8 MISC. PUBI.ICATTOy 14, IT. S. DEPT. OF AGRICULTURE 



potatoes, in the case of which there usually is a wide variation in 

 pricp between early, mid-season, and late maiketin<rs, this factor 

 should l)e c-onsidererl in deterniinin<£ the len«rth of the poolinj^ period. 

 Tiie i)ooIin<r ananurerncnt should aim to reflect back to the jjrower 

 bis normal |irice advan(a<^es. Tbat is. the j^rower who, by special 

 productive elfort. succeeds in j^ettin^' his product ready for market 

 (hiring the hiirh-price periods of the season should be rewarded for 

 I his extra care. 



From the standpoint of cdicient mana<rement, it may be desirable 

 to have a pool which extends over a lon«r period of time in order to 

 assist the or<rani/.ation in its pro<;ram of marketing. On the other 

 hand, the financial situation ot the individual growers often requires 

 a jiool of short dui'ation. 'J'he value of money is not the same to 

 all growers. The longer the pooling |)eriod, the more complex is the 

 credit situation to some growers. In other words, the financial cir- 

 cumstances of some growers often make it dillicult for them to 

 market through a seasonal pool. 



In considering the time element in pooling from the stand|)oint of 

 eflicient management, the degree to which a cooperative can adjust 

 its operating methods to meet grower demands and yet maintain busi- 

 ness efficiency varies. It varies not only with the inherent charac- 

 teristics of the commodity but with the way in which each a.ssocia- 

 I ion's commodity articulates with the market for the commodity. 

 A cotton cooperative association has as potential customers 4.()U() to 

 5,000 juocessors (mills) to wliich it can sell its cotton in comi)ara- 

 tively small lots, whereas the New York Dairymen's League must 

 deliver the aggregate product of thousands of producers to a few 

 large distributors. 



Cooperative associations are beginning to recognize the necessity 

 for developing pools of varying duration to fit the different needs 

 of individual growers. Take, for example, the large-scale cotton 

 c(M)perative associations organized in the Southern States in 1920 

 and 10'21. During the first years of their ojieration these associa- 

 tions pooled entirely on a seasonal basis, but during the last two or 

 thiee years several of these associations have changed their method 

 of operation and have established pools varying in length of time. 

 Diiily i)ools, 30-day pools, and seasonal pools are now common, and 

 the farmer is given the right to choose the particular time pool to 

 which he wishehi his product to go. The daily pools are, in reality, 

 merelv an airangement wjieieby the as.^ociation acts as agent. This 

 fact might lea<l some pi'()j)le to cease to classif}' the cotton associations 

 as strictly pooling organizations. 



AVith nonpeiMshable conunodities, such as whent and cotton, the 

 operation of short-time pools may be materially assisted by the use 

 of the organized exchanges, which provide future price quotations. 

 'J'ake, for instance, the oi)eration of daily cotton pools, in which the 

 grower is permitted to choose the time of sale. In case a spot sale 

 for that particular (juantity can not be made on the date chosen by 

 the glower, the association sells an ecpiivalent (|uantity on the futures 

 market. This hedge is li(iuidated at some futui'e date when the 

 actual cotton is disposed of^ through the spot market outlets of the 

 association. 



The theory of a seasonal pool in a cooperative association handling 

 a conunodity that is harvested annually during a comparatively short 



