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For Robert Royal vice president and general manager of Midnight Gin and incoming president of the Southern Cotton Ginners Association becoming a ginner was something of a baptism under fire
<p> <em>For Robert Royal, vice president and general manager of Midnight Gin and incoming president of the Southern Cotton Ginners Association, becoming a ginner was something of a baptism under fire.</em></p>

Robert Royal: Optimistic about cotton's recovery

Although forecasts for cotton acreage in 2013 aren&rsquo;t all that bright, given world stocks and lagging demand, Robert Royal thinks will be enough acreage to run his gin this year. He says he just wants to be able to weather the downturn and still be ready to gin when cotton turns back up.

When he was a boy, Robert Royal recalls, the cotton gin was a big part of the tiny town of Midnight, Miss., not far from the Humphreys County family farm where he grew up.

“In the fall, I’d tag along with my father when he took our cotton to the gin,” he says. “It was a beehive of activity, with all the trailers full of cotton, and it was both great fun and a bit scary for a youngster. My  ‘job’ was to help my father hook and unhook trailers from his truck. I couldn’t have imagined one day I’d be running the gin.”

For Robert, vice president and general manager of Midnight Gin and incoming president of the Southern Cotton Ginners Association, becoming a ginner was something of a baptism under fire.

Following a post-college stint in the Chicago futures trading pits, he had returned to Mississippi to start a brokerage business and to farm with his father.

He remembers well the day in 2001 that Peter Hairston, president of the gin corporation, “said he wanted to begin relinquishing his responsibilities and asked me to be his replacement. Peter’s a great guy, and I really couldn’t say no to him.

“That was the year everybody was growing cotton,” Robert says, “and I started my Midnight Gin career with the biggest crop that had ever been ginned here — 32,000 bales. On top of that, the gin manager announced that he was planning to move away, so I had to hire a new manager.

“Then we had a wet fall, which slowed ginning of that huge crop, with a lot of choke-ups and a lot of rotten seed. But I survived it, and we learned that the gin could comfortably handle that kind of volume.”

Prior to the ginning season, Robert had enrolled in the summer ginning school at the USDA Cotton Ginning Laboratory at Stoneville, Miss., and later went on to complete the three-year ginner certification program.

“I learned that a ginner needs a lot of skills — from customer relations to engineering to labor management to equipment maintenance, and on and on. Add to those a knack for solving problems and a fair amount of old-fashioned horse sense.”

Since that record year, cotton acreage in the area has declined, with a low point for the gin in 2010 of only 5,000 bales. The 2012 season was a bit better, with 11,200 bales.

That meant an abbreviated ginning season. “We were caught up with the early-harvested cotton by about Nov. 10, and operated on an as-needed basis after that,” Robert says. “A couple of our farmers had a late crop, so we were ginning some of that cotton into late November. We ran our last bale November 26.

“This year was particularly interesting, in that we received cotton picked on all picker row configurations: 1-row, 2-row, 4-row, 5-row, 6-row, and 6-row round baler. All our farmers had good yields and good grades.

“For most of our customers, cotton is now a minor crop — probably less than half the acres as when cotton was king — and I expect acreage will be down even more next year. But we have a core of good cotton growers, we do a quality job of ginning, and we’ve been paying good rebates, even during the downturn.

“Although forecasts for cotton in 2013 aren’t all that bright, given world stocks and lagging demand, I think we’ll still have enough acreage to run the gin this year. I just want to be able to weather the downturn and still be here, ready to gin, when cotton turns back up, as it eventually will.

Loss of gins

“I’m worried more about the loss of gins in general — all those that have closed, and others that will close. If we have a big resurgence in cotton down the road, it could be difficult to rebuild the infrastructure. If we had another acreage increase on the order of what we saw in 2001, there might not be enough ginning capacity to handle it. Building a gin nowadays is an expensive undertaking.”

While Midnight Gin’s weathered buildings may not have the slick curbside appeal of more recent plants — it is one of Mississippi’s oldest continuously operating gins — the machinery inside has been systematically upgraded, Robert says. “We have a really efficient, smooth-running plant.”

The original gin, a used line shaft plant that had been moved from nearby Belzoni in the 1950s, was so slow the press operator laughingly said he could tie a bale, walk to the nearby store for a Coke, and get back before the next bale was ready to tie.

In 1966, it was torn down and replaced with the present facility. It had two Murray 120 gin stands, later converted to 142s, and even later another 142 was added.

“The Murray equipment is built like a Sherman tank — it’s so sturdy and reliable, there has been no need to replace it,” Robert says.

“We’ve added equipment to improve pre-cleaning and lint cleaning, and have made other changes to ‘soup up’ the operation, and we get a high level of efficiency and quality. In trial runs, we’ve gone as high as 43 bales per hour, but our ‘normal’ level is a bit over 30 bales per hour.

“A few years ago, we added another stick machine and split the flow of cotton so we could run it through two machines. We were able to find another Murray machine that was an exact match to the one we had and we had it rebuilt.

“Some years back, we also installed a Lipsey GinTech module feeder with a Keith Walking Floor, which made ginning less a batch and more a continuous flow process. And we’ve added sampling and wrapping machinery.”

Robert keeps the gin abreast of new technology through a close association with the USDA Ginning Laboratory at Stoneville. In 2002, he began working with a Power Roll gin stand that has computerized controls.

After seeing the added efficiency, computerized controls were added to the conventional gin stands. The result, he says: “More bales per day, and more units for spreading costs.”

He has also collaborated with Rick Byler at the Stoneville lab on a spray system to regulate moisture at various stages of the ginning process. “It’s simple, and it has improved fiber quality,” he says.

While none of Midnight Gin’s customers have module-builder pickers, Robert says, “We’ve done some trials to see if we could handle the round modules, and we found that we can do it expeditiously without adding equipment. But, I think there would have to be a dramatic change in the cotton-grains price relationship in favor of cotton to justify these growers investing in expensive new pickers.”

He gives Gin Manager James Holley, who has been there for eight years, credit for helping to make improvements to the gin plant and to keep the operation running smoothly. “Everything James has suggested has paid off,” he says. When in full operation, the gin has four full-time employees and seven or eight part-time, all from the local area.

Farming family

Robert’s family has been a part of agriculture in the area going back to his great-great grandfather, William Henry Ellis, who grew up in nearby Yazoo City, fought and lost a leg in the Civil War, then came back to the Midnight farm that had been given to him and his wife as a wedding present.

“My grandfather, Dr. Asa Royal Sr., was a veterinarian who later went to work for Delta and Pine Land, helping to look after their mules and other livestock. With the advent of tractors and mechanization, he wasn’t needed there any more, so he and my grandmother took over the farm.

“After his death, my late father, Asa Jr., farmed here for 50-plus years. The farm probably was no more than 100 acres in my great-grandfather’s day, but it has been gradually expanded over the years. I grew up on the farm and worked with my father until I went to college.

“After earning my ag economics degree at Mississippi State University, I went to Chicago and worked for ContiCommodity in the soybean trading pit. When trading began in 10-year Treasury contracts, I spent a year doing that. It later became one of the largest contracts on the Chicago Board of Trade.”

After that, he returned home to Mississippi and, with a partner, started a brokerage business at nearby Belzoni.

“But, I had always wanted to farm, and my father was giving thought to retiring, so he and I farmed together until he retired. I couldn’t have asked for a better mentor.”

That was about the time that farm bill changes gave farmers the freedom to plant what they wanted.

“We had been growing soybeans, and [he laughs] we proved year after year that we couldn’t grow soybeans on our land without irrigation — the last year we had beans, we didn’t even harvest them.

“But it is good cotton ground. The following year, we planted cotton, made 2.5 bales per acre, and the farm has been all cotton ever since. It has been a consistent, reliable crop. Daddy always said, ‘Cotton will pay the bills.’”

Two years ago, he installed a center pivot on some of his marginal rolling land, where landforming would be cost-prohibitive.

“I still have a lot to learn about irrigation timing,” Robert says, “but it is definitely paying for itself in improved yield. I think economies of scale will be the determining factor as to whether I add more irrigation; right now, with the cotton outlook as it is, I have no aggressive plan for additional irrigation.”

Nor, he says, does he expect to buy new pickers. “I’m still using a couple of Case 4-row pickers. They’re tough, and they just keep going.”

His 10-year cotton average is about two bales per acre. The worst year was rain-plagued 2009, with only 650 lbs., “which demonstrated for me the value of crop insurance. My banner year was 2005, just shy of 1,500 lbs. The 2012 crop was a good one, close to 2.5 bales.”

The way things stand with cotton, Robert says, he has no inclination to expand his operation. “If the right acreage in the right location became available, I might consider expansion — but I’m pretty much comfortable with the present size of my operation.”

He still utilizes his experience as a trader to hedge or replace positions as part of his marketing program, but says he is increasingly using options as a pricing mechanism. “I still love to follow the markets — which I can do in real time on my smart phone.”

Robert and his wife, Frances, have two children:  Son Elliot is a junior at Mississippi College, pursuing a business degree; his passion is flying, and he is both a commercial pilot and flight instructor. Daughter Laura Ellis is a sophomore at Manchester Academy at Yazoo City.

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