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Texas cotton company bases operation on vertically integrated poultry model

Pat Pilgrim Cotton
Pat Pilgrim explains how he’s incorporated some of the technology used in poultry operations into a state-of-the-art cotton gin.
Texas cotton company trying to build vertically integrated program similar to poultry operations.

Todd Rushing has been growing cotton in northeast Texas “for 20 or 30 years, through a lot of ups and downs,” including battling boll weevils, farming through dry years and wet, and always wary of the cost/price squeeze, which has gotten tighter in recent years.

Rushing, who farms “about two miles west of Cooper,” remembers when cotton seed cost about $30 a bag. “It’s closer to $350 now,” he says. Everything else has gone up, too — fertilizer, equipment, chemicals. Well, everything’s gone up except the price of cotton, which “is not that good right now,” he says.

But cotton has worked out pretty well for him, despite the risks of weather, pests, and the ebbs and flows of markets and production costs. Still, it’s a risky business.

Lately, he’s been taking a bit of the risk out of dryland cotton by growing some on contract for Pat Pilgrim Farms (PPF). He contracts acres for a set price per pound. He also receives significant production inputs — seed, fertilizer, chemicals, scouting, harvesting, and ginning. “It takes a lot of risk out of growing cotton,” Rushing says, “and it takes out a lot of frustration as well.”

Pilgrim, whose family owned Pilgrim’s Pride Poultry for many years, built a state-of-the-art gin near Cooper two years ago. Capacity is about 175,000 bales a year, far more cotton than has been planted in the area for decades. Years ago, northeast Texas produced a significant acreage of cotton, but boll weevils and increased production costs forced most growers into crops requiring less management and lower costs.


Pilgrim believes the area needs the diversification cotton brings, but he also understands that getting into the cotton business from scratch is an expensive proposition. That’s why he established Pat Pilgrim Farms, PPF Gin and Warehouse, built the gin, and set up the cotton company to work very much like the vertically integrated poultry business his family ran until they sold it a year or so ago.

“Cotton left this area when it got hard to manage,” Pilgrim said from his spacious office that looks out on the gin and the gin yard, where a fleet of module trucks are parked for the season. He also maintains a fleet of 25 John Deere onboard module cotton pickers.

New varieties, the boll weevil eradication program, and improved technology make cotton easier to manage than just a few years ago, he says. “I built this gin to bring cotton back,” he declares. He’s grown cotton on his own for years.

“I think we could eventually see 200,000 acres of cotton return to northeast Texas,” he says. He had 20,000 acres under contract last year, and that could bump up to 50,000 this year, according to Jason Deckert, Pilgrim’s crop consultant. “The program worked well for farmers last year,” Deckert says.


“Growers have less financial risk, and are able to concentrate on managing the crop,” Pilgrim says. “We provide seed, chemicals, scouting — all the inputs — and harvesting. The farmer gets a set price per pound, just the same as if he were growing chickens, hogs, or whatever.”

“I know the price going in,” says Rushing. “I know what I will get out of the crop from the market. The program takes a lot of the variables out of growing cotton, so it’s a really good option, especially while the cotton market is weak.”

He still takes care of land preparation, lease arrangements, some equipment costs, and fuel. He has his own harvest equipment that he can use if he chooses.

With all commodity prices trending below production costs, Pilgrim says, a farm program safety net that’s not keeping pace with those high costs, and a few production setbacks in the past few years, area farmers have faced increased problems just obtaining financing to make a crop.

“We make it easier to get financing,” he says. “They don’t need to borrow as much money. We’re trying to take care of the farmer, take some of the burden off him, and allow him to concentrate on making a crop.”

Rushing sees that as a significant advantage. “The cost of financing is a lot lower,” he says. “It has gotten harder to borrow money every year.” With lower overhead, Pilgrim says, some farmers may opt to update equipment or lease more acreage and expand.


Another advantage, he says, is providing a uniform product to retail outlets. Pilgrim decides which varieties to plant each year, based on what end users tell him they want. Last year he contracted acres to grow Stoneville, Deltapine, Croplan, and NexGen varieties. “I may tighten up to two or three varieties to fit the region and retail needs,” he says. “And we will change as needed.”

Pilgrim Farms runs trials every year to compare varieties and find the best fits for the region. Pilgrim says variety selection makes a significant difference in yield potential, and he prefers long-maturity selections. “In a good cotton year, a late variety will produce 150 pounds to 200 pounds more per acre, with better quality.”

Deckert says Pilgrim Farms starts working with contract farmers during the winter on things like tillage and fertility management. “We supply nutrients, which is an advantage for the grower. We also offer scouting and harvest to non-contract growers who gin with us.”

Disease and pest management are also factored into variety selection decisions. For instance, they look for varieties with bacterial blight resistance to plant in fields with a history of the disease. Topguard is applied for root rot control in fields where that problem has been identified.


“A lot of farmers got away from cotton because of boll weevils and root rot,” Deckert says. “New technology makes it less trouble to grow cotton. And our service makes it even easier.”

The module-pickers improve harvest efficiency and bring in better quality cotton, Pilgrim says. “The onboard module picker is the most economical machine that has come along in a long time,” he says. “It replaces three machines and a module builder. Loading the round bales onto a flatbed truck is also more efficient.” The wrapped bales protect cotton from rain damage, and he has seen some improvement in grade from bales stored for three to four weeks. “I’ve noted loan value increase by 2 cents a pound,” he says.

Scheduling harvest of 20,000 or more acres is a challenge, Pilgrim says. “Scheduling is critical, but since we scout the crop all season we’re able to line up defoliation as conditions warrant, and then schedule harvest.” They plan harvest aid applications in order to stagger harvest, and typically commit as many pickers as necessary to pick a field quickly and move on to the next one that’s ready.

Bringing in a cleaning service at night also extends the work day for a picker, Pilgrim says. Operators don’t stop and clean pickers. “Service crews come in at night to clean the machines, so the operator gets about two extra hours of harvest each day. Spread over 25 pickers, he says, that amounts to one extra picker in the field per day.

“We don’t want to extend harvest any longer than necessary. We get the cotton out as quickly as we can, because quality is important.”


Pilgrim says he maintains or improves on quality in the gin. Speed is not that important. “Quality is Job No.1 in the gin. We’re not concerned about the number of bales per hour — we actually slow down to increase the quality going out the back door.”

The loan rate for the 2016 crop ranged from 50 cents to 51 cents a pound, but included “some pretty rough cotton. We are also vigilant about contaminated cotton. In the gin, we keep track of potential contamination on a daily basis. Plastic bags that blow into the fields are the worst contaminants, so we stop, get off the picker and remove them.”

Deckert says the service aspect of the cotton company adds value and reduces costs to the producer. He watches for weed problems, including herbicide-resistant weeds. He says they will plant some XtendFlex cotton varieties this spring to help manage resistance. “We also use Warrant and Caparol for pigweed, and occasionally rip till deep to bury weed seed.”

He evaluates nutrient needs, balancing fertility with available moisture, scouts for insect pests, and says he has seen no late-season problems. “We do monitor for worms.” Evaluating crop maturity for harvest aid application is part of the scouting chore. And it’s all part of the cotton company service to contract growers.


They recommend rotation to help manage weeds and other pests. “Rotation offers an advantage,” Pilgrim says. “Since 2011, we’ve seen increased production after the first few years of a cotton rotation. Cotton complements other crops with different weed control options, different economics, and different farming practices.”

Rushing plants about two-thirds of his acreage in cotton and plants some milo and wheat, “mostly for rotation. We have too many weed problems with cotton after cotton,” he says. That’s part of the stewardship philosophy that Pilgrim incorporates into the process. He says producing a sustainable product is part of the PPF mission, and is something retailers are demanding from the field to the final product. “Sustainability in today’s environment is vital.”

Pilgrim’s ultimate goal is to create a completely integrated cotton company that takes the product “from seed to shelf.” His plan includes a spinning mill and a manufacturing facility to make “socks or some other product. It would be huge investment in the community.” Deckert says one of their growers likes the idea. “He says he would be thrilled to see a product, made from his cotton, on a local shelf.”

Pilgrim believes the gin and the opportunity to grow cotton without a huge investment in equipment and materials will bring cotton back to northeast Texas. And he thinks timing is right for this service. “We have a near perfect storm of low prices for our commodities, difficulty in obtaining financing, high costs, and limited use for cotton equipment, plus a need to diversify.”

He watches the futures market to price cotton throughout the year. Much of the thousands of bales of cotton in his warehouse, adjacent to the gin, is bound for Indonesia.

He expects acreage to increase this year in northeast Texas, and so does Rushing. “I think we will see a big increase in cotton, but not as much as we used to grow. Folks are just beginning to plant corn, and the market doesn’t look that good.”

The price of cotton is better, but still not great. “This program takes some of the worry out of it,” Rushing says. He plans on putting some of his acreage under contract with PPF again this year, “but maybe not all of it.”

Pilgrim expects to see acreage increase by 5 percent across northeast Texas, possibly to 75,000 to 80,000 acres. “Some farmers who haven’t planted any cotton for a long time are planting it this year,” he says.



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