What does a cotton broker do? Sounds simple - sell cotton.  Where soybeans or corn or sorghum might rely on a simple sale, find market price and deliver the crop. But cotton requires more finesse - someone to perfect the connection between bale and buyer. 

In Peach Orchard, Mo., Barry Bean of Bean & Bean Cotton brokerage uses generations of cotton lineage, networking and a touch of psychology to match merchants to the right bales at the right price.  

Build relationships  

“As a broker, we're basically the only people in the whole chain who aren't really part of an adversarial relationship,” Bean said. “A merchant needs to buy his cotton as cheap as possible and the producer needs to sell his cotton as high as possible. When a producer is going straight to the merchant, there are different priorities. In that instance, somebody is going to walk away a little better off than the other.” 

The broker provides neutral ground where both parties can determine price, and negotiations can proceed with both parties aimed at a satisfactory purchase price. Bean said brokers do leave the deal with a little something of their own, typically a per bale commission paid by the merchant. 

“We make the same selling cotton at 30 cents that we do selling at $1,” Bean said. “Our incentive is to build relationships with producers that go on for years and years. In the end, we've all got to be able to make a profit out of this deal. If merchants get rich at the expense of producers, we start losing producers, and vice versa.” 

Related:Two tips for better cotton marketing

Barry Bean is a multigenerational cotton broker and farmer operating Bean&Bean Cotton Company from Peach Orchard, Mo. (Photo by Barry Bean)

Know the industry  

Being a broker means daily submersion in the excessive influx of market information that farmers never quite have time to overcome. It’s not glamorous, but it is necessary to make educated, profitable deals. 

“Basically, our day starts with a whole lot of phone calls, looking at emails, and reading reports,” Bean said. “That’s why no one has ever made an action movie about cotton brokers, because it's not that exciting to watch a guy sit around, talk on the phone, look at the web and send and receive emails and faxes.” 

The result of those office hours is more reliable decisions for producers in the field.  

“I have to be up to date on the markets. I need to know the industry,” Bean said. “Historically, cotton merchants have had a little bit of a checkered past, and I have to be sure that every bale of cotton that I sell goes to someone who is going to pay for that cotton, and then also for my merchant customers, I have to be sure that every single bale of cotton they buy is delivered, too.” 

Find the best buyer  

Vetting potential buyers is one service brokers routinely have provided for producers since cotton production began in the U.S.  

“As recently as 10 or 12 years ago, we had some folks who would come up into the country would offer a heck of a price - a penny or penny and a half better than anybody else was offering,” Bean said. “They’d take the cotton, and then there would be a problem with it. They were slow to pay, or in some cases, there was no pay. And, when a merchant goes out a substantial ripple goes through not just the producers who sold to them, but the whole community.” 

While finding reputable merchants may not be as challenging as it was in the past, finding a buyer for specific cotton is still a puzzle that daily challenges brokers like Bean.  

Sell select cotton  

Often, a broker bartering with a buyer can gain a producer of quality cotton an extra bump above basis. And a broker’s ability to create those opportunities relies on his ability to secure both the best quality cotton possible and the best reputation with merchants. 

“With grains, a soybean is basically a soybean,” Bean said. “When you buy a truckload of soybeans, you're not looking for a truckload of specific soybeans. But when you buy a truckload of cotton, obviously you are buying specific bales, and each one of those bales has got its own unique set of qualities.” 

Marketing bales to merchants means familiarity with the products they create, and the unique blend of cotton suited to those products.  

“We start looking at the quality of the crop, and we match that with our merchant, because we know who's got a home for some high-quality cotton that they can ship right away,” Bean said. “We know which cotton is in which warehouse and meets their particular quality needs and at that point, we are in the best sense of the word, the middlemen who make the thing work.”