The U.S. cotton industry today is clearly different than it was 10 or even five years ago. That’s especially true out West, where water availability and higher profit potential from other crops drastically reduced California cotton acreage to the lowest point since our cooperative formed in 1927. The global economic crisis and commodity market volatility have altered the cotton market, perhaps forever.
Despite these changes, Calcot has remained a strong company, though it has not been easy. I attribute this to our unique co-op structure: An enterprise created to directly market cotton produced by family farms, and still owned and directed by those family farmers, 83 years later.
I’m not saying that we have not been affected by tough financial times; we have, as have many merchant firms. But I gain some confidence in the fact that we have experienced hard times before and prospered.
This is due to the fact that we view difficult economic conditions as an opportunity to examine and analyze what we’re doing, keeping the best ideas and practices and jettisoning those that no longer serve our purpose.
Calcot has a proud history and an excellent reputation. Insuring we have a successful future meant taking advantage of the downturn to study everything in our business model and see if changes were warranted to put ourselves in a position to capitalize on opportunities.
To that end, our board of directors and management developed a strategic plan to build a better company, one poised for even greater success. In essence, the plan focused on reducing costs and increasing growth, and I believe our business is set up for success in the long term.
This was neither an easy nor painless process; a cold, hard look revealed we needed to improve results in several key areas to meet the needs of today’s members. But, it also shed light on potential savings in our business operations, which provide the fuel for the growth we want to achieve.
Among key elements: We needed to focus more clearly on our core mission and markets and aggressively reduce costs across all areas of our operations. We redesigned our organization to narrow its focus, enabling faster decision making but putting bigger responsibilities on key people.
We had to make some difficult but necessary choices about where our resources will be invested, and it meant a painful reduction in our work force. However, today we have a stronger group of employees who are passionate in their dedication to working with our growers.
We also focused on innovative and improved processes of how we market and ship cotton and the strategies we can use to produce the best prices possible in a given marketing year.
The never-ending challenge is maintaining our focus on our members and their textile mill customers. Devoting the necessary time and energy to achieving their often widely divergent goals is not easy, but it is critical to our success.
To members and staff we have conveyed a greater sense of urgency and the need to make smart, informed and disciplined decisions in all matters. We are developing new markets and new relationships, and we are leveraging our members’ and employees’ immense pride and passion for what they do into visible, tangible and positive results.
I am confident we are on the right path and will continue to provide excellent returns to our growers. Following this path is not easy, but it is necessary to make sure Calcot succeeds as a first-rate, profitable and enduring business that continues to meet the needs of our farmers and their families for generations to come.
– Jarral Neeper, Bakersfield, Calif.
President, CEO of Calcot, Ltd.
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