Cotton can be marketed in multiple ways. The most common marketing option our producers use is the Seasonal Pool.  This is the lowest risk option by allowing the individual marketing companies to market your cotton for you. 

 

How the Seasonal Pool Works

     Producers sign in during the first part of the year and the marketing companies sell bales throughout the year for you. Around September, an advance is announced. This will be added to the loan rate of the initial sale of your cotton after ginning and classing. In time, you will receive a payment for a certain amount per pound. These are called Progress Payments. The time of distribution varies between companies. 

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     Another option that some of our producers like to use is the cash market (The Seam). This allows the producer to take complete control of what their cotton sells for. 

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     The other option that is becoming popular is forward contracting through bale contracts. 

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How Bale Contracts Work 

     The producer will go off of the December futures when setting their bale contract prices. Once the contract is accepted for the number of bales, each company has so many points they can take off. This can vary anywhere from 100-800 points off. Each contract has their own criteria to meet to determine points off. Some require a specific MIC and staple length.

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     Please contact Megan Smedley, Marketing Manager, for details on individual contracts and companies.