22 BULLETIN 14S8 ; U. S. DEPARTMENT OF AGRICULTURE 
DIFFERENCE IN VALUE BETWEEN GRADES 
In judging the advantages of one grade of cotton over another 
grade several factors should be considered: Cost of the raw stock, 
storage and handling charges, quantity of waste discarded, value of 
waste, number of machine hours required to handle the cotton, and 
selling price of yarn. 
To illustrate the relative importance of these factors, the writer 
has derived a formula based on estimated average conditions. The 
following discussion of these factors may aid in the interpretation of 
the formula. 
The differential in price of raw stock, both of the low grades and 
of the high grades on the basis of Middling cotton, fluctuates with 
supply and demand. However, the five-year average prices in cents 
per pound for grades 1 to 9, respectively, based on the average of the 
10 designated spot cotton markets as of the first day of each month, 
September 1, 1920, to August 31, 1925, inclusive, are as follows: 24.83; 
24.46; 24.06; 23.60; 23.02; 22.05; 20.73;19.59; 18.47. 
Except in special cases the total storage and handling charges are 
greater for low-grade cotton than for high-grade cotton when the 
same given quantity of finished yarn is desired. 
The lower the grade, the higher the waste percentage. Table 
No. 4 shows the waste percentage to range from 5.50 on grade No. 1 
to 14.44 on grade No. 9. The value of this waste depends upon 
supply and demand. The estimated prices or relative values at the 
time of these tests, however, were found to range from one-fourth 
cent per pound for picker motes from grade No. 9 to 17 cents per 
pound for card strips from grade No. 1. At this time grade No.l 
cotton was quoted around 25 cents per pound. (See Figure 13 for 
approximate relative values of waste and average prices of cotton 
as above given.) 
The cost for picking and carding in this formula is figured on the 
machine-hour basis rather than on pounds delivered. The cost of 
operating the card per hour on low-grade cotton is as much as, and 
in some cases more than, the machine-hour cost for high-grade 
cotton. This cost per hour prevails whether the card is producing 
or being ground. More frequent grinding of the card is required 
when low grades are being run. As an example, most cards need 
grinding after 1,200 to 1,500 pounds of low-grade cotton have been 
fed, whereas 1,600 to 2,200 pounds of high-grade cotton may be run 
before grinding is required. Therefore the number of hours lost in 
grinding is greater when low grades are carded. 
The price of yarn fluctuates as well as the differential in price 
between yarns from different grades of cotton. Therefore this 
price factor can be determined only at the time when the problem 
arises, using the prices as of that period. 
The gross weight of cotton required to produce a given quantity 
of yarn from any grade of cotton may be determined by dividing the 
pounds of finished yarn by 1 minus the percentage of total waste 
expressed decimally. 
This formula is not to be interpreted as a system of cost account- 
ing, but values obtained by the usual cost systems may be substi- 
tuted in the formula for the purpose of obtaining the practical 
difference between the grades under consideration. 
