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Adding Value One Million Bales at a Time

By Blair McCowen

Since 1963, PCCA has been adding value to its grower-owners’ bottom lines through cotton warehousing services. What first began as two locations in Altus, Oklahoma, and Sweetwater, Texas, grew into a total of five with the addition of the Liberal, Kansas, location in 2004, and Rule and Big Spring, Texas, locations in 2008.

With a total storage capacity of 1.5 million bales and growing, PCCA is able to store, sort and ship its farmers’ cotton quickly and efficiently. Overseeing the division is Vice President of Warehouse Operations Jay Cowart, as well as the PCCA Warehouse Committee, chaired by Gary Feist, Southern Kansas Cotton Growers Gin Manager.

“I think our position in the supply chain is critical in that when the market demands heavy shipments we are able to accomplish that,” Cowart said. “We don’t want to be a bottle neck in this process, we want to make sure that we get cotton to the market rapidly, and hopefully add value that way.”

The comradery between the PCCA Warehouse Division staff and the Warehouse Committee is essential to the success of this complex component of the cooperative. In the same way the Pool Committee provides guidance for cotton marketing, the Warehouse Committee helps ensure value is added to each bale that passes through the doors of a PCCA warehouse.

“Our staff works with the Warehouse Committee to ensure the Warehouse Division has the resources necessary to receive, store, and ship each crop,” Cowart said. “They regularly review warehouse capacities to determine if any additional warehouse space will be needed. We review rolling stock and personnel requirements, including H-2A needs, based on the expected crop size. The staff also reviews with the Warehouse Committee PCCA’s tariff to ensure that it is adequate to fund the operations of the division, but also that it promotes the flow of cotton. After a thorough review of all these items, the Warehouse Committee will make their recommendations to the board of directors.”

PCCA Warehouse Committee Chairman, Gary Feist

Feist said one of the goals of the Warehouse Committee is to continually stimulate the flow of ideas to keep PCCA on the leading edge of cotton warehousing.

“One of our priorities is to give Jay support and feedback that he can take and pass on to his group at PCCA,” Feist said. “It’s a sort of checks and balances system.”

While warehousing cotton may look simple to some from afar, Feist said it is a rather complex process when millions of bales are involved.

“It is a lot more complicated than just unloading a truck and sticking a bale in there,” he said. “It is very tightly operated and a lot of thought goes into the PCCA Warehouse Division.”

Cowart agreed with Feist and said there are many components that go into warehousing cotton that others may not realize.

“Probably the thing that people don’t realize is that every single bale of cotton is selected individually, so whoever purchases it has an exact list of bales they want,” Cowart said. “It can come from a range of buildings and locations within those buildings. In theory, an 88-bale load of cotton can come from, in the case of this plant here in Altus, 55 different buildings. Performing it and at the speed it has to be performed is pretty complex.”

While bales are constantly brought in and out of PCCA’s multiple warehouse locations, other plans to improve efficiency and effectiveness within the division are in the works too. As cotton acres increase and growers are able to produce more fiber on less land over time, more space is needed to effectively store the cotton as it awaits the journey to its final destination. In the Altus, Oklahoma, warehouse location, PCCA has expanded some current warehouses and built additional structures to meet the needs of its customers in a timely manner.

“This will be the fourth crop in a row that production has exceeded warehouse capacity at Altus,” Cowart said. “Current indications are that cotton acreage will at least sustain its current levels or potentially increase. The amount of cotton that a warehouse facility can receive is dependent upon how quickly the cotton arrives from the gins and how quickly the merchants ship the cotton out. There have been times that we were able to handle twice as much cotton because the pace of shipments allowed for it. These additions will obviously increase our rated capacity and our ability to handle crops that actually exceed our capacity.”

Oklahoma is not the only state in PCCA’s service area that is seeing an increase of cotton acres and production. Cotton is still on the rise in Kansas, which brings on an urgent need for more warehouse space. In 2018, the cooperative added 45,000 bales of storage space to the warehouse in Liberal, Kansas, and is currently looking to expand in the Wichita area.

“Something we are in the process of discussing is building a new warehouse in Kansas.” Feist said. “That is going to be a big asset for those of us in the middle part of the state, like NexGineration and Southern Kansas Cotton Growers at Anthony and Winfield. It will be much more efficient for us and will hopefully reduce our ginning cost too.”

Cowart said the need for an additional warehouse location in Kansas was brought on by many factors, including water needs, crop rotations, and grain prices.

“A growing number of producers have discovered that cotton will work in their farming operation as it provides an alternative to the current crop lineup,” he said. “In Southwestern Kansas, cotton is a great alternative to crops with a higher water requirement. In South Central Kansas, it has proven to be a very viable crop to enter into the traditional rotation of soybeans and milo. Cotton acreage has also taken on another boost due to stagnant grain prices. This has all resulted in cotton production exceeding our warehouse capacity, and the distribution of production has illustrated the need to locate some of our new capacity in the Wichita, Kansas, area.”

With much work to be completed, PCCA relies on its skilled employees to execute the necessary measures to get the job done.

“We have some very long-tenured employees that know exactly what they are doing,” Cowart said. “The gins, the growers, they trust us with their cotton to keep it in good condition and we pride ourselves on being able to get it shipped rapidly if the market is demanding it.”

Whether the task at hand is overseeing daily operations that preserve decades of quality standards or developing new ideas to make future endeavors more efficient, PCCA is dedicated to serving the cooperative’s grower-owners. From Texas to Oklahoma and Kansas, the Warehouse Division and Warehouse Committee are ensuring value is always added, one million bales at a time.

“That’s our whole goal,” Feist said. “We are there for the producers.”