Panel to Study Lightweight Bale Occurrence

NCC Chairman Kenneth Hood and Memphis Cotton Exchange (MCE) President Danny Lyons announced plans for the appointment of a special joint committee to study all aspects of lightweight bale occurrences.

September 9, 2002
Contact: Marjory Walker
(901) 274-9030

MEMPHIS – National Cotton Council (NCC) Chairman Kenneth Hood and Memphis Cotton Exchange (MCE) President Danny Lyons announced plans for the appointment of a special joint committee to study all aspects of lightweight bale occurrences.

Hood, a cotton producer and ginner from Gunnison, MS, said the panel’s appointment was prompted by industry concerns over earlier MCE actions to increase penalties for lightweight bales. Following industry discussions, MCE’s board agreed to the establishment of a joint committee and the suspension of its new penalties until the completion of the committee’s work, which will be reported to appropriate NCC committees and the Board of Directors during NCC’s 2003 annual meeting Feb. 7-10.

Lyons, a Memphis cotton merchant, said MCE’s agreement to put its new penalties on hold is a temporary stay of action pending completion of the committee’s work and review of any committee recommendations that might be offered.

"While our Board continues to feel strongly that lightweight bales are a source of inefficiency in the cotton marketing/distribution system, we are willing to deal with the matter through the establishment of a joint NCC/MCE committee," Lyons said. "It is MCE’s hope that an objective review will lead to a consensus recommendation that will be acceptable to all industry segments. During this temporary stay of action, the industry will be bound by MCE’s previous Rule 19 weight penalties."

MCE’s board met with cotton industry representatives on Aug. 27 to discuss the amendments, which (1) raised the average bale weight for determining when penalties would be imposed from 485 pounds to 490 pounds; (2) increased the threshold levels for determining the penalty to be imposed; (3) specified stiffer penalties on each weight range; and (4) made the rule applicable to all cotton invoiced after July 31, 2002.

Current NCC policy on lightweight bales calls for "all industry trade associations and exchanges to waive all lightweight bale penalties for any invoice or draft where the average bale weight is 485 pounds or greater."

Hood thanked MCE’s Board for temporarily suspending the new rule and for agreeing to address the issue through the NCC forum.

"We believe the positive actions taken by the Memphis Cotton Exchange and the work of the joint committee will allow the industry to establish an effective and unified approach to dealing with the lightweight bale issue," he said.