samples are then securely transported to classing office facilities by USDA contracted carriers.
Samples are unloaded and brought through an air-lock into the properly conditioned air environment of the classing facility. Samples are removed from the sacks, placed into vented plastic trays, conditioned to the proper moisture level, instrument tested first and manual classed second. The data is automatically transmitted to the central computer system and made ready for dissemination to the cotton industry.
An essential part of the classification process is the Quality Assurance Program. One percent of all samples tested by the twelve USDA cotton classing facilities are randomly selected by computer and sent by overnight shipment for retesting in the Quality Assurance Lab in Memphis. After retesting, the results in the form of various reports are provided back to each classing office to ensure that accurate and consistent testing is maintained in all locations.
Each classing office has its own centralized computer system that collects the data from each instrument and from each manual classer within the facility. Data is immediately available to local gin customers through the Internet or by modem directly from the classing office computer. In addition, each classing office computer is networked to the National Database mainframe computer in Memphis where all classification data is gathered and stored. From the Memphis computer database, all USDA cotton classification data is available by Internet to mills, merchants and other authorized USDA government agencies.
During the 2005 cotton classing season, the USDA Cotton National Database System was accessed nearly 60,000 times by 188 customers of whom 31 were outside the U.S. to download over 27 million bale records. For the 2006 cotton classing season, the database has been accessed about 39,000 times by 168 customers of whom 32 were outside the U.S. to download over 23 million bale records. The data access numbers for the 2006 crop will rise a little more as the last of the 2006 crop is marketed.
The USDA Cotton Program performs instrument and manual cotton classification on the entire U.S. cotton crop. The 2004 and 2005 U.S. cotton crops were the largest in U.S. history. The USDA classed 22.6 million bales in 2004 followed by 23.3 million bales in 2005. For the most recent 2006 crop, the USDA classed another large crop of 21 million bales.
There are many benefits of instrument classification such as optimized textile mill utilization of cotton. With HVI data on cotton bales, mills can obtain optimum quality cottons necessary for specific yarn manufacturing needs without having to overbuy to ensure that spinning performance standards are not compromised. Second, the cotton producer benefits by obtaining accurate and fair valuation of his cotton thus providing improved marketability for cottons that may otherwise be undervalued in the market. And finally, HVI classification will improve cotton’s competitiveness with synthetic fibers when textile mills have greater confidence in using cotton that is supplied with known properties.
Cotton Classification Standards
Good standardization of the cotton classification process provides cotton fiber quality measurements in a common language that serves both marketing and textile utilization purposes on an international scale. Cotton classification standards include both physical calibration standards and established procedures and practices.
The cotton classification standards established and produced by the Cotton Program are known as Universal Cotton Standards and are governed by the international cotton industry through the Universal Cotton Standards Agreement. These standards are made up of calibration cotton standards for HVI calibration of length, strength, uniformity index, micronaire, color Rd and color +b. Additionally, standardized HVI procedures for operation, calibration, and measurement verification are also part of the Universal Standards.
The Universal Standards are prepared by the USDA Cotton Program on an annual basis to serve the demands of the world cotton industry. Each year, over 20,000 kilograms of calibration cottons and over 250 sets of color and trash calibration materials are prepared for distribution.
In addition, approximately 3,000 Universal Upland grade standard boxes and 340 Pima grade standard boxes are prepared.
Both instrument and grade standards are distributed on an annual basis to the USDA’s cotton classing offices in addition to cotton testing locations throughout the world. The USDA Cotton Program provides cotton standards to over 50 countries each year. Major users include China, Australia, Uzbekistan, India, Brazil and others.
Classification of Certificated Stocks
Another important service provided by the USDA Cotton Program is the classification of cotton for delivery on cotton futures contracts.
The Cotton Program provides classification services for all cotton that is tendered for delivery on futures contracts at the New York Board of Trade. This classification service is authorized through the U.S. Cotton Futures Act and through an agreement between the Cotton Program and the New York Board of Trade.
Cotton Program personnel work closely with the representatives of the New York Board of Trade to ensure that all rules and regulations are followed. Samples submitted for certification must be drawn and submitted by a warehouse licensed by the Cotton Program and approved by the New York Board of Trade. These warehouses must also be located in one of the five delivery points approved by the New York board of Trade.
The approved delivery points are Greenville, SC; Memphis, TN; New Orleans, LA; Houston, TX; and Galveston, TX.
The same environmental controls, sample conditioning procedures, calibration procedures and in-house check procedures utilized by the classing offices when providing classing information on new crop samples are also utilized for the classification of samples submitted for certification.
Each sample submitted for certification is tested on two separate HVI systems. The individual test results from the two HVI systems are averaged for micronaire, strength, length, length uniformity, HVI percent area, color rd and color +b. The average result for each quality factor is released as the official certification classification result. The samples are classed by two separate Cotton Program classers to determine the appropriate leaf grade and to identify any type of extraneous matter present.
Samples must be of tenderable qualities in order to be delivered on futures contracts.
In order to be certificated, a bale must meet the following tenderable qualities:
Color Grades:
For White Cotton: Color Grades: 11–51 with Leaf Grade 1–5
For Light Spot Cotton: Color Grades 12-32 with Leaf Grade 1-3
Staple Length: 1 1/32” (33/32) or Longer
Micronaire: 3.5 – 4.9 Units
Strength: 25 Grams per Tex or Higher
Furthermore, the classification of cotton submitted for certificated cotton is performed without knowledge of any previous classification that may have been assigned to the bales of cotton. Each time a sample from a bale is submitted for certification, it is assigned a new warehouse bale number. The Permanent Bale Identification number or PBI is not included in the information provided to the Cotton Program with the samples submitted for certification.
The certificated classification data are stored in the Quality Assurance Branch computer system. The certificated stock classification database is maintained separately from the Cotton Program’s National Database which contains the original classification data from new crop cotton. An official classification document is prepared that lists the quality determinations for each bale certificated. The classification documents also list those bales that are not tenderable for any quality factor. This information is provided to the certificator, the New York Board of Trade and to the warehouse that submitted the samples in order to generate new warehouse receipts for the bales.
The volume of certificated cotton classification has steadily been increasing since 2003. The volume has increased from nearly 300,000 bales in 2003 to over one million bales in 2006.
Building Demand for Cotton
Building demand for cotton is an essential part to ensuring cotton’s future success. The USDA Cotton Program facilitates cotton demand building activities in the U.S. by overseeing the collection and utilization of funds utilized for demand building activities.
In the U.S., a small assessment on each bale is paid by cotton growers and importers for funding research and promotion activities for cotton. Funding for agricultural and textile research ensure continued improvement in agriculture production and textile utilization of cotton. Funding for advertising ensures that the public continues to be educated on the advantages of cotton over other competing fibers.
Conclusion I would like to conclude by emphasizing the importance of moving worldwide to instrument based cotton classification. For cotton to compete successfully with synthetic fibers in the future, cotton suppliers must be able to provide detailed and accurate fiber quality information to textile mills. This high level of cotton quality information is only available through instrument based cotton classification.
Acknowledgements I would like to acknowledge two people who helped me with this paper. The first is James Knowlton – Chief of our Standardization and Engineering Branch of AMS Cotton Program in Memphis, Tennessee, USDA who co-authored the paper and drafted many of the slides shown today..
The second is Lee Gibson, Chief of the Quality Assurance Branch of AMS Cotton Program and also located in Memphis, Tennessee who served as a content contributor.
Thank you
I thank both of these gentlemen for their assistance.
That concludes my remarks this evening. Thank you all very much for your attention.