By Jayci Bishop
Past accomplishments are worth celebrating. The trials and triumphs PCCA has experienced are a testament to what can happen when farmers band together to accomplish a common goal. However, a more timely question is, what is next for PCCA? Continued focus on grower success.
“My hope for the next 70 years is that this company goes on to accomplish greater things than it has the past 70 years,” said Kevin Brinkley, PCCA President and CEO. “I really think the work ethic, that spirit of our farmers in the area that we work in, is going to make that possible. There are plenty of problems still left to address and still plenty of challenges. I think between the good ideas that we get from our growers and our dedicated staff, we can do that.”
PCCA has four main areas of focus for the future: Innovative Solutions, Preferred Marketing Tools, Diversification, and Communicating Directly.
“PCCA is innovating in every area of the business because our members expect it,” Brinkley said. “Working together to solve impossible problems is a distinctive of grower-owned cooperatives.”
It’s evident from PCCA’s history that innovation is in PCCA’s DNA. From technology to marketing to value-added processing, PCCA is continuously searching for ways to improve the value of Southwest cotton. One recent example of this innovation is PCCA’s intermodal rail facility in Altus, Oklahoma. While cotton has traveled by rail to ports for decades, a grower-owned facility at origin is uniquely PCCA’s innovation. The physical facility and powerful software technology allow PCCA to unload and load full-unit trains precisely in only a few hours.
“Our intermodal facility created additional opportunities,” Brinkley said. “Most of our cotton is land- locked, and we gave it access to a superhighway to our customers. We had to learn as we went about how to do it efficiently, but our teams have worked tirelessly to reduce the number of touches which reduces costs.”
Preferred Marketing Solutions
Marketing cotton is the reason PCCA exists. Consistent with our history, PCCA has launched new marketing choices this crop year to serve as many growers as possible. PCCA’s expanded preferences through its PCCA Direct® program to provide growers more control over their pricing. PCCA also added its Grower Choice Pool for 2023, allowing growers to price a portion of their pool cotton.
“The driving force behind these new choices is the market. While we believe broad participation in our marketing pool is in the best interest of all growers, we had to acknowledge that increased volatility created price swings at harvest,” Brinkley said. “The challenge to PCCA is protecting the strength of the co-op by ensuring our members can market the way they want.”
The Grower Choice Pool was requested by growers who observed harvest-time rallies during four of the last six seasons. Combining the safety of the seasonal pool with pricing power on up to half of the farm’s APH means growers will be positioned well for future harvest pricing opportunities.
PCCA Direct On-Call was created for growers that produced uncommitted cotton in a falling market such as 2022-23. On-call provided a tool to let the grower sell their physical bales to stop the accrual of storage charges while allowing them to delay the fixation of the price in hopes of a rally.
Future enhancements to On-Call and Grower Choice Pool are in development for the coming crop years. PCCA is also developing additional integrated risk management tools regardless of what type of marketing choice a grower makes.
For most of its 70 years, PCCA has dedicated itself to primarily serving cooperative gins and warehouses and the growers that own them. PCCA’s board approved a 2022 policy change that welcomes growers from all types of businesses.
“PCCA is a volume-dependent business,” Brinkley said. “With more direct competition at origin, our board believes the right course of action is to open our programs to all cotton growers and gins.”
Brinkley said to maintain a strong market presence and deliver services at the lowest costs, PCCA must maximize the volume of bales processed through its marketing, warehousing, and technology. Although PCCA’s primary focus will remain on co-op gins, the company is well-positioned to begin offering expanded choices to growers ginning at non-cooperatives.
A certainty in agriculture is consolidation. The future will bring about fewer, larger growers and gins. The result is that growers don’t spend as much time in gin offices as they previously did. In most cases, a grower’s office is their truck.
PCCA’s technology made the communications challenges less complicated by providing growers with real-time information about their crop, ginning, pricing, and markets. That same technology helps the gin push its data to growers wherever they are.
“We have several old photos of the TELCOT® system displayed at our office. Contrasted with now, growers would gather around the terminal at the gin and watch the cotton market in action,” Brinkley said. “With growers farming more acres and gins being busier than ever, it’s imperative that we keep communications clear and open.”
Recently PCCA has begun publishing more information about cotton economics through its Market Summary, a monthly discussion of the outlook for cotton prices. PCCA also devotes more resources to directly communicating with growers about its marketing choices.
“We realized that we need to tell the story of our co-op, our way. So we empowered our team members to find growers, wherever they are, and have those discussions,” Brinkley explained. “While we may have changed the content of what we publish, PCCA is still the most transparent company in the business. When our fiscal year results are reported, all our growers know what we did.”
No matter the changes that take place, PCCA’s mission to enhance the profitability of grower-owners and gins through value-added marketing programs and services rings true.
“We are doing things at a much faster pace than perhaps any time in the history of the company,” Brinkley said. “We are able to do that because we have really good technologies in place and we have hired really talented people to help us get that done. We just have to innovate at a much faster pace, because that is how fast the world is changing around us. If we can do that, if we can meet that challenge – I think you have a company that endures for a long, long time.”