PCCA’s Comprehensive Marketing Tools for Growers
by Kaylee Hendricks
PCCA understands the value of its growers’ cotton and wants to give them the best marketing choices possible to enhance profits. From pre-harvest to post-harvest, PCCA offers diverse marketing choices. PCCA takes pride in innovating for farmers—we continuously evolve to be on the leading edge of cotton marketing technology.
Pre-Harvest
Seasonal Pool: PCCA’s Seasonal Pool adds value by capturing optimal pricing opportunities through the crop marketing cycle. It is acreage-based, weather-risk-free, and professional traders manage pool cotton sales. Our Seasonal Pool is an innovative way to let grower-owners focus on what they do best while PCCA generates strong average returns to the pool’s members. Leveraging PCCA’s customer relationships expands market reach by tapping into a vast global buyer network. As the pool is marketed, growers receive full CCC loan premiums and timely progress payments.
Grower Choice Pool: The Grower Choice Pool option is an excellent choice for producers who want to participate in determining the price of a portion of their crop. Combined with the strength of the Seasonal Pool, it allows growers to price at the level they choose on up to 50% of their APH. The basis is set during the Sign In/ Sign Out Period because the grower calls a portion of the price. An essential feature of mitigating risk is that Grower Choice is an acreage-based contract until bales are priced. With the unpredictability of farming, PCCA provides flexibility in case of crop failure, with no obligation if PCCA is notified before the deadline date stated in the agreement of unpriced bales.
Forward Contracts: Forward contracts can provide excellent opportunities to lock in pricing on bales. This tool best suits growers with a proven production history because these contracts require the delivery of committed bales. Good-till-canceled orders are a valuable tool for growers to manage and actively achieve their desired price targets. When loan de- ficiency payments are in effect, PCCA handles the application process automatically.
Post-Harvest
The Seam®: Marketing cash cotton online allows growers to maximize their price. The Seam provides growers access to virtually all cotton buyers, eliminating the need for burdensome manual negotiations. Access to the largest global network of buyers and textile mills broadens market reach for growers. Continuous- ly offering cotton creates an opportunity to capture sudden rises in the market and capitalize on favorable price movements. PCCA’s Loan Advance Program offers upfront cash flow and the ability to trade the equity portion online separately.
PCCA Direct®: PCCA Direct provides the convenience of receiving competitive cash prices at the growers’ fingertips. A PCCA staff member can contact growers through the myPCCA® app or the gin with an offer to purchase cotton. Growers can sign up, receive, and accept bids through the myPCCA app to gain real-time control over marketing decisions. Sales and Member Services teams can also assist with bids to ensure that growers have the support they need when making important marketing decisions.
PCCA Direct On-Call: PCCA Direct On-Call allows growers to stay long in the market without being long physical bales. Growers who believe cotton futures will increase have a chance to benefit from this tool. This option is for physical bales that are harvested, ginned, and classed. Growers can set a basis level without locking in the price, which creates an upside opportunity if futures prices rise. A significant benefit of this choice is that warehouse storage charges will stop accruing to the grower’s account. Advancing the full loan value with fewer storage charges at initial in- voicing significantly supports growers’ cash flow needs. Growers can also place a good-till-canceled order to set the final price if the market moves to the desired level.
New PCCA Direct On-Call Roll Feature: The new roll feature of PCCA Direct On-Call gives growers additional time to price. The roll feature means a grower can move the futures month to a later one if desired. By extending the pricing timeframe, growers can observe market trends, respond to changes, and potential- ly receive a better price for their cotton.
- Additional time to fix the price of your cotton
- The roll feature is best for producers not ready to call the price before the established deadline.
- Choose a new futures month to establish a new basis level.
- Roll at any time before the pricing deadline or roll date.
- If rolled, the new basis will include a 10-point commission and the difference between the months, but in no case can the producer’s basis improve or be rolled beyond the July futures month.
For more information, contact the PCCA Sales Department at 806-763-8011.
