33 



While many associations handle tobacco furnished almost exclusively 

 by member patrons, others market a substantial volume for non-member 

 patrons. The associations handling large amounts of tobacco for non- 

 members must control such business carefully in order to maintain their 

 exempt status, and thus qualify for Federal tax benefits. Federal 

 statutes require that an association's business with member patrons 

 equal or exceed 50 percent of its total business for a letter of 

 "exemption" to be granted. 



Of all cooperative member and nonmember patrons, an average of 44 

 percent sold their crops in burley tobacco auction warehouses operated 

 by two central associations. Local associations operating burley and 

 flue-cured tobacco auction facilities served 40 percent of all coopera- 

 tive patrons. The remaining cooperative patrons, almost 16 percent 

 of the total, sold their dark tobaccos through association facilities 

 handling these types. However, the central association handling dark- 

 fired tobacco served an average of over twice as many patrons as the 

 two locals marketing dark air-cured crops. 



The average sale value of tobacco marketed per patron during the 10 

 marketing seasons, 1952-53 to 1961-62, is shown in table 17 for associ- 

 ations marketing the various tobacco types. 



The sale value of the patron's tobacco crop is determined both by sale 

 price received on the auction floor and by quantity of tobacco marketed. 

 The difference existing between the average sale value of tobacco 

 marketed by patrons of local and central associations handling burley 

 tobacco was due primarily to the larger quantities of tobacco marketed 

 by individual patrons of the central-type associations. 



While flue-cured tobacco generally sold at a somewhat lower price than 

 burley, the quantity marketed per patron was substantially higher than 

 that for associations marketing any other type. This resulted in flue- 

 cured tobacco marketing associations handling highest dollar sale volumes 

 per patron. Associations marketing dark tobaccos handle patron volumes 

 which are small and which sell at a relatively low price. Thus, the 

 average sale value of tobacco furnished by individual patrons of these 

 organizations is considerably lower than that for those handling other 

 types. 



Sale and Price Features 



In a previous section of the report, a pattern of first sales and 

 resales was established for markets handling different types of tobacco. 

 This pattern also applies to cooperative auction warehouses operating 

 in these markets. Association warehouses handling burley and the dark 

 tobaccos market a higher proportion of their total sales as first sales 

 than do cooperative facilities handling flue-cured tobacco. 



