We study contributions from color-octet quarkonium formation mechanism
s to p(perpendicular to)-integrated psi' production cross sections in
pion-nucleon reactions. The observed polarization of the psi' is not r
eproduced by calculations where leading-order, leading-twist <Q(Q)over
bar> production mechanisms are combined with the color-singlet and co
lor-octet mechanisms of bound state formation. This shows that there a
re other important quarkonium production mechanisms at low p(perpendic
ular to).