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San Joaquin Valley cotton bale tag system posing dilemma

Each year thousands of cotton bales are shipped from the San Joaquin Valley to textile mills worldwide with an orange tag on them containing an ominous warning.

These bales hold cotton from varieties trudging through three years of mandatory testing by the San Joaquin Valley Cotton Board in hopes of becoming “approved” Pimas or Acalas. If they win that designation, the orange tags disappear.

The variety has not changed, but according to some growers there is a difference in the price they receive for tagged and untagged cotton.

That orange tag is one of three colored tags that by law must be placed on so-called “non-approved” San Joaquin Valley cottons. The other two are a pink tag for “California Uplands” and blue tag for cottons which are neither going through the testing program or are “California Uplands.” Hybrid Hazera cottons are blue tagged. These tags are in additional to regular bale tags.

“California Uplands” are commercial cotton varieties grown elsewhere in the U.S. Cotton Belt, but because they were grown in the one-quality San Joaquin Valley Cotton District they must by California law be segregated with the tags. They were allowed in the valley about five years ago as insurance against a very late spring planting window when growers could not be assured of making longer season Acalas and Pimas.

No other cotton producing area in the nation requires these tags, and the tags do not reflect the HVI government classing quality evaluation of the lint inside.

The tags are another element of an 80-year-old institution still often called the San Joaquin Valley One-Variety Law. One-variety was changed to one-quality when the USDA got out of the cotton breeding business in the 1970s and the valley was opened up to all commercial seed companies. At the same time the industry created a quasi-governmental variety testing entity controlled by producers to ensure that the Acala quality was preserved with new varieties. It was empowered to provide the same quality assurances when Pima cottons were introduced into the valley more than a decade ago.

To preserve integrity

It was established to preserve the integrity of Acala and later Pima cottons grown in the six-county one-quality cotton district of Kern, Kings, Tulare, Fresno, Madera and Merced counties.

Those tags have been an exasperating problem because some growers believe they attach a stigma to the bales as if skull and crossbones were plastered on the side of these bales. They claim they are paid discounted prices because of the tags. They believe they should be paid on the classed value of the cotton. Merchants acknowledge that mills pressure for discounted prices for some tagged cottons.

While nettlesome to some, it has not been a major issue, until now, because the acreage of experimental cottons has historically been low, only about 20,000 acres, according to Mike Colvin, California Department of Food and Agriculture representative to the San Joaquin Valley Cotton Board. That represents about 60,000 bales.

However, the issue is about to explode into a million-bale dilemma.

It boiled to the surface several weeks ago at the 5th U.S. Pima Industry Seminar in San Diego, Calif., when Dunavant of California president Rodger Glaspey announced that as much as half of Pima cotton produced form the San Joaquin Valley this season — as many as 250,000 bales — would be decorated with orange tags along with the regular bale tags.

Glaspey surfaced the impending quandary and initiated an impromptu public relations campaign to head off discounts mills may seek on those bales and perhaps future large quantities of orange-tagged cotton.

Ironically, Dunavant likely will not handle any of the 250,000 bales of experimental Phytogen 800 Pima in 2003. It will all be from J.G. Boswell Co., the valley's largest Pima grower. Boswell can do that because it is part owner of Phytogen with Dow AgroSciences.

Jeff Elder, Boswell vice president of marketing, said Boswell is keeping all Phytogen 800 for its growing operation and he would not discount the cotton from the “experimental” variety below the Pima market price. As the largest Pima marketer in the U.S., Boswell has that leverage.

Phytogen 800, which entered the SJVCB testing as Phytogen 601, is in its third year of board testing this season and is not eligible for official release until March 2005.

Glaspey's proclamation surprised Calcot sales vice president John Burch, who checked the HVI data on Phytogen 800 when he returned to his Bakersfield, Calif., office and pronounced Phytogen 800 an “incredible” quality Pima that does not warrant discounts. He looks forward to the when Calcot can market the cotton to its customers.

Phytogen 800 is not the only cotton involved this growing colored bale tag stigma this season. There is Phytogen Acala 710R that may be grown on 10,000 acres. It is non-approved and would get the orange tag.

At one time it was illegal to grow non-approved cottons. Now that the valley is fully open to all cotton varieties, the tag problem will likely get more ominous. If a seed company has a highly promising variety, it could “blow up” seed production quickly in the valley and at winter nursery sites resulting in thousands of bales being stigmatized and possibly with the tags before the cotton is released.

The issue was brought before the SJVCB in March, but no action was taken. It will require a change in the law to modify the tags.

That obvious growth in orange-tagged SJV cotton this season and likely in the future prompted Glaspey to attempt to change textile mill perception of California orange-tagged bales at the Supima conference where he launched a campaign to change the “experimental” moniker to “developmental.”

He called the orange tag a sign that the cotton exceeds the SJVCB-set standards against which new cottons are measured and should not be considered discount cotton. He acknowledged that mills have used those tags to negotiate down prices.

Glaspey says the orange tag signifies the cotton is longer, stronger and with the Pima a more consistent color than mills have been receiving from the San Joaquin Valley.

The standards against which new cottons are evaluated are Acala Maxxa and Pima S-7, neither of which is widely planted in the valley any more.

Maxxa accounted for a little more than 10 percent of the valley's Acala acreage last year and S-7 less than 2 percent. Phytogen 72 was the most widely planted Acala last season with more than 43 percent of the acreage. Phytogen 76 was the most widely planted Pima with almost 67 percent. Phytogen has not petitioned the cotton board to designate any of its varieties as standards.

Maxxa is a California Planting Cotton Seed Distributor variety, but CPCSD has two other varieties, Riata RR and Sierra RR, which together accounted for 37 percent of the valley's acreage last season. Fiber qualities of the newer Phytogen and CPCSD varieties, which at one time were orange-tagged cotton, far exceed Maxxa and S-7.

In many parts of the U.S., the San Joaquin Valley is envied for its Acala cottons, which nets premiums to growers over other upland growths. Even “California Uplands” from the valley gets premiums. Lint from anon-Acala upland cotton variety grown in the San Joaquin Valley will bring aprice premium above the fiber from the same variety grown in Arizona or any other Cotton Belt state.Growing conditions are ideal through the summer and fall in the San Joaquin Valley and this creates what mills call the “X” factor often assigned to SJV cotton because of its superior spinning quality. They are willing to pay more for that “X” factor.

However, the often cumbersome evaluation system has been criticized within the valley for denying valley growers improved varieties sooner as well as new technology, such as herbicide-resistance. For growers, ginners and merchants outside the valley, it is the source of good-natured ribbing.

Southwest Irrigated Growers executive vice president Hans Kretschmer was on the same marketing panel as Glaspey, Elder and Burch. After listening to Glaspey's impassioned and somewhat torturous explanation of SJV bale tags, he offered SWIG Pima and Acala cotton from New Mexico, Arizona and Texas sans colorful tags. His offer drew a big laugh.

Notes confusion

Burch acknowledged the tagging system on non-approved Acalas and Pimas can be cumbersome and confusing. He said Calcot has been forced to discount some orange-tagged experimentals. “Some of the cottons in the testing program have not had good fiber properties,” he said.

However, Calcot marketed 80,000 bales of Phytogen 72 at a premium before it was approved. “Mills knew the HVI data on that variety and paid a premium for it before it was released,” he added.

“The San Joaquin Valley is a special place to grow quality Acala and Pima cotton and whatever costs and confusion there may be in this tagged cotton is outweighed by the benefits of the system,” said Burch. “In the long term, the added prices we get for our cottons make it worthwhile.”

Nevertheless, the colored tag stigma will likely not go away. It remains another hurdle in maintaining the mantle “SJV Cotton,” a designation recognized worldwide for exceptional, consistent quality cotton. It's all about status quo.

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