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RACK SAMPLE SURVEY

RACK SAMPLE SURVEY. Commissioned by: NCC's Rack Sample Study Committee William E. Bowen Jr., Chairman. Rack Sample Survey Resolution.

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RACK SAMPLE SURVEY

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  1. RACK SAMPLESURVEY Commissioned by: NCC's Rack Sample Study Committee William E. Bowen Jr., Chairman

  2. Rack Sample SurveyResolution 10 h. encourage the National Cotton Council to study the practice of maintaining rack samples and determine if this practice can be altered or eventually eliminated while achieving industry cost reductions and new efficiencies, at the same time recognizing the need for samples to be readily provided;

  3. Rack Sample SurveyScope of Survey • Define Current Warehouse Sample-Handling Practices and Associated Costs • Define How and Why Buyer’s Samples Are Used • Survey NOT Designed to Decide If Buyer’s Samples Should Be Eliminated. THIS WAS NOT A VOTE!

  4. Rack Sample SurveyResponse Rate • Warehouse • 86 Responses • 7,465,244 Bales (41% of 2003 Production) • Merchant • 14 Responses • 5,600,000 Bales (31% of 2003 Production) • Mill • 16 Responses • 5,034,219 Bales (80% of 2003 Mill Consumption)

  5. Warehouse: Handling Methods

  6. Warehouse: Regional Buyer's Samples Requested

  7. Warehouse: Net Cost • Traditional Racking: Costs/Sample Provided ↓ as Number of Samples Requested ↑ • Cut & Pull: Costs/Sample Provided Unchangedas Number of Samples Requested ↑ • Store in Bag: Market Structure/Merchandizing Effects • Store in Bale Head: Very Limited Number of Observations

  8. Warehouse: Net Cost of Buyer’s Samples

  9. Warehouse Summary • Significant Regional Differences in Handling Practices and the Number of Samples Requested. • Costs Vary Significantly by Handling Practice and Region. • Warehouse Segment Net Cost: $10.8 million.

  10. Merchants: Ordered and Provided Buyer's Samples

  11. Merchants: Buyer's Samples Provided to Customers

  12. Merchant Summary • Merchants reported ordering samples on ≈ 1/3 of volume traded. • Most Samples Are Passed to Mills • Their domestic customers are more likely to request samples than their int’l customers.

  13. Mills: Buyer’s Samples Providedand Cut at Mill

  14. Mills: Distribution of Buyer's Samples Ordered

  15. Mills: Samples Reviewed Of Total Bales Consumed in 2003,… • 25% Had Sample Provided • 22% Had Sample Reviewed • 3.2% Had Bale Rejected Due to Sample Review • 0.3% Had Price Adjusted Due to Sample Review

  16. Mills: Samples Reviewed Of the 25% of Total Bales Consumed That Had a Sampled Provided in 2003,… • 90% of the Sample Were Reviewed • 15% of Reviews Resulted in Bale Rejected • 1.4% of Reviews Resulted in Price Adjustment

  17. In Closing….

  18. Ginners Crushers Merchants Warehouses Manufacturers Producers Cooperatives

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