Member Marketing

Servicing the Mid-South and Southeast

Mill Sales Program

The Mill Sales Program is Staplcotn’s comprehensive cotton marketing solution. It is designed to provide the membership direct access to textile mills and cotton buyers all over the world, as well as excellent price risk management options that maintain maximum flexibility. A basic element of the Mill Sales Program is the concept of “pooling.” Growers in the Staplcotn pool attract the attention of textile mills, unlike individual growers, because the pool makes it possible for textile mills to purchase larger quantities and specific qualities directly from a producer throughout the year. Both the growers and textile mills benefit because they do not have to trade through a middleman.

Some of the many benefits of the Mill Sales Program for cotton producers are:

  • Professional risk management services provided by Staplcotn’s marketing team
  • Staplcotn’s time-tested financial strength and proven results
  • Flexible marketing options
  • Access to the global cotton buyers
  • Less time spent on marketing
  • Forward pricing opportunities on all cotton acreage
  • No individual margin calls or commodity trading accounts
  • Premiums paid for higher quality cotton
Program Options

The Mill Sales Program includes three marketing options from which producers may choose to manage the price risk of their cotton crop. These options allow the producer maximum flexibility in either a hands-on or hands-off approach when pricing their cotton. A great feature of all three options is the convenience of not having to market the physical bales of cotton, leaving more time for the other aspects of farming. Staplcotn sells and ships the cotton to the final buyer regardless of the marketing option selected by the member. The basis, adjusted for premiums and discounts from the base grade, is applied consistently across all of the options. Further, the member receives the benefits of hedging in the futures market without the burden of meeting margin calls. Finally, with Staplcotn’s more than 90 years of proven history and renowned financial strength, members can rest assured they will get paid for their cotton and the price returned will be competitive.

Producers may choose Staplcotn’s Seasonal Pool Option, the Call Pool Option or the Call/Split-Seasonal Pool Option. An option is chosen each crop year for each USDA Farm Serial Number contracted with Staplcotn. Producers with multiple farms may choose different options for different Farm Serial Numbers, and options may be changed from year to year. Each option allows the producer to cover the entire cotton production on a Farm Serial Number.

Seasonal Pool Option

The Seasonal Pool Option is best for producers who want the most professional management of pricing and marketing decisions. Staplcotn’s CEO and the Staplcotn marketing team make all pricing and hedging decisions for the bales in this option. Staplcotn’s marketing team uses a combination of futures, options, the Commodity Credit Corporation Loan Program, and physical sales contracts to return a competitive price to the members in the Seasonal Pool. Management may use a combination of these tools before, during or after harvest. Producers in this option are paid the same price for bales of equal classification based on the hedging results of this pool.

Call Pool Option

The Call Pool Option is designed for producers who want to price their own cotton. This pool operates similarly to an acreage forward contract. In the Call Option, the producer has the right to establish a fixation price based on the ICE Futures U.S. Cotton No. 2 market. Producers in this option are paid different price levels for bales of equal classification totally dependent upon the level at which they fixed the ICE Futures price. A basis adjustment is made to each producer’s fixation(s) based on the basis received on all bales marketed by Staplcotn in the Mill Sales Program. Any Commodity Credit Loan Program benefits are managed by Staplcotn’s marketing team and are paid through the basis adjustment. The individual fixation levels do not affect the basis paid to each member.

Call/Split-Seasonal Pool Option

The Split-Seasonal Option is a hybrid of the other two options in that the producer designates the number of bales from a Farm Serial Number for which they will fix the price, and the balance of the production from that Farm Serial Number goes in the Split-Seasonal pool. While producers must determine the amount they call in bales, there is no minimum or maximum of expected production that must be designated. Bales delivered are first applied to the Call Option and the balance to the Split-Seasonal pool. The producer is paid two different prices if this option is chosen. One price is based on the level at which they fixed the ICE Futures price (adjusted for the basis) on the bales designated as Call Option bales, and the other is based on the price attained by Staplcotn’s marketing team for all the bales in the Split-Seasonal Pool. The Split-Seasonal Pool’s final price may differ from that of the Seasonal Option, depending on the timing of hedging opportunities.

Marketing Agreement

Before planting, members contract to deliver their production to the cooperative by signing the Staplcotn Marketing Agreement. Cotton Specialists are conveniently located in the main cotton production areas of the Mid-South and Southeast and are there to explain Staplcotn’s Mill Sales Program. To become a Staplcotn member, producers must execute the Staplcotn Marketing Agreement and a Staplcotn Option Notice. The deadline to become a member of Staplcotn is currently March 31st of the year of planting. However, the Board of Directors may choose to close to new members at their discretion. The Marketing Agreement is a ten-year agreement, but assuming no Staplcotn Option Notice has been executed by the producer, the producer may elect to withdraw from the Association at any time prior to the last day of February of the year of planting by giving written notice. A member who withdraws from the association may rejoin the association in future years; assuming the Board of Directors has not closed to new members. Even when Marketing Agreements remain in place from year to year, members will be contacted by their Cotton Specialist to select one of Staplcotn’s Mill Sales Program marketing options before March 31st of the year of planting.



Advance Payment

Staplcotn settles on Memphis Cotton Exchange “Rule 5” terms. Staplcotn makes an advance payment to all pool members once electronic warehouse receipts (EWRs), along with classing data, are transferred to Staplcotn. All members in the Seasonal pool receive the same advance payment for the base grade with each bale’s quality determining the premiums or discounts that are applied to the advance payment. Members in the Split-Seasonal pool receive an advance payment in the same manner as the Seasonal Pool, but the two pools’ advance payments may differ. Call Pool members who have already fixed the price of their cotton are advanced their full average fixation price less the advance basis. If no fixation is in place for a Call Option bale upon delivery of the cotton, an advance payment is made that is less than the prevailing market or the “Rule 5” equivalent of the CCC loan value.

Each year’s advance payment, advance basis, and quality adjustments are set by the Board of Directors. The advance payment and advance basis vary widely from year-to-year, depending upon the prevailing market environment. All “Rule 5” warehouse charges including only one month’s storage, the Staplcotn capital retain, and other customary charges such as Cotton Research and Promotion fees, are deducted from the advance payment.

Progress Payments

Throughout the year, progress payments are made to Seasonal and Call Pool members in addition to the advance. Progress payments are historically paid in January, March, May and September following the year of harvest. These progress payments, or “equity” payments, are made as additional sales and/or hedging opportunities arise as the year progresses. Progress payments are paid only if equity has been generated from marketing efforts. From time to time, progress payments include an adjustment from the advance for quality differences.

Staplcotn Regional Locations
Click the map ABOVE for Staplcotn Regional office information and contacts.

Main Office

214 West Market Street
Greenwood, MS 38930
Main: (662) 453-6231
Fax: (662) 453-4622



Mill Sales Program 2023

Mill Sales 2023