By John Johnson
A revolution in the Southwest was born in 1953 when Plains Cotton Cooperative Association was founded in Lubbock, Texas, a revolution that would eventually change the global cotton industry. Our co-op’s founders could not have imagined their bold action’s vast impact on growers across the Cotton Belt.
By some standards, 70 years is a long time for a business to exist, especially one whose industry is full of sometimes uncontrollable risks. The cotton industry is a perfect example where hazards include weather, market challenges, foreign and domestic competition, labor and transportation challenges, and changing farm policy. PCCA has survived and flourished by steadfastly refusing to succumb to such risks, much like our grower-owners. Along the way, this co-op has persevered through setbacks and introduced essential innovations.
Following the migration of cotton production to the Texas High Plains in the early 20th Century, ambitious efforts to establish a marketing program failed. Throughout the 1920s and 30s, leaders of the High Plains cotton industry remained undaunted and continued investigating the possibility of centralized marketing associations.
According to one study, the Texas Farm Bureau Cotton Association was the first large-scale cotton cooperative. This program lacked grassroots support from local coordination. However, further development of co-op gins to improve their services led to the 1936 establishment of Plains Cooperative Gins, Inc., to market their members’ cotton. A year later, the new organization began cottonseed processing and started to phase out cotton marketing, renaming itself Plains Cooperative Oil Mill, known today as PYCO Industries, Inc.
Although the oil mill had chosen to focus on cottonseed processing, the idea of a centralized cooperative cotton marketing program was never far from High Plains farmers’ minds. A significant catalyst to foster this idea was the hiring of Roy B. Davis as general manager of PYCO in 1943. Ten years later, farmers, co-op gin managers, and a Houston Bank for Cooperatives representative boarded a bus to visit regional cotton marketing co-ops in other regions of the U.S. Cotton Belt. They returned to Lubbock convinced they could duplicate the marketing systems they had witnessed. Davis then proposed the oil mill provide the initial capital of $12,000 to establish PCCA in 1953.
“After the bubble burst on cotton prices following the Korean War, High Plains cotton became pretty difficult to sell and began to accumulate in the CCC loan since local cotton prices were not competitive,” recalled the late Dan Davis, PCCA’s general manager from 1956 to 1978, in a 1980 interview. “At that time, there were no export subsidies, so interest began to grow in getting some kind of cooperative cotton marketing program going again.”
PCCA’s commitment to innovation was evident from the start. Our co-op’s management and board recognized the effectiveness of a seasonal marketing pool. Along with this concept, PCCA introduced its “daily competitive bid” system. The co-op would assemble cotton into even-running lots and sell it at auction. The idea proved enormously successful; however, pool marketing became less attractive as federal farm policy changed.
PCCA’s reputation grew, and the volume of cotton handled increased, but the co-op realized the need for higher-quality cotton to maximize its marketing efforts. This realization was boosted in 1963 when it merged with the Oklahoma Cotton Cooperative Association, which owned a cotton warehouse in Altus. The move also coincided with an invitation from Texas known as TELCOT®. The system expanded market access but maintained the viability of local cotton markets. A related innovation introduced by the co-op was electronic warehouse receipts.
An important effort by PCCA in the mid-1970s was helping another regional cotton cooperative, American Cotton Growers, build a denim mill at Littlefield, Texas. In 1987, PCCA purchased the mill outright, enabling it to pay millions of dollars in dividends before the World Trade Organization decimated domestic textile manufacturing
Rolling Plains farmers for PCCA to offer marketing services in their region. Growers, local co-op gins, and PCCA invested in building cotton warehouses at Sweetwater. As a result, PCCA finally had better financial stability than it possessed during its first ten years of operations.
Transforming Southwest Cotton
In 1960, PCCA began the development of a mechanical system for determining the quality characteristics of each bale delivered for marketing. The reason was two-fold: delays in receiving classing information from USDA, which impeded marketing, and to obtain more accurate data to support PCCA’s quality programs, such as length, strength, and micronaire measurements. The system was finally perfected and became known as High Volume Instrument testing, which USDA approved and introduced into all its cotton classing facilities by the 1980s.
Another project initiated by PCCA in the 1960s was the Wells Project to improve the efficiency of handling seed cotton through containerized storage, which resulted in the construction of the first cotton module in 1969. Cotton Incorporated then perfect- ed the system through its research and development activities.
Perhaps the most significant innovation that originated at PCCA in 1975 was an online cotton marketing system known as TELCOT®. The system expanded market access but maintained the viability of local cotton markets. A related innovation introduced by the co-op was electronic warehouse receipts. An important effort by PCCA in the mid-1970s was helping another regional cotton cooperative, American Cotton Growers, build a denim mill at Littlefield, Texas. In 1987, PCCA purchased the mill outright, enabling it to pay millions of dollars in dividends before the World Trade Organization decimated domestic textile manufacturing in the early 21st century. The acquisition of ACG also led to renewed interest in pool marketing. The pools managed by PCCA have been a popular option for grower-owners.
Meanwhile, PCCA has continued developing new programs to make co-op gin operations more efficient, saving them millions of dollars to pass along to patrons. Emphasis also was placed on providing grower-owners more detailed and easily accessible information regarding their accounts with the co-op, enabling them to manage their farming operations more effectively.
“Looking back over our history, we have some spectacular successes and devastating failures, but through it all, the cooperative spirit of our members has survived and thrived,” former PCCA President and CEO Van May once said. “Nobody can say we always took the safe path. Ours is a story of innovation and risk-taking with good results overall.”
The vision expressed by that small group of High Plains cotton farmers and co-op gin managers in 1953 could not have led them to believe the impact they would have on the cotton industry. The tremendous success of PCCA is undeniable as it over- came uncontrollable risks and flourished on behalf of its grower-owners.