Greenwood-based cotton cooperative Staplcotn landed at third on the 2012 Mississippi 100, posting $933 million in revenue in the process.
It’s a good way to start the third year on the job for CEO Meredith Allen, who took over the oldest and largest cotton marketing cooperative in the U.S. in late summer 2010.
“(It’s been) challenging and, at the same time, very rewarding,” Allen said. “We have just completed a record year in terms of the price paid to our cotton producers. Unfortunately, the cotton futures market has declined rapidly in the last six months, making this year’s price to our producers considerably lower for the cotton that our producers are now harvesting.”
Managing the volatile market, Allen said, has been the hardest part of his time as CEO. “This has been hard for the entire cotton industry, especially for our textile mill customers.”
What caught him most by surprise in those two years, Allen said, are the other parts of Staplcotn that require attention.
When Allen started as CEO, the worldwide demand for cotton was extremely strong, driving prices well over $1 per pound. That is no longer the case — again, due to the volatility of the futures market.
“Because of these extreme price moves, cotton has lost significant market share to manmade fibers such as polyester,” Allen said. “It will take several years of market stability to regain this demand. We have seen the largest run up in prices ever, far exceeding the previous high prices during the Civil War. These extreme price levels and price swings had never been seen before.”
Despite the market mood swings, Allen said Staplcotn’s mission will remain the same. What will most likely change, though, is where the cotton is actually grown.
“Our cotton acres, at least for the short-term, will continue to shift to the Southeastern U.S. out of the Mid-South,” Allen said. “High grain prices and our great supply of water for irrigation in the Mid-South will be the driver of this change.”