Staplcotn presently handles a total of 21,045 farm accounts in 10 states. Total membership in the Association, however, is 11,277 members who are located in 45 states. Total membership may also include warehouse and Stapldiscount patrons. It is commonly believed that Staplcotn "purchases" cotton from its members, but this is not so. Rather, the farmer/member simply signs an agreement passing title for any cotton he produces on a particular farm directly to Staplcotn. The cotton is then marketed in Staplcotn's name under guidelines set by the Board of Directors through its Marketing Committee.

For information on contacting the regional office nearest you, click a location on the map below.

Mill Sales Program

The President & CEO, together with the Vice President for Marketing, carry out the Association's marketing plan, known as the Mill Sales Program, by hedging cotton when sales opportunities arise. The Mill Sales Program is commonly known as "pooling". In a typical pooling arrangement, large lots of cotton from various classes are offered for sale into the market. Because large quantities are offered at one time, rather than small lots from each grower, premium prices may be obtained from the buyers. The Mill Sales Program includes two pool options: a Seasonal Option and a Call Option, as well as a split option that combines the features of the Seasonal and Call options. The Seasonal Option is one in which Staplcotn makes all marketing decisions. In the Call Option, the member reserves the right to call ("fix") a price based on the New York Cotton Exchange futures, and management merchandizes the basis. Marketing conditions change from year to year; therefore, a member should contact a Staplcotn representative for updated information concerning the Call Option. By signing with Staplcotn every member agrees that all of the cotton produced on any farm serial number under his control, must be delivered to the cooperative. Staplcotn will defend its marketing agreement through legal means if necessary.

Cotton is offered into the market throughout the marketing year for the best prices obtainable. The goal is for the member to take advantage of the highs and avoid the lows and receive the best possible average price for his entire crop. No member may intervene in the marketing operation, even if that member is signed into the Call Option. In both options, cotton is marketed entirely by Staplcotn, although in the Call Option the farmer establishes the base futures price, and Staplcotn's management merchandizes the basis. Staplcotn's pooling arrangement has beaten the reported average market price received by non-members consistently for over twenty years. As the member is paid for his cotton, an amount is deducted from each bale to cover the cost of handling. After a period of ten years the deducted amount, commonly known as "capital retain" or "reserves", is returned to the member in the form of a rebate. Therefore, in a manner of speaking, a member of the cooperative actually pays nothing in order to receive the marketing services offered by the Association.

Consignment

The reason that cotton is consigned to Staplcotn and marketed in its own name is two-fold. First, marketing (price) advantages are available when large lots of similar classes of cotton are submitted for a single sale. Second, Staplcotn, by operating on behalf of an individual grower, can utilize the Form G loan contract available through the Commodity Credit Corporation (CCC) of the United States Department of Agriculture. The Form G loan is a contractual agreement whereby cooperatives receive the loan value for its members' cotton placed in the loan at a single location, ie. Greenwood, Mississippi.

Advance Payment

The Form G loan is utilized in order to generate a prompt payment (often called the "advance" payment) to the farmer for cotton delivered to Staplcotn. All cotton eligible for the loan is pledged to the loan. Each August, the Board of Directors, depending on marketing conditions and pricing opportunities, will advance the farmer a fixed amount as cotton is delivered. If the market price in August is less than loan value, only loan value may be advanced. As cotton is sold and the price of the sale collected, subsequent payments are made to the members. These additional payments are known as "equity" or "progress" payments, and they usually begin in January. Each 60 days thereafter members will either receive a payment or a letter from the President explaining the current market position and why a payment is not possible. As cotton sales are collected, equity accumulates. When sufficient equity is accumulated, a payment is made. The final payment is made promptly following the end of the fiscal year.

Marketing Agreement

Staplcotn's fiscal year runs from September 1 through August 31. The first deliveries of cotton are usually received in early September/October depending largely on weather from planting to harvest. Cotton Specialists located in the various regional offices solicit growers to sign the Marketing Agreement and select the marketing option. The Marketing Agreement continues from year to year unless or until the member elects to withdraw from the Association. A member may withdraw from membership during the month of February by giving written notice. However, if an Option Notice has already been signed at the time the member wishes to withdraw, he cannot withdraw for that particular crop year. Some members withdraw and return each year for various reasons. However, becoming a member again will depend on whether the Mill Sales Program is open for the upcoming year.

Benefits

Staplcotn not only benefits its members, but, by its sheer presence in the market, benefits non-members as well. If Staplcotn were not here, it would be more difficult for all cotton growers to get a fair price for their crop, since they would be at the mercy of independent buyers. Myriad influences constantly impact the market. Most farmers do not have the time nor the inclination to keep up with market changes on a daily basis. For growers who market outside of Staplcotn they are betting that they know more than the major private merchants.

Over the last several years, Staplcotn has handled an average of 2.5 - 3 million bales of cotton, and has become recognized as a major exporter. Slightly less than half of the Memphis-Eastern volume of cotton production is consumed by U.S. textile mills, with another approximately fifteen percent consumed by mills in Mexico and Canada. The balance is shipped to various countries worldwide. Please refer to the marketing section of this website for more information.

Staplcotn members are able to access their information online by logging on to www.staplcotn.com/members. To use these services you must first register.

Please contact us with any questions or comments.