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Cotton futures classing moved to regional offices

In recent years, as cotton sample numbers grew and the expense involved in testing them increased, those leading the USDA’s cotton classing operation looked for a more streamlined, cost-conscious manner to do their work.

They came up with several solutions that have worked out so well it’s unlikely many of their customers even know of the changes.

Last spring, the Memphis USDA office tasked all three Mid-South classing offices with futures classification. The same was done with the Southeast office in Macon, Ga.

“Greenville, S.C., is one of the delivery points for cotton,” says Robbie Seals, USDA Grading Branch chief, based in Memphis. “There’s a large warehouse there. Rather than have the warehouse ship samples here, we had them send the futures samples to Macon.”

The USDA’s Quality Assurance Branch is responsible for oversight of cotton quality functions within the cotton program. A large part of that involves daily samples pulled randomly by computer after field office classification.

“Those samples are sent overnight to us here in Memphis,” says Lee Gibson, chief of the Quality Assurance Branch. “We retest those samples to make sure all the classing offices are on the same level.

“We’re also responsible for the supervision of any cotton delivered for classification for futures class — bales that will be delivered for the New York futures market.”

There are several reasons futures samplings were sent to the satellite offices.

“One thing is we were getting overwhelmed with the volume of samples,” says Seals, who oversees the day-to-day operations of 12 classing offices in nine cotton-producing states.

“It was a lot of cotton for us to go through and maintain timely service to merchants certificating the bales. It threatened to put us behind.”

During the season’s busy period, classing offices can be hit with big receipts. “It’s highly unpredictable, but sometimes we’ll have 15,000 to 20,000 futures per day and a month when there’s 300,000 to 400,000. That’s a lot of work.”

The second reason for the shift is all seasonal employees in the USDA offices are limited to six months of work at a time (or 1,039 hours). This was a severe hindrance because the last two cotton crops have produced huge yields.

“(The large yields meant) work seasons have been longer than usual. That took away much of the time seasonal employees once had to work. In Memphis, when those employees weren’t classing futures, they were running the quality assurance program. So, over the last two record crops, a lot of those employees’ time has been exhausted.”

With so much of the future’s classing going to Memphis, the employees “used up all their time,” says Larry Creed, area director of USDA’s Dumas, Ark., classing office. “That means they had to hire fresh employees and train them.

“Not only that — we also had to detail some of our field office graders to Memphis to help out. We like to have supervisory personnel to make the final class. That was another expensive practice because they were drawing per diem.”

Moving the futures grading into the field offices not only saves money “but we’re also able to continue grading samples with trained operators. No per diem has to be paid and, as an added incentive, it gives the field workers additional employment — something they wanted.

“It’s not often you can honestly say something is win/win. But this situation was exactly that. Since making this move, we’ve managed to return data to customers much more quickly than we would have otherwise. The transition to this was very smooth. There wasn’t even a bobble.”

The Dumas office classes all Mississippi Delta cotton and about half of Arkansas’ crop. In total, “we get about 90 percent of Mississippi’s cotton and some 45 percent of the cotton grown in Arkansas.”

One other change at the Dumas office is rapidly approaching: Creed’s retirement after 35 years on the job.

“Larry is my friend and exactly what the cotton program should stand for,” says Seals. “We should be providing good, quality, timely service. Larry lives and breathes concern for his work. He’s always strived to have a good relationship with our customers. Farmers are certainly first on his list of folks to keep happy. He’s going to be hard to replace.”

Creed, who plans to remain in southeast Arkansas for the time being, vows that the transition to new office leadership will be smooth.

“The people we have in place have been around the loop and know what’s expected. I feel very comfortable nothing will be sacrificed with my leaving. Maybe it’ll even be better — my mother always said, ‘A new broom sweeps clean.’ I hope that’s the case here.”

Creed suspects his replacement will be announced by the end of July.

Until then, there’s work left to do. The Corpus Christi, Texas, office is on the verge of beginning to class cotton.

“Normally, they get their first bale at this time of year. So we’re just around the corner from starting to work with the 2006 cotton crop. The Rayville, La., office will be next up. Dumas will get into cotton around mid-September.

“There’s a lot of prep work going on in the field offices in anticipation of harvest. We’re moving machines around and, once they’re in place, we’ll begin precision and accuracy testing on them. We’ll have them calibrated and ready once the crop starts moving through.”


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