Full capacity cotton offers marketing challenges

The last three years have been busy ones for The Oklahoma Cotton Cooperative Compress Association, headquartered at Altus, Okla.

“Our Altus facility was built in 1963,” says the association’s manager, Jay Cowart, “This warehouse is a division of the Plains Cotton Cooperative Association at Lubbock, Texas.

The two associations joined together to improve cotton storage and marketing.

The last addition at the Altus site was built in 1980, Cowart said. And the most cotton stored at the Altus warehouse was 383,000 bales in 1982. In the 1990s, cotton production declined seriously mainly due to the boll weevil. Today, a country-wide weevil eradication program has made cotton profitable once more.

As weevil numbers declined, production increased steadily and the warehouse walls bulged with bumper crops.

“Three years ago, we stored 379,000 bales at the Altus site,” Cowart said.

“In 2004, we received 510,000 bales. For the 2005 crop year, we handled 656,000 bales. These three successive bumper crops have given us some unusual problems.”

Cowart says new cotton production in northern Oklahoma and Kansas encouraged the association to build a new warehouse at Liberal, Kan., in 2004. That was not enough as more cotton in that area resulted in more warehouse construction, he said.

To take care of the cotton produced in western Oklahoma and north Texas, the association leased another facility at Memphis, Texas. And to handle the sheer volume of cotton received during the cotton harvest, they rented temporary sites at Frederick, Texas.

So, if one site, the one at Altus, has a capacity of only 350,000 bales, how did they handle the 415,000 bales they received last winter?

“This is where the dynamics of the trade comes in,” Cowart said. “All three sites — Altus, Memphis and Liberal — shipped cotton at full capacity from January into June.”

U. S. cotton is sold overseas at a fast pace, Cowart said. Cotton that arrives at storage warehouses from gins quickly moves onto trucks heading west to seaports.

“Cotton milling in this country has fallen from around 11 million bales a year to about 6 million bales,” he said. “The majority of the cotton we receive in our three warehouses goes from West Coast harbors to East Asia. Almost all the cotton we sell today goes to mills in China.”

With the 2006 wheat crop suffering from major drought conditions, area farmers expect to plant even more cotton in 2006. Consequently, Cowart expects 2006-07 will be even “more dynamic than 2005-06.”

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