COTTON: COMPARISONS OF MODIFIED FLAT AND UNIVERSAL …

ÄER 9i0otîJ 357

*^^W 6 1977

afp

COTTON: COMPARISONS OF

MODIFIED FLAT AND UNIVERSAL DENSITY

PRESSES By

Dale L. Shaw and Joseph L. Ghetti

U.S. Department of Agriculture Economic Research Service

Agricultural Economic Report No. 359

COTTON: COMPARISONS OF MODIFIED FLAT AND UNIVERSAL DENSITY PRESSES, by Dale L. Shaw and Joseph L* Ghetti. Commodity Economics Division, Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 359.

ABSTRACT

Capital requirements and operating costs were developed and analyzed using economic-engineering techniques to develop average cost and breakeven volimies for modified flat and universal density bale presses. Specifications and costs were developed for two sizes of presses in both modified flat and gin universal densities. Variable costs were developed for 30 different combinations of hourly processing rates and total hours of seasonal operation for each press type.

Relative baWñg cost and revenue received for uniyérèal density compression were considered. The breakeven point between universal density and new modified flat b,ale press operations ranged from 3,850 bales at 12-bales^per- hour plants tg^ 5,117 bales at 2 4^b ale s-par-hour plants.

When/an older, operatij^hal flat bale press was replaced by a new universal pressa breakeven volumpê were about 45 .percent higher for the 8- and 12- bale-pej^hour plants. They were 41 percent higher for 16-, 20-, and 24-bâle- per-hour plants. ^__y

Keywords: Cotton, cotton ginning, models, investment^ economic engineering, volume.

Washington, D.C. 20250 January 1977

ii

CONTENTS Page

Summary vi

Introduction. 1

Objectives 2

Method and scope of study 2

Analysis of sample data 3

Capacity of gins 3

Bale packaging. 4

Bale dimensions • • 6

Platen separation and densities pressed 6

Bale thickness, density tie-out, and volume 6

Bale weight, thickness, and density 10

Processing, pressing, and electrical energy used.... 10

Labor requirements and tie-out time 16

Total operating hours, press downtime, and modification costs ..••..... 19

Total operating hours and volumes ginned 22

Universal density and modified flat bale presses 24

Machinery specifications and costs 25

Operating expenses ..•.•••.... 29

Compression revenue 40

Determining the type of press to install.. 41

Replacing an existing press 43

Implications 44

iii

TABLES

Table Page

1 — Sample gin and rated capacity, by area and type of press, 1973/74 season 4

2 — Net bale weights, bagging weight, and tie weight, by area and type of press, 1973/74 season 5

3 — Press box area, bale lengths and widths, by area and type of press, 1973/74 season 7

4 — Platen separation and density pressed, by area and t3rpe of press, 1973/74 season 8

5 — Bale thickness, density, and volume, by area and type of press, 1973/74 season 9

6 — Net bale weight, thickness and density, by area, and type of press, and size, 1973/74 season 11

7 -- Average number of bales processed each hour by area and type of press, 1973/74 season....... 13

8 — Average time required to press bales, by area and type of press, 1973/74.................. 14

9 —- Size of electric motors used in press and tramper operation, by area and type of press, 1973/74 season.. 15

10 — Amount of electrical energy used and cost by area and type of press, 1973/74 season...... 17

11 — Crew sizes, operating presses, and gins, by area and type of press, 1973/74 season 18

12 — Average time required to tie-out bales, by area and type of press, 1973/74 season. 20

13 — Amount of crew labor time used to process each bale, by area and t3rpe of press, 1973/74 season 21

14 —• Estimated total gin operating hours, loss time through press breakdown, problems because of modification, and cost of modification, by area and type of press, 1973/74 season 23

15 — Average annual volume, net bale weight, crew size, processing rate, and hours of operation, by area and by designated volume intervals of each type of press, 1973/74 season...... I...... 26

iv

Table Title Page

16 — Installed costs of universal density and new modified flat bale presses, by processing capacity, 19 75 •. 28

17 — Annual fixed costs for universal density and new modified flat bale presses, by processing capacity, 19 75 30

18 — Average press crew requirements 32

19 — Labor cost per season for operating gin presses, by processing rates, type of press, and hours of operation, 19 75 34

20 — Total seasonal volumes and operating costs per bale for gin presses, by processing rates, type of press and hours of operation, 1975 36

21 — Breakeven volumes at different rates of compression allowances for universal density presses, compared with new modified flat presses, by gin plant size 42

22 — Breakeven volumes at different rates of compression allowances for universal density presses, compared with existing modified flat presses, by gin plant size. •.••••••• • •••... 43

V

SUMMARY

With present compression allowances and differences in costs for bagging and tying cotton, installation of universal density presses rather than new flat bale presses seems economically justified. Replacing an existing modified flat bale press with a universal density press alâo seems Justified in some gins under present conditions. Accordingly, a sizeable expansion in the installation of imiversal density presses appears feasible from an economic standpoint.

This study was based on a survey of 18 gins with universal density presses and 16 gins with modified flat bale presses in California-Arizona, West Texas, and the Louisiana-Mississippi Delta during the 1973/74 season. Costs, problems, practices, and performance characteristics associated with the type of bale were compared. Gins were visited in midseason to observe and time ginning, pressing, and tying-out of bales. Linear measurements of bales were made and weights recorded to calculate bale densities. After the ginning season ended, each gin was revisted to obtain information on total ginning volumes, seasonal power consumption, costs, and other annual operating performance and cost data needed to develop the economic analyses of pressing operations.

Rated hourly ginning capacity of gins equipped with modified flat bale presses averaged 12.8 bales per hour compared with 19.2 bales for gins equipped with universal density presses. Actual processing and baling rates were 11.8 and 16.4 bales per hour, respectively, and average net weights were 495.1 and 490.0 pounds.

Density varied considerably among individual bales. It was 11.1 to 18.9 pounds per cubic foot for modified flat bales and 19.8 to 33.9 pounds for universal density bales. Average densities for the three surveyed areas were 14.1 pounds per cubic foot for modified flat bales and 27.6 pounds for universal density bales. In West Texas, 82 percent of all universal density bales fell within the range of 476-525 pounds, compared with about 62 percent in the other areas. Only 59 percent of the modified flat bales in the Louisiana-Mississippi Delta were in this range.

Presses were powered by ptimp and tramper motors averaging 49.1 horsepower for modified flat presses and 204.7 horsepower for universal density presses* Modified flat bale presses were operated by an average of 3.7 crew members, compared with 4 on universal density presses. Press crew labor required per bale averaged 20.1 minutes for modified flat presses and 15.7 minutes for universal density presses.

Ginners' estimates of downtime caused by a breakdown of the press assembly ranged from none to as much as 360 hours. Gins in West Texas lost the most time because of press breakdown, and those in the Louisiana-Mississippi Delta lost the least. None of the operators of Louisiana-Mississippi Delta gins with modified flat bale presses reported pressing problems because of press modification, but 38 percent of the California-Arizona operators and 50 percent of the West Texas operators reported problems.

vi

Data collected from the surveyed gins varied appreciably among presses because of differences in age, design, and other factors. So the economic- engineering approach was used to compute and analyze the cost of installing and operating new presses. On this basis, the cost of installing universal density presses was $225,000 late in 1975 for presses with capacities of up to 15 bales per hour and $265,000 for presses capable of maintaining rates of from 16 to 24 bales per hour. The investment cost of new flat bale presses was $85,000 for the smaller models, and $95,000 for the larger ones. The investment cost for old, existing flat bale presses was $25,000 for the smaller sizes and $30,000 for the larger models.

Average variable expenses per bale for universal density press models ranged from $1.41 for an 8-bale-per-hour gin processing 4,000 bales per'season to $0.71 for a 24-bale-per-hour plant processing 60,000 bales per season. Coit^ parable variable expenses for modified flat bale press models were $2.25 and $0.93 per bale, respectively. Average fixed expense per bale for both types of presses decreased as volumes increased. Differences in fixed cost per bale between the two types of presses decreased from $4.72 per bale more for universal density presses in the 8-bale-per^hour model operating 500 hours per season to only $0.39 per bale more for the 24-bale-per-hour model operating 2,500 hours per year.

Expenses for labor accounted for approximately 80 percent of total variable expenses for universal density presses and 95 percent for modified flat bale presses. In all models, depreciation accounted for 52 percent of total fixed cost; interest on Investment, 29 percent; taxes, 15 percent; and insurance, 4 percent. When combined, these made up 13.5 percent of the total investment.

In deciding which type of press to install, a point of indifference occurs. This is the point, or breakeven volume, at which the total cost is the same for pressing a given volume of cotton when using either type of press.

When relative baling costs and revenues received for compression were considered, the breakeven point between the two types of operations ranged from 3,850 bales at 12-bale-per-hour plants to 5,117 bales at 24-bale-per-hour plants. The breakeven volume for plants with capacities of 8-, 16-, and 20- bales-per-hour was 3,893, 4,934, and 5,042, respectively. When replacing an older, existing flat bale press with a universal density press, the breakeven volume was about 45 percent higher for the 8- and 12-bale-per-hour plants. It was 41 percent higher for the 16-, 20-, and 24-bale-per-hour plants.

Vll

COTTON: COMPARISONS OF MODIFIED FLAT AND UNIVERSAL DENSITY PRESSES

By i/ Dale L. Shaw and Joseph L. Ghetti

INTRODUCTION

The traditional American system of packaging cotton at gins has been criticized in both foreign and domestic markets from the very beginning. The packaging of some American cotton has improved in the last several years. But generally most segments of the industry agree that further improvements are feasible and desirable.

Until the past few years, U.S. cotton has been put up in bales of five different dimensions and densities, with different sizes of bales being shipped to domestic and foreign mills. Progress, however, has been made in regard to bale density and related technology, largely through the coordinated efforts of all segments of the cotton industry. Through these efforts, the industry has developed and obtained acceptance of a universal density bale (about 28 pounds per cubic foot) for both foreign and domestic shipments, thus eliminat- ing the need for standard and high density pressing.

Because of these changes, some gins have installed presses capable of pressing bales to universal density specifications. But the high initial cost has resulted in only a small number of gins (about 100) having this equipment at the present time. Many gins, however, have modified their flat bale presses to conform with bale size specifications necessary to press to universal densities at the compress. Moreover, it is expected that for the 19 76 crop most gins, with the exception of those in the Southeast where cotton generally moves to the mill without compression, will be either equipped with universal density presses, or will have their presses modified to produce uniform size bales for compression to universal density at the compress. Although the universal bale has been widely accepted by the cotton trade, little information has been

1./ Agricultural Economists, Fibers Program, Commodity Economics Division, Economic Research Service, stationed at Lubbock, Tex., and Stoneville, Miss., respectively.

available on the effectiveness of the modified flat and \miversal density presses, or on the comparative cost of baling cotton by these alternative methods in gins of differing volumes and capacities.

Objectives

Tills study evaluates how modified flat and universal density presses, the two types most commonly used, compare in performance, operation and ownership cost. Specific objectives of the study were to—

Provide current information on the performance characteristics of gins equipped with modified flat and universal density presses.

Evaluate differences in cost to ginners installing, maintaining, and operating new modified flat bale presses as compared with the more powerful, newer type, universal density presses.

Provide sound economic bases and procedures for use in determining when the replacement of existing pressing equipment with newer, more powerful universal presses is jttstified.

Method and Scope of Study

Hie study was limited to gins in three major cotton-producing areas^— California-Arizona, West Texas, and the Louisiana-Mississippi Delta—^where most of the newer t3rpes of presses were located. Only two type of gin presses were included in the study—modified flat bale presses and the universal density presses.

In 1973/74, 18 gins with universal density presses were selected for study. This group represented about 20 percent of the universal density press operations known to exist at the time, and it provided a representative cross section as to press design. Arrangements were also made for 16 gins that used modified flat bale presses to participate in the study.

Separate electrical meters were placed on press pumps and on tramper motors, when powered independently, at gins in the Louisiana-Mississippi Delta. These measured electrical power used for baling. The submeters were read a minimtmi of three times during the ginning season, and kilowatt-hours used and bales ginned were recorded.

Gins were visited in midseason to observe and time the ginning, pressing, and tying-out of bales. Linear measurements (length, thickness, and width) of 25 consecutive bales were made at each gin with commercial bale calipers, and weights and other data were recorded to calculate bale densities. During this visit, observations were made and recorded on the press crew size, gin crew, and the overall gin plant operation. After the season, each gin was revisited, and information was obtained on manhours expended, wage rates, power consumption and cost, press repairs, press downtime, operating hours.

and total ginning voltjme. Total taxes, insurance, depreciation, depreciation rates, plant investment, press cost, and other items of fixed costs were also secured.

Since the period studied, substantial increases have occurred in the general price level, particularly for steel-related products needed in the ginning industry. Under these circumstances, actual costs for a fixed period diminish in practical value over time. Moreover, most modified flat bale presses included in the study were installed in the early sixties, and nearly all universal density presses have been installed within the past 2 to 3 years. Because of the wide variations observed in costs beti'-reen the two types of presses at study gins, the economic-engineering approach was used to develop and analyze the installed costs and operating expenses for the two types of presses. Cost and performance data on which the analyses are based were obtained from gin manufacturers, sales representatives, and through personal observations of ginning operations. Specifications and cost quotations for each type of press represent 1975 values. These values were used because it was recognized that the reported installed cost of bale presses would greatly understate 1975 differences in cost between flat bale presses and the newer universal density types.

Also, operating expenses as reported by study gins varied appreciably with location, power rates, wage rates, depreciation rates tised, insurance, taxes, the length of the ginning season, and other factors. The economic- engineering approach used in this study tends to minimize variations in both installed costs and operation costs by adjusting for variations in capital outlays for presses and by standardizing operating rates and cost rates. Therefore, any differences in the installed costs or operating costs between the two types of presses are a function of the press type.

ANALYSIS OF SAMPLE DATA

This section of the report includes information obtained on modified flat bale presses and universal density presses for the 1973/74 ginning season. Ranges and averages by geographic area and press type are reported.

Capacity of Gins

Hourly ginning capacity based on the manufacturers' rating of the gin complex, ranged from 9 to 24 bales per hour, and averaged 12.8 bales per hour at gins equipped with modified flat bale presses (table 1). The ginning capacity of the 18 gins equipped with the newer universal density presses ranged from 10 to 30 bales per hour and averaged 19.2 overall.

Table 1—Sample gin and rated capacity, by area and type of press, 1973/74 season

Area and press : Sample gins :_ Rated capacity ll

Range • Average

California-Arizona: ; Modified flat. • • :

Number

8 ; 7

4 4

: 4 : 7

: 16 : 18

Bales

9-12 10-28

9-18 16-30

18-24 18-28

9-24 10-30

per hour

9.4 Universal density....:

West Texas: : Modified flat. :

14.1

12.0 Universal density....:

Louisiana-Miss. Delta: Modified flat

23.2

20.2 Universal density....

Ar eas c omb ine d : Modified flat

22.0

12.8 Universal density.... 19.2

1/ Based on manufacturers' rating of gin stand complex.

Bale Packaging

Of the 850 bales observed at the study gin in all three areas, the net weight of modified flat bales ranged from 370 to 624 pounds and averaged about 495 pounds (table 2). Universal density bales averaged about 5 pounds less in weight than modified flat bales and ranged from 360 to 587 pounds. Among the individual areas, the Louisiana-Mississippi Delta revealed the widest range in bale weights in both density groupings, and West Texas had the narrowest.

Bagging weights were similar in all regions for modified flat bale presses, ranging from 11 to 13 pounds and averaging 11.4 pounds. Modified flat bales generally were covered with open-weave jute bagging. In comparison, bagging weights for universal density bales ranged from 2 to 10 pounds, and averaged 5.5 pounds. Universal density bales were wrapped in a variety of materials, including plastic bags and sheets, sugar bag cloth, cotton cloth, and jute.

Modified flat bales were generally bound with manually applied ties, weighing an average of 9.7 pounds. Most universal density bales were tied with mechanically strapped ties, weighing 4 to 5 pounds, and the few manually applied ties averaged 11 pounds for an average of 6 pounds*

Table 2—Net bale weights, bagging weight, and tie weight, by area and type of press, 1973/74 season 1/

Area and press Net bale weight Bagging weight Range Average Range : Average

Tie weight Range Average

California-Arizona: Modified flat..... Universal density.

West Texas: Modified flat Universal density

Louisiana-Mississippi Modified flat.... Universal density

Areas combined: Modified flat Universal density.

409-567 493,1 387-548 482.7

419-569 495.4 398-557 503.0

370-624 498.8 360-587 489.8

370-624 495.1 360-587 490.0

Pounds per bale

11-13 4-10

11-11 2-10

11-11 2-10

11-13 2-10

11.8 6.5

11.0 6.0

11.0 4.3

11.4 5.5

9-10 4-11

10-10 4-5

10-10 5-11

9-10 4-11

9.4 6.8

10.0 4.8

10.0 5.9

9.7 6.0

ll All bale weights are for the 25 bales which were measured consecutively at each plant.

Bale Dimensions

Although cotton bales generally expand an inch or two in each direction after release from the press box, bale size is established according to the dimeiîons (length and width) of the press box. Press box dimensions vary slightly among makes and models. The most common modified flat bale box dimensions are 24 by 54 and 24.5 by 54 inches, and those for universal density presses are 20 by 53 and 20 by 54 inches. Press box areas averaged 1,302.6 square inches for modified flat bale presses and 1,070.8 square inches for xiniversal density presses (table 3). Finished modified flat bale lengths ranged from 54 to 58.5 inches and averaged 56.1 inches, and universal density bale lengths ranged from 52.5 to 57.2 inches and averaged 54.6 indies. The differences between measured bale length and press box length are largely because of bulkiness of the bagging applied over the ends of the bale.

Platen Separation and Densities Pressed

Bales were routinely pressed to approximately the same thickness, regardless of weight. However, wide variations were noted in the distance the rams traveled in pressing the bale. As a result, bale densities also varied considerably.

Platen separations ranged from 28.8 to 36.4 inches and averaged 33 inches at modified flat bale presses. Resulting bale densities ranged from 14.7 to 25 pounds per cubic foot and averaged 19.9 pounds per cubic foot (table 4). Platen separation at universal density presses ranged from 18 to 24 inches and averaged 20.8 inches, producing bale densities of 25.5 to 47*2 per cubic foot and averaging 38.2 pomids.

Bale Thickness, Density Tie-out, and Volume

Bale thickness is determined principally by the distance traveled by the ram or rams in pressing the bale. However, wide ranges in bale thickness were noted at the gins studied, because of variations in bale weights, the presence or absence of "stops" governing ram travel distance, and the use or nonuse of fixed-length bale ties or automatic strapping equipment. For the three areas combined, modified flat bales ranged in thickness from 38.8 to 47.6 inches and averaged 42.8 inches, compared with universal density bales ranging from 25 to 31.8 inches and averaging 27.3 inches (table 5). The corresponding volume averages were 35.2 and 17.8 cubic feet per bale.

Gin-modified flat bale presses are designed to produce finished bales with densities of as much as 15 pounds per cubic foot, and universal density presses have design capabilities of at least 28 pounds. At the gins studied, density varied considerably among individual bales. It ranged from 11.1 to 18.9 pounds per cubic foot for modified flat bales and from 19.8 to 33.9 poimds per cubic foot for universal density bales. Average densities for the three areas combined were 14.1 pounds per cubic foot for modified flat bales and 27.6 pounds for universal density bales. Presses in the Louisiana- Mississippi Delta showed the widest range in bale density for both modified flat and universal density bales, and those in West Texas had the narrowest

range.

Table 3—Press box area, bale lengths and widths, by area and type of press, 1973/74 season Xf

; Press box area ; Bale length ; Bale width Area and press ; Range : Average ; Range : Average : Range : Average

: Square Inches __---. ^ Inches --------

California-Arizona: : Modified flat : 1296-1323 1299.4 55,8-58.5 56.7 24.8-26.5 25.4 Universal density. : 1055-1080 1064.3 53.5-57.2 54.8 20.1-21.2 20.8

West Texas: : Modified flat : 1296-1323 1309.5 55.0-56.0 55.6 24.8-25.5 25.1 Universal density .: 1060-1080 1070.0 54.0-54.8 54.5 20.2-20.5 20.4

Louisiana-Mississippi Delta: : Modified flat ...: 1296-1320 1302.0 54.0-56.2 55.4 24.0-28.0 25.6 Universal density : 1060-1140 1077.7 52.5-55.0 54.5 20.0-21.0 20.6

Are as comb ine d: : Modified flat : 1296-1323 1302.6 54.0-58.5 56.1 24.0-28.0 25.4 Universal density : 1055-1104 1070.8 52.5-57.2 54.6 20.0-21.2 20.6

ll All bale measurements are for the 25 bales which were measured consecutively at each press, Measurements were made within 30 minutes after the bales were released from the press.

Table 4^—Platen separation and density pressed^ by area and type of press, Vèl^llk season 1/

Area and press : Platen separation : Density pressed : Range : Average ; Range : Average

• - - Inches - - Pounds per cubic foot

California-Arizona: : Modified flat ...: 28.8-36.4 32.9 16.6-23.5 20.0 Universal density .....: 18.0-24.0 20.0 33.0-47.2 39.4

West Texas: : Modified flat : 29.0-35.0 32.8 16.7-22.8 20.0 Universal density : 20.0-21.5 20.8 31.8-43.0 39.1

Louisiana-Mississippi Delta: : Modified flat : 32.5-35.0 33.4 14.7-25.0 19.8 Universal density... : 20.0-24.0 21.5 25.5-44.4 36.6

Areas combined: : Modified flat : 28.8-36.4 33.0 14.7-25.0 19.9 Universal density : 18.0-24.0 20.8 25.5-47.2 38.2

\l All bale measurements are for the 25 bales which were measured consecutively at each press. Measurements were made within 30 minutes after the bales were released from the press.

Table 5—Bale thickness, density, and volume, by area and type of press, 191311 h season 1/

Area and press : Rale thickness . • Density tipd-out; : Average : Range : Average : Range : Average : volume

: - - Inches Pounds per cubic foot Cubic feet

California-Arizona: Modified flat : 38.8-46.8

: 25.0-31.8 43.7 26.8

11.5-15.5 22.4-31.9

13.6 27.4

36.4 Universal density 17.7

West Texas: : Modified flat. : 38.8-47.6

25.6-30.8 42.0 28.0

12.4-16.2 23.0-30.7

14.6 28.0

33.9 Universal density : 18.0

Louisiana-Miss. Delta: : Modified flat : 39.0-47.2

25*1-29.2 41.7 27.5

11.1-18.9 19.8-33.9

14.6 27.4

34.2 Universal density : 17.9

Areas combined: : Modified flat : 38.8-47.6

25.0-31.8 42.8 27.3

11.1-18.9 19.8-33.9

14.1 27.6

35.2 Universal density ; 17, 8

1/ All bale measurements are for the 25 bales which were measured consecutively at each press. Measurements were made within 30 minutes after the bales were released from the press.

Bale Weight, Thickness, and Density

As previously stated, bales at most gins studied were routinely pressed to approximately the same thickness regardless of weight. This practice was especially typical at gins pressing bales to universal density, and it catised bale densities to vary directly with bale weights. Average densities of modified flat bales ranged from 11.1 pounds per cubic foot for bales weighing 375 pounds or less to 17.6 pounds for bales weighing 576 or more pounds (table 6). Densities of universal density bales averaged as low as 20.6 pounds per cubic foot for bales weighing 375 pounds or less and as much as 32.9 pounds for bales weighing 576 pounds or more. About 67 percent of all universal density bales weighed from 476 to 525 pounds and averaged 499.4 pounds. Average density for this group was 27.9 pounds per cubic foot. Universal density bales exceeding 525 pounds exceeded the minimum requirements for tiniversal density bales of 28 pounds per cubic foot and averaged more than 29 pounds per cubic foot. For all areas combined, universal density bales averaged 27.6 pounds per cubic foot —^slightly less than the minimum requirements.

Ginners for the most part maintained bale weights well. For example, 82 percent of the universal density bales in West Texas were in the 476-pound to 525-pound range, and about 62 percent of the bales in the California-Arizona and Louisiana-Mississippi Delta areas were in that range. However, 26.4 percent of the bales in the Louisiana-Mississippi Delta and 35.4 percent of those in California-Arizona weighed 475 pounds or less, but only 8 percent of the universal density bales in West Texas fell within this range.

Processing, Pressing, and Electrical Energy Used

During the observation period, ginning time was recorded for each bale, and the gin processing rate—480-pound net weight bales per hour—was developed for each plant. Processing rates ranged from a low of 7.1 bales per hour at a California-Arizona gin producing modified flat bales to a high of 23.5 bales at a gin equipped with a universal density press in the Louisiana-Mississippi Delta (table 7). Similar to rated capacity, average processing rates were higher at plants with universal density presses in all three geographic areas. For the three areas, average processing rates were 11.8 bales per hour for the modified flat presses and 16.4 for universal density presses.

Time recordings made during the survey showed that an average of 46.3 seconds were required to press a modified flat bale and 38.4 seconds for the universal density bale (table 8). Average pressing time, however, varied considerably from press to press.

Pressing time was mainly determined by the number and size of the press ptmips and motors used. Generally, plants with ginning capabilities exceeding 24 bales per hour had much faster pressing time than lower capacity plants because of increased motor size and pumping capabilities. Pumps on modified flat bale presses, for example, were driven by electric motors averaging 30.3 horsepower, compared with an average of 172.2 horsepower for universal density presses (table 9). Similarly, the average tramper horsepower was 32.5 for universal density presses and 18.8 for the modified flat bale presses.

10

Table 6—Net bale weight, thickness, and density, by area, type of press, and size, 1973/74 season \J

Area and size,

by weight in pounds

Modified flat bales

:Distribution: Average net: Tie-out : Tie-out : by weight : weight : thickness : density

Universal density bales

Distribution: by weight :

Average net weight

Tie-out thickness

Tie-out density

: Percent

California-Arizona: : 375 or less : 0 376-425 : 2.0 426-475. ...: 17.0 476-525 : 74.0 526-575 : 7.0 576 or more : 0

Total or average : 100.0

West Texas: : 375 or less : 0 376-425 : 2.0 426-475 : 14.0 476-525 : 76.0 526-575 : 8.0 576 or more : 0 Total or average : 100.0

Louisiana-Miss. Delta: : 375 or less : 1.0 376-425 : 0 426-475 : 23.0 476-525 : 59.0 526-575 : 14.0 576 or more : 3.0 Total or average : 100.0

Pounds

416.2 463.9 497.3 541.9

493.1

Inches Pounds per cubic foot Percent Pounds

41.9 43.8 43.6 44.8

11.9 12,8 13.7 14.5

0 2.3

33.1 62.3 2.3 0

100.0

402.2 462.6 494.4 537.5

43.7 13.6 482.7

Inches

25.8 26.1 27.1 27.2

26.8

Pounds per cubic foot

23.1 26.7 27.8 29.3

27.4

419.0 42.4 12.4 3.0 412.3 27.0 23.8 451.1 41.3 13.6 5.0 468.4 27.4 26.8 501.1 42.1 14.7 82.0 504.2 ¿7.9 28.2 539.0 43.0 15.6 10.0

0 100.0

538.1 29.4 28.6

495.4 42.0 14.6 503.0 28.0 28.0

370.0 41.5 11.1 1.7 365.7 27.8 20.6 — — — 3.4 389.2 27.7 22.0

462.3 41.1 14.4 22.3 460.1 27.0 26.9 499.8 41.9 14.4 62,3 500.7 27.7 27.7 540.6 41.9 15.2 8.6 534.1 27.6 29.3 607.3 41.6 17.6 1.7 582.3 27.3 32.9 498.8 41.7 14.6 100.0 489.8 27.5

Continued,-

27.4

to

Table 6 —Net bale weight, thickness, and density, by area. type of press, and size. 1973/74 season ll —Continued

Modified flat bales Universal density bales Area and size, :

by weight in pounds : Distribution: Average net Tie-out : Tie-out Distribution: Average : Tie-out : Tie-out by weight : weight : Thickness : density by weight : net weight : thickness : density

Pounds per Pounds per

Percent Pounds Inches cubic foot Percent Pounds Inches cubic foot

Areas combined: 375 or less .2 370.0 41.5 11.1 .7 365.7 27.8 20.6

376-425 ... 1.5 417.2 42.1 12.0 2.9 398.5 26.9 22.7

426-475 : 17.8 460.9 42.4 13.5 22.7 461.9 26.5 26.8

476-525 : 70.8 498.8 42.8 14.1 66.6 499.4 27.6 27.9

526-575 : 9-0 540.8 43.3 15.0 6.4 536-0 28.2 29.1

5 76 or more : .7 607.3 41.6 17.6 .7 582.3 27.3 32.9

Total or average : 100.0 495.1 42.8 14.1 100.0 490.0 27.3 27.6

— Means that no volumes fell in this category, 1/ All bale measurements are for the 25 bales which were measured consecutively at each press.

30 minutes after the bales were released from the press.

Measurements were made within

Table 7—Average number of bales processed eadi hjour by area and type of press, 1973/74 season 1/

Nxjmber of bales processed each, hour by :Average number a press with a rate of— ! of bales

Up to 12 bales : 12 bales or moire ; processed Range ¡Average : Range lAverage : each hour

Area and press

Calif omia-Arizona : Modified flat Universal density.

West Texas: Modified flat Universal density...

Louisiana-Miss. Delta: Modified flat , Universal density...

Areas combined: Modified flat , Universal density...,

7.1-10.8 9.4-11.9

7.6-10.4 10.1-11.9

7.1-10.8 9.4-11.9

9.6 10.6

9.1 11.0

11.9-11.9 11.9

9.4 11.0

13.4-13.9 12.2-20.8

14.2-23.3

15.4-19.7 14.5-23.5

13.4-19.7 12.2-23.5

13.6 18.4

18.8

16.8 18.5

15.7 18.5

10.6 16.2

9.1 14.9

16.8 17.5

11.8 16.4

~ Means that no sample presses were in that category. \J Net weight of each bale is 480 pounds.

13

Table 8 —Average time required to press bales» by area and type of press, 1973/74 season 1/

Area and press

Average pressing time for a press with a processing rate per hour of—

ïïp to 12 tales 12 bales or more Range Average ; Range ; Average

Average pressing

time

California-Arizona: Modified flat Universal density.

West Texas: Modified flat Universal density.

Louisiana-Miss. Delta: Modified flat Universal density...

Areas combined: Modified flat Universal density.

35-60 43-62

49-84 38-59

38-38

35-84 38-62

46.8 52.5

64.5 48.5

38.0

53.9 48.0

Seconds

34-44 24-47

18-55

21-46 26-42

21-46 18-55

39.0 33.4

36.5

30.5 35.3

33.3 34.8

44.9 38.9

64.5 42.5

30.5 35.6

46.3 38.4

ll All bale measurements are for the 25 bales that were measured consecutively at each press during the season. Measurements were made within 30 minutes after the bales were released from the press.

.14

Table 9—Size of electric motors used in press and tramper operation by area and type of press, 1973/74 season

Area :Size of press pump : processing rate

for a press with a per hour of—

:Average _:size of _: press

: pump

:Size of tramper for a press with : cessing rate per hour of—

a pro-: Average size

and press • 7TT^ ^-r» 1 9 Kalôo ' 12 bales or more verage

: Up to 12 :_ Range :

bales Average

: 12 bales : Range

or more : ¡Average :

of : Range : Average : Range :A tramper

California-Arizona: Modified flat Universal densitv«- ......••.

25-40 100-150

. 15-25 : 100-100

Î 150-150

15-40 100-150

30.0 125.0

20.0 100.0

150.0

26.0 120.0

25-25 125-250

125-375

25-75 140-225

25-75 125-375

Total horsepow

25.0 28.8 197.0 176.4

20.0 250.0 175.0

43.8 43.8 169.2 166.4

37.5 30.3 192.3 172.2

er

15-25 20-20

5-15 50-50

20-20

5-25 20-50

16.7 20.0

12.5 50.0

20.0

15.0 32.0

15-25 20-50

30-30

15-50 15-50

15-50 15-50

20.0 32.0

30.0

27.5 34.2

25.0 32.7

17.5 28.6

West Texas: Modified flat 12.5 Universal densitv...•.....•. 40.0

Louisiana-Miss. Delta: Modified flat Uní Vi^rsal d^TTîtv- ..««<•..■•*

27.5 32.1

Areas combined: Modified flat. 18.8 Unii/eTâl dencjitv. .......••. 32.5

—Means that no sample presses were in that category.

Average kilowatt-hours used per bale ranged from 37.2 to 89.4 In gins equipped with modified flat bale presses, compared with a range of from 40.4 to 88.4 in gins equipped with universal density presses (table 10). Kilowatt- hours used per bale averaged 64.2 for gins with universal density presses and 55.8 for those producing modified flat bales. Larger press pumps and tramper motors no doubt accounted for some of the additional energy consumed at plants equipped with these presses. In order to isolate power consumption and expenses for the baling operation, electrical meters were installed on each press motor or motors and each tramper motor in a sample of gins in the Louisiana- Mississippi Delta. These gins were selected so that the different sizes and make of gin presses now in operation are represented.

The kilowatt-hour consumption per bale by the tramper in the modified packaging system averaged 0.40 and varied from 0.17 to 0.95. The highest con- simiption was by hydraulic trampers and the lowest by mechanical ones. Kilo- watt-hour consximption per bale by modified flat bale pumps varied from 0.13 to 0.38. Total energy consumed by both the press and tramper averaged 0.54 kilowatt hours per bale.

Universal density packaging systems generally require more electrical energy than do modified flat systems, mainly because larger press pumps and tramper motors were used. Energy needed, for example, to operate the tramper in a universal density system varied from 0.18 to 1.58 kilowatt-hours per bale. Again, more energy was needed for hydraulic trampers than for mechanical ones. Total electrical energy required to operate press pumps on universal density presses varied from 0.87 to 3.60 kilowatt-hours per bale. Total energy requirements per bale for press pumps and tramper motors averaged 2.63 kilowatt-hours .

Labor Requirements and Tie-out Time

Several factors enter into total gin crew requirements as well as the press crew size determinations. Chief among these are size of gin plant, rate of ginning, degree of gin and press automation, the use or nonuse of mechanical samplers, the type of wrapping and strapping material iised and their application, and other fxmctions performed by the crew.

Gin crew size ranged from 5 to 18 persons (table 11). For all areas combined, crews at gins equipped with modified flat bale presses averaged 8.9 persons and those at gins equipped with universal density presses averaged 10.6 persons.

To compare areas and press types, press crew size was recorded separately from the total gin crew size. Moreover, time spent by the press crew in tending the mechanical sampler and the trash handling equipment, hauling bales, moving trailers, and performing other nonpress related responsibilities was recorded and eliminated as a fimctlon of the packaging operation. At the plants studied, press crew size ranged from 2 to 7 persons. For all areas combined, press crew size in plants equipped with modified flat bale presses ranged from 2 persons in gins with processing rates of up to 12 bales per hour to 5 persons in gins with processing rates of 12 or more bales per hour. At

16

Table 10—Amount of electrical energy used and cost by area and type of press, 1973/74 season

Area and press

Energy used per bale by a press with a processing rate per hour of—

Up to 12 bales 12 bales or more Range : Average : Range Average

Average :Energy cost per bale by a press with a :Average use : processing rate per hour of— : cost per : Up to 12 bales : 12 bales or more : per

bale : Rangé : Average : Range : Average : bale

California-Arizona: Modified flat Univers al dens i ty...

West Texas: Modified flat Universal density...

Louisiana-Miss. Delta: Modified flat Universal density...

Areas combined: Modified flat Universal density...

38.1-72.9 66.2-67.5

62.9-65.7 62.1-88.4

41.3-41.3

38.1-72.9 41.3-88.4

Kilowatt hours

53.0 66.9

64.0 75.3

57.9 65.1

50.0-50.0 60.0-72.6

67.1-80.5

37.2-89.4 41.3 40.4-75.7

37.2-89.4 40.4-80.5

50.0 66.3

73.8

52.6 59.4

52.1 63.7

52.5 66.6

64.0 74.5

52.6 56.8

55.8 64.2

Dollars

0.84-3.00 1.40 1.48-1.51 1,50

1.27-1.51 1.39 1.21-2.06 1.63

1.12-1.12 1.12

.84-3.00 1.40 1.12-2.06 1.48

0.94-0.94 0.94 1.27-1.51 1.41

1.24-1.93 1.59

1.28-2.91 1.76 1.26-2.96 1.88

.94-2.91 1.60 1.24-2.96 1.70

1.33 1.44

1.39 1.61

1.76 1.77

1.46 1.63

Table 11—Crew sizes, operating presses, and gins, by area and type of press, 1973/74 season

Area •

Press crew cess

size for ine rate

a press with per hour of—

a pro-: Average press crew size

Total gin crew size : a processing rate

for a press with per hour of —

Average gin

and press - U-D to 12 bales : 12 bales or more : : , Up to 12 bales 12 bales or more crew

Range : Average : Ranse :Average : Range ■ : Average : ^^^^^ : Average : size

California-Arizona: ' MhH-i fi pfî f Tat. : 2.0-4-5

2.5-3.5

3.0-4.0 3.0-4.0

6.0-6.0

: 2.0-4.5 : 2.5-6.0

3.6 3.0

3.5 3.5

6.0

3.6 3.8

2.5-3.0 3.0-4.2

4.0-4.0

4.0-5.0 3.0-7.0

2.5-5.0 3.0-7.0

2.8 3-8

4.0

4.5 4.3

3.9 4.1

Nijmber

3.4 5-12 3.6 8-10

3.5 7-8 3.8 7-12

4.5 4.6 13-13

3.7 5-12 4.0 7-13

9.3 9.0

7.2 9-5

13.0

8.5 10.0

8-9 8-12

12-14

8-12 6-18

8-12 6-18

8.5 9.8

13.0

10.2 11.0

9.7 10.8

9.1 9.6

West Texas: : Modified flat

7.2 11.2

Louisiana-Miss. Belta: Modified flat

10.2 11.3

00

Areas combined: Mofli f T PH f 1 at

8.9

TTfii \Te^y^fii 1 HPTI'î'Î tv •>>.■ .•....• 10.6

1/ Excluded proportion of press crew members time spent tending mechanical samples, hauling bales to bale yard, moving trailers, and other nonpress related responsibilities.

gins equipped with universal density presses, crew size ranged from 2.5 persons in the lower capacity grouping to 7 persons in the higher capacity gins. But based on the average of all areas coniîned, only slight differences were noted in press crew sizes between gins equipped with modified flat presses and those with universal density presses. One additional press crew member was employed at both press types in the Louisiana-Mississippi Delta than in either West Texas or the California-Arizona areas, resulting in average labor requirements of 4.5 persons for modified flat presses and 4.6 persons for universal density presses, respectively.

Average elapsed time required to tie-out universal density bales was slightly more than a second longer than the time required for modified flat bales, even though a number of the gins employed automatic strapping units (table 12). Tie-out time ranged from 33 to 72 seconds per bale and averaged 53 seconds for modified flat bale presses. Comparable tie-out time for universal density presses ranged from 21 to 86 seconds per bale and averaged 54.2 seconds for all areas combined. Similar to pressing time, tie-out time averaged less for gins with higher processing rates.

Minutes of labor required per bale also gives some indication of the relative efficiencies of the packaging systems studied. Minutes of labor required were developed for each plant based on press crew size and average pressing rates. Press crew labor per bale for modified flat bale presses ranged from 10.8 to 37.9 minutes and averaged 20.1 minutes for the three areas combined (table 13). Corresponding values for universal density presses ranged from 7.7 to 30.3 minutes and averaged 15.7 minutes. Compared with the gins operating at lower processing rates, gins operating at higher rates generally used less labor per bale even with larger crews. When average processing rates are taken into consideration, there appears to be no substantial differences in minutes of labor required per bale among the three areas or between the two types of presses observed.

Wider differences, however, were noted in total gin crew requirements between the two types of presses. For example, total minutes of labor required per bale ranged from 29.7 to 101.2 at gins equipped with modified flat bale presses, compared with 17.9 to 71.2 minutes per bale at gins equipped with universal density presses (table 13). These wide ranges in labor use point out the vast differences encountered in gin operations as well as the efficient or inefficient use of labor. Moreover, a few gins employed one or two "extra" crew members to assist with known problem areas, to provide rest periods for other crew members, and to fill in if a regular crew member failed to report for work.

Total Operating Hours, Press Downtime, and Modification Costs

Annual operating hours of a particular gin or within a given area are dependent upon many conditions, such as size of the crop, weather conditions during harvest, use or nonuse of seed cotton storage, and volume ginned. Annual operating hours at study gins were approximately the same for both types of presses in a given area (table 14). For all areas combined, total operating hours averaged 1,449.4 at gins with modified flat bale presses and 1,384.7 at those equipped with universal density presses. As a result of the

19

Table 12 —Average time required to tie-out bales, by area and type of press, 1973/74 season 1/

Area : Average tie-out time for a press opera-! tlon with a processing rate per hour of [ Average

and press : Up to 12 hales : 12 bales or more Range : Average : Ränge : Average

Seconds

California-Arizona: : Modified flat : 49-72

: 43-59 60.5 51.0

50-67 37-68

58.5 47.6

60.0 Universal density..-* 48.6

West Texas: : Modified flat........ : 41-63

: 63-73 53.8 68.0 21-83 52.0


Louisiana-Miss. Delta: Modified flat

: 61-61 61.0 33-45 39-86

38.2 55.8


Areas combined: Modified flat........ : 41-72

: 43-73 57.8 59.8

33-67 21-86

45.0 52.1

53.0 Universal density.... 54-2

If All bale measurements are for the 25 bales that were measured consecutively at each press. Measurements were made within 30 minutes after the bales were released from the press.

20

Table 13 —Amount of crew labor time used to process each bale, by area and type of press, 1973/74 season 1/

Area and press

Press crew labor time 2J needed to pro-:Average cess each bale in a press operation : time with a processing rate of— : for

Up to 12 bales ' 12 bales or more : press Ranê i Average : Range : Average : crew

:Total crew labor time needed to pro- : cess each bale in a press operation

with a processing rate of- 11 bales or less 12 bales or more Range Average: Range :Average

Average time for all

labor



Louisiana-Miss. Delta: Modified flat Universal density....

Areas combined: Modified flat..... Universal density.

11.9-37.9 16.0-17.7

17.2-31.6 17.8-20.1

30.3-30.3

11.9-37.9 16.0-30.3

22.9 10.8-13.5 12.1 16.9 11.7-14.8 12.8

23.7 18.9 10.3-16.9 13.6

15.2-18.2 16.1 30.3 7.7-28.6 15.1

23.2 10.8-18.2 14.8 20.4 7.7-28.6 14.0

Minutes

20. 13.

23. 16.

16.1 17.3

20.1 15.7

29.7-101.2 60.2 35.9-38.8 48.1- 54.5 51.3 26.0-39.5

40.2-63.2 49.1 35.1-71.2 53.1 30.9-59.1

31.0-43.6

65.6- 65.6 65.6 17.9-61.3

29.7-101.2 55.7 31.0-43.6 35.1- 71.2 54,9 17.9-61.3

37.4 54.5 32.8 38.1

49.1 45-0 49.0

36.5 36.5 36.5 41.8

36.8 48.6 37.0 41.9

\J All bale measurements are for the 25 bales that were measured consecutively at each press. Measurements were made within 30 minutes after the bales were released from the press.

_2/ Excluded proportion of time press crew members spent tending mechanical samples, hauling bales to bale yard, moving trailers, and other nonpress-related responsibilities.

large 1973/74 cotton crop and the use of seed cotton storage. West Texas gins operated nearly thrice as many hours as those in the Louisiana-Mississippi Delta and the California-Arizona areas.

Ginners' estimates of downtime caused by breakdown of the press assembly, including tramper and automatic strapping units, ranged from none to as much as 360 hours. West Texas gins lost the most hours and Louisiana-Mississippi Delta gins the least because of required press repairs. Lost ginning time because of press assembly failure resulted from a variety of mishaps, such as broken oil lines, leaking valves, malfunctions of electrical controls, broken door arms and dogs, alignment, and other startup problems with new universal density press installations, tramper breakdowns, automatic strapping systems failure, and motor burnouts.

Operators of the modified flat bale presses were asked, "Have you encountered any problems which you attribute to the modification?" None of the operators in Louisiana-Mississippi Delta plants reported problems. Operators in California-Arizona and West Texas plants attributed 43 and 50 percent, respectively, of their problems to the modification. Problems reported included overheating and burnt-out press and tramper motors, broken oil lines, broken door arms, dogs and tramper drives, and reduced baling rates. These problems were caused by increased pressure in the narrower bales. Some operators also indicated that these problems were further compoijnded, especially in the West Texas area, by the extremely large crop and excessively dry cotton being ginned, which in turn increased pressures on the physical capacity of the equipment.

Modification costs averaged $804.00 for all presses studied, and varied from $500 to $2,418 (table 14)• West Texas gins had the lowest cost, averaging $537 and California-Arizona gins the highest at $937.

Total Operating Hours and Voltimes Ginned

Operating hours increased as the annual volume ginned rose, except for the Mississippi-Louisiana Delta gins producing universal density bales (table 15). The average processing rate also increased with annual volume for the modified flat bale plants in each area. California-Arizona and Louisiana- Mississippi Delta gins, producing between 5,000 and 9,999 universal density bales, had hourly processing rates which exceeded those of gins turning out over 15,000 bales. For both press types, 50 percent of the observed plants fell in the 5,000- to 9,999-bale volume interval. Comparing the two type of presses, a slightly higher proportion of the gins with universal density presses pressed more than 10,000 bales.

22

Lu

Table 14 —Estimated total gin operating hours, loss time through press breakdown, problems because of modification, and cost of modification, by area and type of press, 1973/74 season

Area and press



Louisiana-Miss. Delta: Modified flat....... Universal density...

Are as comb ine d: Modified flat Universal density.

Operating hours 1^

Range Average

Press dovmtime 2/

Range Average

:Press problems : because of : modifications

Cost of modification

Range Average

Hours

960-2,006 818-1,659

1,540-2,880 1,664-2,758

670-1,250 750-1,353

670-2,880 750-2,758

1,299.1 1,266.4

2,245.2 2,095.5

916.5 1,096.9

1,449.4 1,384.7

5-100 9-114

65-322 10-360

0-24 0-25

0-322 0-360

52.5 41.9

188.2 131.5

11.5 10.7

79.6 49.7

Percent

42.9 NA

50.0 NA

0 NA

31.2 NA

- - Dollars - -

2/625-2,418 NA

500-575 NA

576-1,200 NA

500-2,418 NA

937 NA

537 NA

806 NA

804 NA

NA = Not applicable. 1/ Estimated annual hours open for business with crew on hand and being paid regardless of whether ginning,

broken down, or waiting for seed cotton. 2^/ Estimated ginning time lost, in hours, because of breakdown in press assembly, including automatic

strapping unit. 3/ $2,418 included replacement of motors, piping, and control switches.

UNIVERSAL DENSITY MD MODIFIED FLAT BALE PRESSES

The recent acceptance of the universal density bale by nearly all segments of the cotton industry has caused many ginners and gin owners to consider making substantial changes in their pressing operations. Those thinking of installing a universal density press in a new gin instead of a new modified flat bale press, or those who must replace an older flat bale press in an existing plant, necessarily consider the additional capital investment and increased operating expenses required. If However, replacement or installation of a universal density press in lieu of a modified flat bale press enables gins to produce a bale which is immediately acceptable, both domesti- cally and abroad, without further compression. This section of the report pro- vides information on comparative installed cost and operating expenses> and on volume-cost relationships, needed by ginners, operators, and owners to make economic decisions regarding their operations.

The economic-engineering approach was used in this study to eliminate or minimize variations in the installed cost and operating expenses of presses» Cost and performance data were obtained from manufacturers, sales representatives, owners, and operators of different presses and through personal observations of a representative sample of gins located throughout the Cotton Belt during the 1973/74 and later ginning seasons. Specifications and cost quotations for new presses of both types represent conditions existing in late 1975. Alth.ough^ investments and operations may vary from those shown because of differences among manufacturers, areas, and other factors, the costs and rates used were considered representative of those confronting a typical gin owner who was considering installation of a new flat or universal density bale press. Moreover, as reported by sample gins, operating expenses varied with location, depreciation rates used, power rates, wages, insurance, taxes, and length of ginning season. Any such differences in operating expenses may or may not be affected by the type of bale press installed. In this report, ownership mid operating expenses of the two t3rpes of presses have been developed and pre- sented in such a manner so as to enable individual gin owners or managers to substitute specific input data and recalculate total and per bale cost on their ginning volumes and operating conditions.

2j Conventional flat bale presses refers to existing presses with boxes lined to a size of 24 by 54 inches. New modified flat bale presses refer to new presses designed and manufactured with a press box that is 24 by 54 inches in size.

24

Machinery Specifications and Costs

Specifications and costs were developed for two sizes of presses in both new modified flat and gin universal densities. The smaller of the two press sizes has an actual baling capacity of up to 15 bales per hour, and the larger presses are rated at 16 to 24 bales per hour. J;/ Model specifications assume manual strapping in both sizes of modified flat bale presses, a single automatic strapping head on the smaller universal density press, and two automatic strapping heads on the larger universal density press. _4/ Although the basic equipment remains the same, additional or faster plumping units are required for gins processing rates of 16 or more bales per hour. Because of recent developments in packaging materials and equipment, it was further assumed that universal density bales would be strapped "naked" and placed into burlap bags. Flat bales were assumed to be wrapped in jute bagging and ties with conventional strapping material.

Cost quotations used in this report are for complete, new, ready-to-use press installations at late in 1975 f.o.b. factory prices plus average shipping and installation costs. Investment costs for universal density press installations also include costs for all necessary automatic strapping equipment, a conveyor bale packaging system to place "naked" strapped bales into burlap bags, a bale scale, and a conveyor to the gin platform.

The cost of new universal density bale press installations capable of capacities of as much as 15 bales per hour was $225,000. The cost for those capable of maintaining rates of from 16 to 24 bales per hour was $265,000 (table 16). 5j

Investment in new modified flat bale presses with boxes that are 24 by 54 inches in size was estimated at $85,000 for presses with capacities as much as 15 bales per hour and $95,000 for those with capacities of from 16 to 24 bales per hour. These costs include all cost of installation, such as labor, wiring, and freight.

_3/ Because few gins today have capacities of more than 24 bales per hour, this was the maximum processing rate considered in this analysis.

kj It is recognized that automatic strapping is adaptable for use on flat bales. However, strapping materials cannot be reused and must be replaced if the bale is later recompressed to a higher density, thereby adding to the total cost.

5j These estimates assume no major modification of, or additions to, existing buildings or other equipment. Any necessary or unusual modifications to either the gin building or equipment would add to these estimates.

25

Table 15 --Average annual voltrme, net bale weight, crew size, processing rate, and hours of operation, by area and by designated volume intervals of each type of press, 1973/74 season

Area, press^ and

volume intervals

:Distribution : by : volume

California-Arizona: Modified flat press with a bale volume of—

Less than 5,000 5,000-9,999 10,000-14,999. • 15,000 or more ••

Total or average Universal density press with bale volume ofr

Less than 5,000 5,000-9,999 ... 10,000-14,999 15,000 or more

Total or average

Wes t Texas : Modified flat press with a bale volume of—

Less than 5,000 5,000-9.999 10,000-14,999 15,000 or more- •

Total or average Universal density press with bale volume of-

Less than 5,000 5,000-9,999 10,000-14,999 15,000 or more,...*

Total or average.* *

Average volume

Average net

weight

Crew size

Press 1/ : Total

Processing rate per hour 2/

Operating hours 3/ .

Percent Bales Pounds Number - -. Bales Hours

12 2,792 511 2 5 10 4/ NA 75 7,062 490 4 10 10 1,181 13

0 100

13,931 492 3 8 13 2,006

7,387 493 3 9 11 1,299

0 57 8,073 476 3 9 13 1,135 29 13,290 492 4 10 21 1,340 14 23,180 495 4 12 18 1,645

100 11,721 483 4 10 16 1,266

0 -,*- -*- —-» «— 50 7,478 492 4 8 9 1,610 50

0 100

11,175 499 3 7 9 2,880

9,326 495 4 7 9 2,245

0 ^— —- ^.-. —- -.— 25

0 75

8,321 509 4 7 12 1,664

29,551 501 4 13 16 2,239 100 24,244 503 4 11 15 2,096

Continued—

Table 15 —Average annual volume, net bale weight, crew size, processing rate, and hours of operation, by area and by designated volume intervals of each type of press, 1973/74 season —Continued

Area, press^ and

volume intervals

Distribution by

volume

Average volume

Average net

weight

Crew size

Press 1/: Total

Processing : Operating rate : hours

per hour 2/ : 3/

Louisiana-Mississippi Delta: : Modified flat press with a bale volume of— :

Less than 5,000 : 5,000-9,999 : 10,000-14,999 : 15,000 or more :

Total or average : Universal density press with a volume of— :

Less than 5,000 .....•.••••: 5,000-9,999 .... . : 10,000-14,999 : 15,000 or more ........:

Total or average :

Areas combined: : Modified flat press with a bale volume of— :

Less than 5,000 ...,.: 5,000-9,999 : 10,000-14,995 : 15,000 or more :

Total or average • : Universal density press with a bale volume of:

Less than 5,000 : 5,000-9,999 : 10,000-14,999 : 15,000 or more :

Total or average. :

Percent Bales Pounds

25 0

75 0

100

4,874 506

11,739 496

10,023 499

14 4,388 480 57 7,556 496 29

0 100

14,060 484

8,962 490

Number

4

5

4

6 4 4

9

11

10

13 10 14

11

Bales

15

17

17

12 20 16

18

Hours

670

999

917

1,080 974

1,352

1,097

12 3,833 508 3 7 13 670 50 7,162 491 4 9 10 1,229 38

0 100

11,916 496 4 9 14 1,794

8,531 495 4 9 12 1,449

6 4,388 480 6 13 12 1,080 50 7,871 488 4 9 16 1,122 22 13,675 488 4 12 18 1,346 22 27,958 500 4 12 16 2,091

100 13,431 490 4 11 16 1,385

Note: Figures may not add to totals because of rounding. Dashes mean that no obseirvations were made for that entry. \J Excluded proportion of press crew members time spent tending mechanical samples, hauling bales to bale yard, moving trailers,

and other nonpress related responsibilities. Ij Average ginning and baling rate per hour during observation period. _3/ Estimated annual hours open for business with crew on hand and being paid, regardless of whether ginning, broken down, or waiting for seed cotton. 4/ Data not available.

Table 16 —Installed costs of universal density and new modified flat bale presses, by processing capacity, 1975

; Cost for a press with a capacity of—

Items îl5 bales or less per : hour :

: 16 to 24 bales per ; hour

! Universals ! density ' : 1/ :

Modified 1 flat

2/ !

! Universal: Modified : density : flat : 1/ : 2/

Dollars

Press, complete including freight* : 130,000 65,000 160,000 72,000

Automatic strapping equipment 3^/ : 34,000 42,000

Installation: labor & materialA/ ! 42,000 20,000 44,000 23,000

Conveyor bale packaging system 5^/ : 19,000 19,000

Total installed cost : 225,000 85,000 265,000 95,000

1/ These were current investment costs late in 1975. 2^/ Late 1975 cost quotations for a new modified flat bale press with a 24-

by 54-inch press box. 3/ Assumes 1 strapping head for 15 bales or less per hour and 2 strapping

heads for 16 to 24 bales per hour with universal density presses; also includes allowance for a spare head, test stand, and recommended parts inventory. Manual strapping assumed for modified flat bale presses.

4^/ Assumes no major modifications of, or additions to, the existing gin building. V Includes conveyor packing system to place "naked" strapped bale into

burlap bag, bale scale, and conveyor to outside.

28

Operating Expenses

Operating expenses are classified generally as fixed, variable, and bagging and tie costs• Fixed costs are primarily determined by the installed cost of the bale press, and variable expenses are somewhat related to the number of bales pressed. It was recognized that the cost of bagging and ties is more nearly a cost of packaging than an expense of pressing a bale of cotton. How- ever, the cost of bagging and ties is included along with the fixed and variable operating expenses, since bales must be covered and tied before entering the marketing channels.

Bale press expenses, as used in this report, do not include any portion of management or other overhead expenses of operating a gin plant. Similarly, no allowance is made for any maintenance or depreciation expenses on that part of the gin building in which the bale press is housed. Total operating expenses of bale presses, as used in this study, therefore, do not reflect a cost accounting viewpoint of a bale press as a functional department of a cotton gin.

Fixed expenses.—Fixed expenses are those associated with permanent facilities and equipment. Fixed expenses do not vary as the amount of output of the production process changes, and they are incurred even when production is not undertaken. For this reason, fixed expenses per bale vary inversely with volumes. Once a bale press, or any other unit of gin machinery, has been installed, the only possibility of reducing annual fixed expenses per bale is to process more cotton per season. Depreciation, taxes, insurance, and interest on capital investment are included in fixed expenses.

Depreciation.—The 1975 installation cost of model bale presses of each type was used in computing depreciation expenses. The straight-line method assuming salvage value equal to removal cost, was used to calculate depreciation expenses for presses. This resulted in an economic life of about 14 years and an annual depreciation rate of about 7 percent. The computed amounts of annual depreciation expense were $15,750 for universal density presses and $5,950 for new modified flat bale presses with capacities of as much as 15 bales per hour. They were $18,550 for the universal density and $6,650 for the new modified flat presses in the 16- to 24-bale-per-hour models (table 17).

Insurance and taxes.—Here insurance expenses are for fire and extended coverage insurance, and comprehensive liability insurance to the press alone. Annual insurance cost in this study was computed at half of 1 percent of the total investment in both press types. This resulted in annual cost of $1,125 for the universal density presses and $425 for the new modified flat bale presses in the lower capacity models. The cost was $1,325 for the universal density presses and $475 for the new modified flat bale presses in the 16- to 24-bale-per-hour models.

Property taxes for model presses were computed at 2 percent of the total installed cost and resulted in annual tax expenses of $4,500 for the smaller universal density presses and $5,300 for the larger presses. Comparable

29

Table 17~Annual fiiced costs for universal density and new modified flat bale presses^ by proeessing capacity, 1975

Cost for a press with a capacity of—

Item ; 15 bales or less

; per hour : : 16 to 24 bales

per hour Universal : Modified ; density : flat ;

universal : Modified density : flat

Denreciation 1/............. !

: Dollars

: 15,750 5,950 18,550 6,650

Insurance 2/.••••••••••••.••• : 1,125 425 1,325 475

Taxes 3/ • ; : 4,500 1,700 5,300 1,900

Interest on investment ^/....

Total •••••.••...

: 9,000 3,400 10,600 3,800

! '^n.'^7^ 11-47=; -^S-TTS 17_R9S W-r , * » — —— y w_^

1,/ Calculated at 7 percent of total investment, assumed straight-line method.

2j Calculated at one-half of 1 percent of total investment. 3j Calculated at 2 percent of total investment. y Calculated at 8 percent on one-half of total investment.

30

expenses for new modified flat bale presses were $1,700 for smaller sizes and $1,900 for the larger ones.

Interest on investment.—Although operating statements of cotton gins seldom include interest on investment as an expense, it was considered such in this study, since money used to purchase a piece of equipment could not be used for other purposes. Interest expense was determined by making an annual interest charge on the average investment over the life of the press. The average investment is equal to half of the installed cost. Interest expense on borrowed capital, or the opportunity expense of nonborrowed capital, was set at 8 percent. This resulted in annual expenses of $9,000 for the smaller universal density models and $10,600 for the 16- to 24-bale-per-hour models. Annual interest cost for the new modified flat bale presses was $3,400 for the smaller models and $3,800 for the larger ones.

Total fixed expenses.—Total annual fixed costs for the smaller models amounted to $30,375 for the universal density presses and $11,475 for the new modified flat bale presses. For the larger sizes, the costs were $35,775 for the universal density presses and $12,825 for the new modified flat presses. In all models, depreciation made up 52 percent of total fixed costs; interest on investment, 29 percent; taxes, 15 percent; and insurance, 4 percent. Com- bined, these annual expenses made up 13.5 percent of the total investment in each of the press models.

Variable expenses.—Variable expenses of pressing bales include labor, power, repairs, and supplies. The annual totals for each of these expense items increase with the number of bales pressed, but they increase at diminish- ing rates. This results in variable expenses per bale tending to decline with increasing volimies pressed, but they decline at a less pronounced rate than fixed expenses. Variable input requirements depend primarily on the annual hours of operation and the normal ginning rate in bales per hour. Thirty different combinations were developed to illustrate the effect on variable expenses of changes in hourly processing rates and total hours of seasonal operation. Processing rates chosen were 8, 12, 16, 20, and 24 bales per hour. Seasonal hours of operation were set at 500, 750, 1,000, 1,500, 2,000 and 2,500. Variations in seasonal hours of operation were based on sample plant data and are considered typical of many gin operations throughout the Cotton Belt. Moreover, seasonal operations vary considerably from gin to gin and from year to year, depending on crop size and the number of gins in an area. In low-volume years, many gins actually operate 500 hours or less, but with a large crop, 1,000 to 1,500 operating hours are common with normal trailer seed cotton storage. Also, more extensive use of modular, rick, basket, or other forms of seed cotton storage could easily extend the ginning season to 2,500 hours or more at some gins.

Labor.—Crew requirements at a given press depend mainly on the ginning rate, the degree of automation o£ the pressing operation and the use or nonuse of mechanical samplers. §_/ Average press crew requirements were based on

§J The use of mechanical sampler may require additional labor, ranging from part-time work for one of the press crew at a gin with a lower processing rate to an additional full-time employee at a gin with a higher rate.

31

observations (1) at gins equipped with universal density presses, automatic strapping on naked bales, and a conveyor sacking system, (2) at conventional gina xiith, modified flat bale presses, manual strapping, and manual jute bagging. These observations are shown in table 18 and exclude mechanical sampler operators and bale yard haulers.

Table 18 —Average press crew requirements

Ginning and

baling rate per hour

Press crew size Universal

density press Modified flat press

Number of employees

8 bales : 1.5 12 bales : 2 16 bales : 2.5 20 bales ; 3 24 bales " 3

3 4 4.5 5 5

Although hourly wage rates and fringe benefits vary from gin to gin and from one geographic area to another, total press labor expense is dependent on five principal factors. They are (1) number of employees in the press crew, (2) average hourly wage rate including fringe benefits, (3) average ginning and baling rate per hour, (4) operating hours per season, and (5) total hours for which the crew is paid but not actually baling cotton.

Wage rates used in this report included allowance for overtime pay, social security taxes, workman's compensation insurance, and other fringe expenses, were $3.90 per hour for the head pressman and $3.40 for the other members of the press crew. Using these rates, the hourly cost equation for the press crew is:

[(crew size -1) X (hourly rate for press crew)] + (hourly rate for head pressman) ]

Substituting the above rates, the equation then becomes:

I(crew size - 1) X $3.40 + $3.90]

Gin managers have indicated that they can maintain their average rates of production approximately 11 hours out of each 12-hour labor shift, resulting in paid crew hours equal to about 110 percent of actual processing hours when seed cotton is available. However, considerable ginning time is lost

32

throughout the season (for which the crew is paid) because of harvesting delays, waiting for seed cotton, choke-ups, breakdowns, delays in changing trailers under the suction and so forth. To allow for paid nonproduction time, a total of 250 crew hours was assumed for each processing rate and length of season. Accordingly, total press crew hours paid per season is equal to total operating hours multiplied by 110 percent plus 250 hours paid nonproductive time.

The equation for total seasonal labor expense for the press crew becomes:

[(crew size - 1) X (hourly rate for press crew) + (hourly rate for head pressman)] X [(total season operating hours X 1.1) + (total nonproduction hours for which crew is paid)]

Substituting into the equation the numerical values for a 24-bale-per- h.our universal density press operating 1,000 hours, total seasonal labor is:

[[(3 - 1) X $3.40] + $3.90] X [(1,000 X 1.1) + 250 hours] = ($6^80 + $3.90) X 1,350 hours = $14,445]

Using this equation and substituting the proper numerical values for a modified flat bale press results in a total seasonal labor expense of $23,625,'or $9,180 more than total expenses for a comparable universal density bale press. Table 19 develops total seasonal labor expenses for several ginning rates and seasonal hours of ginning. Using the above equation, an individual gin owner or manager may substitute specific input data and recalculate total pressing expenses for labor on his own ginning voltimes, wage rates, and operating conditions.

Power.—Power requirements are based on reading of kilowatt-hours on meters connected individually to press pumps and tramper motors at several representative types of universal density and modified flat bale press installations in the Midsouth during the 1973/74 and 1974/75 seasons. The electricity used per bale was 3 kilowatt-hours for universal density presses and 0.54 on modified flat bale presses. Cost per kilowatt-hour of electricity used was based on an analysis of electrical energy charges obtained from several of the studied gins and with the cooperation of agents of power companies servicing gins. An average rate of 3.75 cents per kilowatt-hour was used and resulted in average cost of 11 cents per bale at universal density presses and 2 cents at modified flat presses. 7/

' Ij Per bale kilowatt-hours requirements and cost for each press type was assumed to be constant over the volume ranges considered. However, there might be a slight decrease in both kilowatt-hours requirements per bale and cost per kilowatt-hours as volume increases.

33

Table 19 —Labor cost per season for operating gin presses, by processing rates, type of press, and hours of operation, 1975 1^/

4>-

Seasonal operation Cost of labor needed to operate a gin. by the processing rate per hour and by typé press Tj

Actual • Crew : paid 4/

8 bales : 12 bales : 16 bales 20 bales : 24 bales

ginning _3/ UD ; MF ; UD ; MF ; UD ; MF ; UD • MF • • • UD ' • MF

Hours Dollars

500 800 4,480 8,560 5,840 11,280 7,200 12,640 8,560 14,000 8,560 14,000

750 1,075 6,020 11,052 7,848 15,158 9,675 16,985 11,502 18,812 11,502 18,812

1,000 1,350 7,560 14,445 9,855 19,035 12,150 21,330 14,445 23,625 14,445 23,625

1,500 1,900 ► 10,640 20,330 13,870 26,790 17,100 30,020 20,330 33,250 20,330 33,250

2,000 2,450 . 13,720 26,215 17,885 34,545 22,050 38,710 26,215 42,875 26,215 42,875

2,500 3,000 , 16,800 32,100 21,900 42,300 27,000 47,400 32,100 52,500 32,100 52,500

1^/ Hourly wage rate, including fringe benefits, based on $3-90 for head pressman and $3,40 for other members of press crew. Ij Press types: UD = universal density press, and MF = modified flat press. _3/ Hours of operation at specified processing rates. kj Actual ginning hours, times 110 percent, plus 250 hours*

Repairs and supplies,—Repair and supplies expenses include those expenses associated with worn and broken parts, routine oiling and greasing, and keeping the machinery in good working order. Expenses for repairs to presses was partly estimated from limited information obtained from consultation with the managers and owners. For purposes of this report, annual expenses for repairs and supplies were estimated at $500 plus $0.05 per bale for universal density presses and $250 plus $0.03 per bale for new modified flat bale presses.

Total variable expenses per bale.—Average variable expenses per bale for universal density press models ranged from $1.41 per bale for the 8-bale- per-hour gin plant processing 4,000 bales a season to $0.71 for the 24-bale- per-hour gin plant processing 60,000 bales (table 20). Comparable expenses for new modified flat bale models were $2.25 for smaller presses and $0.93 for larger ones. Expenses for labor accounted for approximately 80 percent of total variable expenses for universal density presses and 95 percent for new modified flat bale presses. Average variable expenses per bale for universal density presses were lower than for corresponding new modified flat bale expenses. But these differences become less marked in all instances as ginning volumes increased.

Total fixed expenses per bale.—Average fixed expense per bale for both types of presses decreased as voltimes ginned increased (table 20). Fixed expenses per bale for universal density presses ranged from $7.59 per bale at the 8-bale-per-hour model operating 500 hours per season (4,000 bales) to $0.60 at the 24-bale-per-hour model operating 2,500 hours (60,000 bales). Comparable expenses for new modified flat bale presses were $2.87 and $0.21 per bale, respectively. Differences in fixed cost between t3rpes of presses decreased from $4.72 per bale more for universal density presses in the 8-bale-per-hour models to only $0.39 more in the 24-bale-per-hour model.

Fixed and variable expenses.—Total expenses excluding bagging and ties ranged from $9 per bale for the universal density model in an 8-bale-per-hour gin operating 500 hours per season to $1.14 for the new modified flat bale model in a 24-bale-per-hour gin operating 2,500 hours. As a result of con- sistently lower total variable expenses per bale in the universal density models, differences in total operating costs between the two types of presses were reduced slightly as size of gin and operating hours increased.

Bagging and tie expenses.—Since the acceptance of net weight trading, a variety of material has been used to package universal density bales. Sheet plastic, plastic shrink film, and other types of plastic have been used at some gins. Plastic film, although usually cheaper than conventional wrapping, has reportedly been a problem for some warehousemen. Moreover, complaints have been registered at some export points regarding the diffi- culty in handling plastic wrapped bales with lift trucks and inside the cargo ship.

Recently developed burlap bags gained widespread acceptance as a wrapping material for universal density bales during 1975, mainly because they eliminate major problems associated with handling plastic covered bales.

35

Table 20 —Total seasonal volumes and operating costs per bale for gin presses, by processing rates, type of press and hours of operation, 1975

Items and hours of

seasonal operation

Seasonal volume and cost per bale for a gin, by the processing rate per hour and by type of press 1/

8 bales : 12 bales 16 bales : 20 bales : 24 bales

UD '. MF ! UD ' MF • • '. UD ; MF ; UD ; MF ]■ UD ] MF

Bales

00

500 hours of operation.

750 hours of operation.

4,000

Fixed costs : 7.59 Variable costs for— :

Labor : 1.12 Power : .11 Repairs • : .18

Total variable costs.: 1.41 Total : 9.00

Bagging and ties : 3.75 Total : 12.75

6,000

Fixed cos ts : 5.06 Variable costs for— :

Labor : 1.00 Power : .11 Repairs : .13

Total variable costs.: 1.24 Total : 6.30

Bagging and ties : 3. 75 Total : 10.05

6,000 8,000

Dollars

10,000 12, 000

2.87 5.06 1.91 4.47 1.60 3.58 1.28 2.98 1.07

2.14 .97 1.88 .90 1.58 .86 1.40 .71 1.17 .02 .11 .02 .11 .02 .11 .02 .11 .02 .09 .13 .07 .11 .06 .10 .06 .09 .05

2.25 1.21 1.97 1.12 1.66 1.07 1.48 .91 1.24 5.12 6.27 3.88 5.59 3.26 4.65 2.76 3.89 2.31 4.75 3.75 4.75 3.75 4.75 3.75 4.75 3.75 4.75 9.87 10.02 8.63 9.34

Bales 8.01 8.40 7.51 7.64 7.06

9,000 12,000

Dollars

15,000 18, 000

1.91 3.38 1.28 2.98 1.07 2.38 .85 1.99 .71

1.92 .87 1.68 .81 1.42 .77 1.25 .64 1.05 .02 .11 .02 .11 .02 .11 .02 .11 .02 .07 .11 .06 .09 .05 .08 .05 .08 .04

2.01 1.09 1.76 1.01 1.49 .96 1.32 .83 1.11 3.92 4.47 3.04 3.99 2.56 3.34 2.17 2.82 1.82 4.75 3.75 4.75 3.75 4-75 3.75 4.75 3.75 4.75 8.67 8.22 7.79 7.74 7.31 7.09 6.92 6.57 6.57

Continued -

Table 20 —Total seasonal volumes and operating costs per bale for gin presses, by processing rates, type of press and hours of operation, 1975—Continued

: Seasonal volume and cost per bale for a gin, by the processing rate per Items and hours hour and by type of press 1 /

of 8 bales : 12 bales : 16 bales : 20 bales 24 bales seasonal operation

UD ; MF ; UD ; MF ; UD ; MF > • • > ■

UD ; MF •

UD ; MF

1,000 hours of operation : 8,000


Labor •.: .94 Power : .11 Repairs : .11 Total variable costs.: 1.16

Total : 4.96 Bagging and ties : 3.75

Total : 8.71

Bales

1,500 hours of operation 12,000


Labor : .89 Power : .11 Repairs : .09

Total variable costs : 1.09 Total : 3.62


12 ,000 16 ,000 20 ,000 24 ,000

Dollars 1.43 2.53 .96 2.24 .80 1.79 .64 1.49 .53

1.81 .82 1.59 .76 1.33 .72 1.18 .60 .98 .02 .11 .02 .11 .02 .11 .02 .11 .02 .06 .09 .05 .08 .05 .08 .04 .07 .04

1.89 1.02 1.66 .95 1.40 .91 1.24 .78 1.04 3.32 3.55 2.62 3.19 2.20 2.70 1.88 2.27 1.57 4.75 3.75 4.75 3.75 4.75 3.75 4.75 3.75 4.75 8.07 7.30 7.37 6.94 6.95 6-45 6.63 6.02 6.32

Bales 18, ,000 24, ,000 30 ,000 36 ,000

Dollars .96 1.69 ,64 1.49 .53 1.19 .43 .99 .36

1.69 .77 1.49 .71 1.25 .68 1.11 .56 .92 .02 .11 .02 .11 .02 .11 .02 .11 .02 .05 .08 .04 .07 .04 .07 .04 .06 .04

1.76 .96 1.55 .89 1.31 .86 1.17 .73 .98 2.72 2.65 2.19 2.38 1.84 2.05 1.60 1.72 1.34 4.75 3.75 4.75 3.75 4.75 3.75 4.75 3.75 4.75 7.47 6.40 6.94 6.13 6.59 5.80 6.35 5.47 6.09

Continued

Table 20 —Total seasonal volumes and operating costs per bale for gin presses, by processing rates, type of press and hours of operation, 1975—Continued

Items and hours Seasonal volume and cost per bale for a gin, by the processing rate per

hour and by type of press 1/ of 8 bales : 12 bales : 16 bales : 20 bales : 24 bales

seasonal operation UD • MF • UD * MF " UD " MF * UD ' MF ' UD ' MF • •••••••• • •••*••••

00

2,000 hours of operation. 16,000 Bales

Fixed cos ts : 1.90 Variable costs for— :

Labor. .••• : .86 Power : .11 Repairs : .08

Total variable costs : 1.05


2,500 hours of operation..: 20,000


Labor : .84 Power : .11 Repairs : ,07

Total variable costs..: 1.02 Total : 2.54

Bagging and ties : 3. 75 Total.. : 6.29

24 ,000 32 ,000 40,000 48, 000

Dollars .71 1.27 .48 1.12 .40 .89 .32 .75 .27

1.64 .75 1.44 .69 1.21 .66 1.07 .55 .89 .02 .11 .02 .11 .02 .11 .02 .11 .02 .05 .07 .04 .07 .04 .06 .04 .06 .04

1.71 .93 1.50 .87 1.27 .83 1.13 .72 .95 2.42 2.20 1.98 1.99 1.67 1.72 1.45 1.47 1.22 4.75 3.75 4.75 3.75 4.75 3.75 4.75 3.75 4.75 7.17 5.95 6.73 5.74 6.42 5.47 6.20 5.22 5.97

Bales 30, 000 40, 000 50,000 60, 000

Dollars .57 1.01 .38 .89 .32 .72 .26 .60 .21

1.60 .73 1.41 .68 1.18 .64 1.05 .54 .88 .02 .11 .02 .11 .02 .11 .02 .11 .02 .04 .07 .04 .06 .04 .06 .04 .06 .03

1.66 .91 1.47 .85 1.24 .81 1.11 .71 .93 2.23 1.92 1.85 1.74 1.56 1.53 1.37 1.31 1.14 4.75 3.75 4.75 3.75 4.75 3.75 4.75 3.75 4.75 6.98 5.67 6.60 5.49 6.31 5.28 6.12 5.06 5.89

1/ Press types: UD = universal density press and MF - modified flat press.

The bags allow for strapping naked bales, eliminate the need for dressing the press, and completely cover the bales. However, modified flat bales are still generally covered in jute bagging.

The cost of bagging used in the analysis was based on the use of burlap bags for universal density bales and jute for modified flat bales. Bagging and tie cost per bale were held constant for all hours of operation and volumes processed. Bagging and tie costs used were $3.75 per bale for universal density bales and $4.75 for modified flat bales. Materials used on universal density bales weighed about 8 pounds, compared with 21 pounds for modified flat bales. These materials provide some possible savings in transpor- tation costs and favored the universal density bales.

Total expenses, including bagging and ties.—The use of lower cost bagging material and less labor at universal density presses tended to offset the higher fixed and variable expenses of these presses. The differences were not great enough to completely offset the lower fixed expenses of the new modified flat bale presses, except at higher capacity rates and with longer hours of operation. For example, with 1,000 hours of annual operation at an 8-bale-per-hour rate, expenses for the universal density pressing were $0.64 per bale more than for the new modified flat bale pressing. However, at an increased rate of 24 bales per hour, total expenses were $0.30 per bale less when pressing universal density bales. The total cost equation for either type press can be stated as follows:

[TC = Pct(IßP + P(Vol) + Rv(Vol) + Rf + [(Opt) (Ph) + Nh] X [(Cg^ - l)Wr + Wrh] + Bt(Vol)]

Where:

TC = Total annual dollar cost. Pet = Combined percentage rate for calculating annual fixed cost. I = Investment requirement for press by actual average processing rate. Br = Actual average seasonal processing rate in bales per hour. P = Power cost per bale. Vol = Annual volume ginned, or Opt multiplied by Br. Opt = Annual operating hours at actual rate. Rv - Variable repair and supplies cost per bale. Rf " Fixed annual repair and supply cost. C = Press crew size for specified processing rate. Wr = Hourly wage rate of press hands. Wrh = Hourly wage rate of head pressman. Ph = Percentage of hours for which the press crew is paid, compared to

operating hours at Br when seed cotton is available. Nh = Annual number of hours press crew is on duty and paid, but not

processing cotton because seed cotton is not available, breakdown, and so forth.

Bt = Bagging and tie costs per bale.

39

Using the above equation and the appropriate values, gin managers or owners may compute total pressing expenses which more accurately reflect their individual operations. The following examples show practical applications of the equations by using volume and expense values developed in this report.

Example 1.—Modified flat bale press operating for 925 hours at a rate of 12 bales per hour

TC = 0.135(85,000) + 0.02(925)12 + [0.03(925)12 + 250] + [(925)1.1 + 250] X [(4-1)(3.40) + 3.90] + 4.75(925)12

TG = $11,475 + $222 + $583 4- $17,871.75 + $52,725

TC = $82,876.75

TC per bale = $82,876.75 - 11,100 = $7.47

Example 2.—Universal density press operating for 875 hours at a rate of 20 bales per hour

TC = 0.135(265,000) + 0.11(875)20 + [0.05(875)20 + 500] + [(875)1.1 + 250] X [(3 - 1)(3.40) + 3.90] + 3.75(875)20

TC = $35,775 + $1,925 + $1,375 + $12,973.75 + $65,625

TC = $117,673.75

TC per bale = $117,673.75 ^ 17,500 = $6.72

By substituting actual gin values on volume, crew size, power cost, and other necessary data, any gin owner or manager can readily ascertain his own pressing expenses as well as expenses per bale.

Compression Revenue

Historically, gin-run bales (except in the Southeast) have been repress- ed to higher densities in compress warehouses mainly to conserve storage space and to reduce the cost of transporting bales to mills or export points. Charges by compresses for compressing gin-run bales are not incurred for gin universal density bales. However, compresses generally levy a special maintenance fee or handling charge against bales for which they receive no compression revenue. Rebates are then made to the gin for compression services performed. These rebates vary among geographic areas, but $3 per bale was commonly quoted during the 1975/76 season. Before reaching a final decision on which type of press to install, a gin owner would need to consider the added revenues to be derived from installing a universal density press.

40

Determing the Type of Press to Install

In deciding which press to install, a point of indifference occurs. This is the point at which the total cost is the same for pressing a given volijme of cotton when using either type of press. The indifference point, or breakeven volume, for any gin can be easily determined by using the following equation:

Pctdud - Imf) 4- (Pud - Pmf) (X) + (Rvud - Rvmf) (X) + (Rfud - Rfmf) + Ph(Cud - Cmf ) (Wr) (X) + Nh(Cud - Cmf)

Br (Wr) + (Btud - Btmf)(X) - Aud(X) = 0

Miere:

ud = Universal density bale press, mf = Modified flat bale press X = Breakeven volume Pet = Combined percentage rate for calculating annual fixed costs, such

as depreciation, taxes, insurance, and interest as a percentage of total investment.

I = Investment requirements for each type of bale press Br = Actual average seasonal processing rate in bales per hour. P = Power cost per bale by press type Rv = Variable repair and supply cost per bale by press type. Rf = Pixed annual repair and supply cost by press type. Ph = Percentage of hours press crew paid compared to operating hours at rate Br when seed cotton is available

C = Press crew size by press type. Wr = Hourly wage rate for press hands Nh = Annual hours press crew is on duty and paid, but not processing cotton because seed cotton is not available, breakdowns, etc.

Bt = Bagging and tie cost per bale by press type. Aud = Per bale allowance, or compress rebate, for universal density bale.

Using values and rates developed in this report, the breakeven volume between the two types of presses for a 16-bale-per-hour gin can be calculated. It is as follows:

[0.135($265,000 - $95,000) + ($0.11 - $0.02)(X) + ($0.05 - $0.03)(X) + ($500 - $250) + 1.1(2.5 - 4.5)($3.40)(X) + 250(2.5 - 4.5)($3.40) +

16 ($3.75 - $4.75)(X) - $3.00(X) = 0]

[$22,950 + $0.09(X) + $0.02(X) + $250 - $0.4675(X) - $1,700 - $1.00(X) - $3.00(X) = 0]

[$21,500 - $4.3575(X) = 0] [X = 4,934 bales (Breakeven volume)]

41

This equation can be used to calculate breakeven volumes tinder different cost conditions by substituting in the appropriate values for a specific situation. For examplej breakeven volumes shown in table 21 were developed by introducing several other rates of laniversal density compression allowance and by holding all other factors constant.

Table 21 —Breakeven volumes at different rates of compression allowances for universal density presses, compared with new modified flat presses, by gin plant size 1/

Universal density compression \ Gin plant that has a per-hour processing rate of—

allowance per bale : 8 bales : 12 bales : 16 bales : 20 bales : 24 bales

Bales

None ' : 11,233 11,531 15,838 17,009 17,891 $1.00 : 6,898 6,943 9,120 9,496 9,765 $1.50 ! : 5,782 5,791 7,524 7,779 7,958 $2.00 : 4,977 4,967 6,404 6,587 6,715 $2.50 4,369 4,348 5,574 5,712 5,808 $3.00 3,893 3,850 4,934 5,042 5,117

1/ Based on the cost relationships and other assumptions used in this study.

Changes in crew'requirements, wage rates, bagging and tie costs, or investment costs can be readily inserted in the equation and a new set of breakeven volimies developed. Another application of the equation is for use in determining the maximum investment in a new gin press which can be justified under a given set of conditions. For example, assume that a gin has a 16-bale-per-hour processing rate, an anticipated annual ginning volume of 15,000 bales, and no change in cost factor relationships. Instead of $265,000, the cost of the universal density press now becomes the unknown of (X). The equation values then become:

[.135(X) - $95,000) + $0.09(15,000) -f $0.02(15,000) + $250 - $0.4675(15,000) - $1,700 - $1.00(15,000) - $3.00(15,000) = 0]

[.135X - $12,825 + $1,350 + $300 + $250 - $7,012 - $1,700 - $15,000 - $45,000 = 0]

[.135X - $53,987 = 0]

[X = $399,904 (maximum investment-breakeven situation)]

42

Replacing an Existing Press

A gin owner who may be considering the installation of a new universal density press in place of an existing modified flat bale press, which could be used for several more years, needs to know the breakeven or indifference volume for his plant. Investments in existing modified flat bale presses vary appreciably from plant to plant. Cost figures used to calculate breakeven volumes for these plants typify those commonly incurred in installing a new flat bale press early in the sixties and modified in 1973. Combined, these costs were $25,000 for a modified flat bale press with a capacity of 15 bales or less per hour, and $30,000 for one with a capacity of 16 to 24 bales per hour. With other cost relationships and assumptions remaining the same, breakeven volumes between the two types of presses for various universal density compression allowances were computed and are shown in table 22.

Table 22 —Breakeven volumes at different rates of compression allowances for universal density presses, compared with existing modified flat presses, by gin plant size 1/

Universal density compression

allowance per bale

Gin plant that has a per-hour processing rate of—

8 bales : 12 bales : 16 bales : 20 bales : 24 bales

None... $1.00.. $1.50.. $2.00.. $2.50.. $3.00..

16,323 10,024 8,403 7,233 6,349 5,657

16,884 10,166 8,479 7,272 6,366 5,636

Bales

22,302 12,842 10,595 9,017 7,848 6,948

23,952 13,372 10,953 9,275 8,043 7,100

25,193 13,751 11,206 9,456 8,179 7,205

\J Based on the cost relationships and other assumptions used in this study, using late 1975 costs for all items except for the investment in the modified flat bale presses, which represent costs early in the sixties.

Based on the current universal density compression allowance ($3.00 per bale), breakeven volimies ranged from 5,657 bales in the 8-bale-per-hour gin to 7,205 bales in the 24-bale-per-hour gin. Substantial increases in breakeven volumes occur as the compression allowance decreases. Breakeven volumes, when replacing an existing modified flat bale press that could be used for several more years with a universal density press, are about 45 percent higher for the 8- and 12-bale-per-hour plants and 41 percent higher for the 16- to 24-bale-per-hour plants than volumes required when erecting a new facility.

43

IMPLICATIONS

The economic-engineering type of model analysis was used in this study to eliminate or minimize variations in the installed cost and operating expenses of bale presses. Based on the current typical universal density compression allowance of $3 per bale and on a $1 per bale cost differential in bagging and ties which favors universal density bales, installing universal density presses rather than modified flat bale presses in newly erected gins appears to be justified. This occurs with projected annual volumes of more than 3,850 bales in the 8- and 12-bale-per-hour gins and of more than 5,000 bales for the 16-, 20-, and 24-bale-per-hour plants. However, any decrease in these differentials results in a significant increase in breakeven levels required. Also, it is questionable if the volume levels that justify going to a universal density press are high enough, especially in the larger gins, to warrant that size of gin.

Replacing an existing modified flat bale press with a universal density press appears to be justified in 16-, 20-, and 24-bale-per-hour gins with projected annual volumes of more than 6,948 bales. These findings further indicate that these volumes are even lower for 8- and 12-bale-per-hour plants. Accordingly, a sizable expansion in the use of universal density presses appears feasible from an economic standpoint. However, the cost of new universal density presses are likely to be higher in the future than those costs on which the findings of this study were based. Cost of bagging and ties, labor, power, and other basic inputs are also rising, and if the relative cost differences between these two types of presses change, this will also have an impact on the breakeven levels.

RELATED REPORTS

(1) Anthony, Stanley, Joseph L. Ghetti, and Durwood E. Hayes, "Physical Characteristics of Typical Gin Bales for 1973/74 and 1974/75 Seasons," Cotton Gin and Oil MiJl Press, Oct. 1975.

(2) Ghetti, Joseph L., and Dale L. Shaw, "Costs and Breakeven Volumes for Universal Density and Modified Flat Bale Presses," U.S. Dept. Agr., Econ. Res. Serv., ERS-644, May 1976.

(3) Shaw, Dale L., Charles A. Wilmot, and Joseph L, Ghetti, "Universal Density vs. Modified Flat Bale Presses—Cost and Breakeven Volumes," Cotton Gin and Oil Mill Press, Aug. 1974.

(4)^^ Wilmot, Charles A., Joseph L. Ghetti, Dale L. Shaw, and Zolon M. Looney, "Comparative Operating Performance Characteristics of Flat and Standard Density Presses," Cotton Gin and Oil Mill Press, May 1974.

44

Documents

COTTON: COMPARISONS OF MODIFIED FLAT AND UNIVERSAL …