Bale

The measured item sold to the purchaser is a cotton bale. It consists of the cotton lint after ginning. It weighs 500 pounds.

Boll

The white “flower” of the cotton plant that is harvested for cotton.

CCC Loans

Government loans secured by cotton and other commodities.
See IRC § 77.

Classing/Grading

Classing or grading is done at the gin by the USDA. Samples are pulled from each bale and are analyzed for color, micronaire, strength, length and moisture content. The price received for the cotton is determined by its grade.

Cooperatives

Some gins are ginning cooperatives. A co-op gin is a tax exempt entity owned by the farmers. They can only be examined by the exempt organization division. A farming cooperative issues patronage dividends and makes per unit retain allocations.

Defoliants

Sprayed on plants to make the leaves fall off prior to picking. This makes it easier for mechanical picking and diminishes boll staining.

Gin

Place where cotton module is processed into a bale. The gin is a service provider and does not take title to the cotton. Here the seed is removed and is usually sold to the gin for a credit against baling costs.

Growth Regulators

Chemicals applied during blooming season to force plant to switch from vegetative growth to boll maturation.

Harvester

Machine used to mechanically remove bolls from the plant. Also called row pickers, they are designed to harvest multiple rows at a time. The number of rows of harvesting ability is usually an indication of the cost of the machine.

Lint

The part of the cotton plant flower used to make cotton. There are many varieties of cotton plants. The difference is in the quality of the lint. Common lints include Acala and Upland. Finer, more expensive lints include Pima.

Market Gain Payment

Market Gain Payments are associated with CCC Loans. If the adjusted world price of cotton falls below the loan rate, then the farmer needs only to repay that amount. The difference is a market gain.

Module

After cotton is harvested, it is dumped into a Module Builder. This machine compresses the cotton into a large block. After a module is built, the module builder moves on to build more modules. The block, or module, is left in the field until it is delivered to the gin.

Patronage Dividends

A co-op dividend taxable to the farmer issued on Form 1099.

Per Unit Retains

A non-cash allocation made by a co-op, taxable to the farmer.

Seed

Seed is the by-product in cotton production. It is usually sold to the gin for a credit against ginning costs, but it is sometimes sold directly by the farmer to specialized seed companies.