PCCA - Plains Cotton Cooperative Association Logo PCCA Commentator Magazine Masthead. Vol. 31, No. 1 | Spring 1998

For Cotton Producers Along the Brazos River Pool Marketing Offers Better Risk Management

Frank DeStefano

Frank DeStefano

Popularity of the Plains Cotton Cooperative Association (PCCA) South Texas Marketing Pool continues to grow. A good example of this growth can be found along the Brazos River northeast of Austin, TX.

The South Texas pool is comprised of five geographic areas: the Lower Rio Grande Valley; the Winter Garden south of Uvalde; the Coastal Bend around Corpus Christi; the Upper Coastal Bend around El Campo and Danevang; and the Central Texas Blacklands.

Central Texas base cotton acreage signed into PCCA’s South Texas pool totaled only 5,000 acres two years ago. In 1997, that figure was 17,000 acres, and it could increase to 32,000 in 1998. Much of this potential is due to greater awareness of the pool’s advantages among cotton producers along the Brazos River where Frank De Stefano of 3-D Farms is a well-respected leader.

Frustrated by attempts to predict the cotton market and contract 3-D Farms’ production when prices were highest, De Stefano and his brothers agreed to try pool marketing. Thus far, they have been pleased with the decision.

“We were tired of trying to outguess the market,” De Stefano explains. “Even though I like the marketing function of cotton production, we now turn our cotton over to PCCA and never worry about it. PCCA has marketing professionals, and the pool consistently out performs non-pool sales,” he continues.

Production costs, especially during periods of low cotton prices, is another important factor for De Stefano and his neighbors. Insect control along the Brazos River is a major concern for cotton producers.

“We have a lot of insect pests in this area, and we’ll spray 15 times each year including defoliation,” De Stefano adds. “Boll weevil control alone will cost us $50 to $60 per acre, and some years that’s not enough.” He also notes up to 25 percent of 3-D Farms’ gross production costs is for pesticides.

“Everyone talks about managing risk and cutting production expenses,” De Stefano continues, “but we’ve cut expenses as much as we can. We must find a solution to the boll weevil, and there’s a lot of meetings being held for this purpose.” To manage risk, De Stefano considers PCCA’s marketing pool to be an excellent tool.

“The pool means our money is safe because you can count on getting your money from the coop,” he explains. “Personally, I know that it’s a big load off my mind, and we can stay in business by using the pool and all the added value provided by the cooperative system.”