This fall’s Calcot Limited cotton marketing cooperative annual meeting was one for the record books as the organization announced the election of new chairman Greg Wuertz, higher to top prices paid to members, and the first female director in the association’s 87-year history.
After four years at the Calcot helm, outgoing Chairman Ron Rayner passed the gavel to cotton grower Greg Wuertz of Coolidge, Ariz. who will serve as the co-op’s ninth chairman for the 2014-2015 seasons. Wuertz is the third Calcot chairman from Arizona.
Wuertz served as a Calcot vice chairman over the last year. He is the immediate past chairman of the Arizona Cotton Growers Association.
Calcot members also elected two Calcot vice chairs - California cotton grower Jeff Mancebo of Dos Palos, Calif., and Clyde Sharp of Roll, Ariz. Sharp and Wuertz served this past year as the co-op’s vice presidents.
Mancebo’s father, John, previously served as a Calcot board director.
In a first for Calcot, Tiffany Turner of Gila River Farms in Sacaton, Ariz., was elected District 6A director, becoming the first female director in the co-op’s history. Turner will serve a three-year term.
Calcot provides cotton marketing services in California, Arizona, New Mexico, and South Texas.
Looking at the global cotton industry, Calcot President Jarral Neeper discussed China’s cotton policies with the co-op members, including the Chinese government’s high subsidies to its growers over the last several years.
Neeper said, “China is the single largest factor in the global cotton market.”
Over the last three years, the Chinese government purchased about three quarters of all China-grown cotton to stockpile in house – an estimated 76 million bales of an estimated 101 million bale production.
“The good news is China hasn’t dumped its cotton all at once on the global market and sent prices to the rock bottom.”
Global stocks are in the 100 million bale range, Neeper says. With this year’s expected global cotton production of about 118 million bales, stocks could rise to about 106 million as consumption holds steady at about 112 million bales.
Despite the challenges with China, Neeper says that Calcot has done a fairly good job marketing its members’ cotton.
On prices to be paid to Calcot members by early October, the Calcot board approved a final settlement of more than $5 million. For California/Arizona Upland in Calcot’s seasonal pool, a final payment of three cents was paid on a base grade of 31-3-35 and better - for a final price of 78.00 cents per pound, a penny higher than last year’s number.
Prices for Desert Southwest-grown Upland cotton in New Mexico and Far West and South Texas are identical at 78 cents. For Pima cotton, a final payment of 14 cents per pound will result in a record final price of $1.7240 per pound, about 15 cents higher than Calcot’s previous best price.
Growers in the desert call pool will settle at 580 points off on Upland cotton fixations.
San Joaquin Valley (SJV) Acala maintained its historical premiums to other U.S. cottons, finishing at 92.00 cents per pound, UD-free, after a seven-cent payment. SJV Pima on its UD-free terms will settle at $1.74.
Looking at the 2014 western cotton crop, the largest concern outside the China issue is extreme drought and crop competition.
“We've seen (western) cotton acreage decline over the past 15 years. The drought will continue to be a major factor in the West, especially with reduced Pima plantings,” the Calcot leader said.
Outgoing Chairman Rayner thanked the crowd for allowing him to serve as the co-op’s leader. He will remain on the board as the immediate past chairman to provide input on cotton policy issues.
In his Calcot analysis, Rayner called the co-op financially strong, in part due to the co-op’s focus in recent years on its four main business goals, including include cost reductions, mostly through staff retirements and attrition to more closely match the reduced volume Calcot has faced in recent years.
Another goal is to increase Calcot’s cotton marketing volume. Calcot has expanded into South Texas which has increased the amount of marketable cotton by about 20 percent. Meanwhile, timely rains in South Texas are helping growers produce an overall good crop after several years of serious drought.
Other Calcot goals areas include improving the co-op’s capital position by reducing the marketing cost per bale, and divesting unused warehouses to increase capital. Excess warehouse capacity is for sale or lease in California, New Mexico, and Texas.
Rayner said, “I believe the Calcot marketing cooperative is in good hands. Your management team is lean and experienced. Calcot is the sum of its members.”
In other board reorganization elections, re-elected district directors (one-year term) include former Calcot Chair Charles Fanucchi of California, plus former chair Bruce Heiden and new chair Greg Wuertz of Arizona.
Elected to one-year terms by members were seven at-large directors: Californians John Pucheu, Melvin Pereira, and Jack Seiler; Steve Coester and Michael Brooks of Arizona; Keith Johnson of Texas; and James Johnson of New Mexico.