Will the Mid-South cotton industry recover its economic advantage by continuing to weather the storm? Or as west Tennessee cotton producer and ginner Richard Kelley suggests, by going on the offensive?
It is perhaps the most troubling dilemma the region’s cotton industry has ever faced.
But it’s no surprise that Kelley isn’t laying low and waiting for something to happen. As a leader in the National Cotton Ginners Association and the Southern Cotton Ginners Association, he has spent much of his time urging the Mid-South and U.S. cotton industries to maintain their current advantages — efficient storage and delivery of cotton and contamination-free fiber.
He also believes the cotton industry is in need of an infusion of innovation and a proactive approach to rejuvenating its domestic textile industry.
For his contributions to an industry struggling to find optimism, Kelley was named the Southern Cotton Ginners Association’s Ginner of the Year and was honored at the group’s annual awards banquet held in conjunction with the Mid-South Farm and Gin Show. He recently served as president of SCGA and currently is NCGA president.
“The Ginner of the Year award is one of the most cherished honors a ginner can receive,” he says. “To be nominated by industry leaders — people I’ve looked up to, like ginners Larry McClendon, Bill Lindamood and Kenneth Hood — makes it even more an honor.”
Tim Price, executive vice president of SCGA, says, “Richard honors the old traditions, but he also understands that we are in a dynamic industry. He never rests when it comes to figuring how to do something a little better or a little differently.”
Kelley and his family operate Burlison Gin Co., Inc., and Kelcot Warehouses, LLC, an impressive compound occupying both sides of a curve on Hwy. 59 in the forested countryside of west Tennessee.
They are also part of a management team that oversees a large cotton, corn and soybean operation consisting of over 20,000 acres. The operation includes Richard, his wife, Charlotte, their daughter, Kerry, and her husband, Brad Williams, and daughter Leslie and her husband, Michael Roane.
Kelley was a dark-haired young man, with a wife and a couple of small children, when he borrowed nearly $1 million to buy out his other partners in the Murray gin facility that originally stood on the site.
Today, there are more buildings and newer equipment, his children are grown and married, and his hair has turned to silver, but the desire to fight for maximum profits, no matter how difficult solutions may be, still burns inside him.
Not easy challenges, when fewer cotton acres have trimmed his gross revenues, but Kelley resists the urge to cut corners at the gin, which has four Continental 141 Double Eagle gin stands with a split 10-foot overhead, a Continental 9300 press and a Samuel Jackson drying system.
After nearly 28 years of engineering, building, and maintaining equipment, he has intimate knowledge of almost every lint cleaner setting and air flow measurement in the plant.
This helps him to dig deep to find extra dollars for him and his producers. An example: To determine if an equipment upgrade is needed at the gin, he has undertaken a study of the relationship between the number of saw blades in a gin stand and the amount of lint left on the seed, to see if it’s feasible to purchase new gin stands.
For the last 10 years, he’s also been at the forefront of research on moisture management technology at the gin. “The technology wasn’t available until systems were developed that provided ginners with a measurement of final bale moisture,” Kelley says. “When you have that, you can add moisture and collect an additional $10 to $15 a bale.”
But, it must be monitored closely. “Excessive moisture can cause deterioration in the bale,” he says. “The National Cotton Council’s Bale Packaging Committee now requires that final bale moisture not exceed 7.5 percent.”
It’s part of an ongoing process that he says spurs him to strive “to be the best I can be and never be satisfied. I never do anything the easy way. You have to keep doing the little things that try to put a little more money in the farmer’s pocket.”
Can cotton come back?
As a farmer producing about 12,000 acres of cotton (down from 19,000 acres in 2012), Kelley says the wholesale shift to grain in the Mid-South in recent years hasn’t necessarily been a bad thing for farmers.
“If it hadn’t been for grains, farmers would have been struggling. But as it is, they now are in very good economic shape.”
However, now that corn prices, and possibly soybean prices, are expected to decline to much lower levels, cotton has an opportunity to reclaim some acres, he says.
“Cotton is doing well in Georgia and the Carolinas; those areas are increasing acres and their yields are good. The Missouri Bootheel has done pretty well up until this past year — it’s Arkansas, Tennessee, Mississippi and Louisiana that are hurting.”
While history reflects that cotton has survived downturns before, Kelley says, this time seems different. “We’ve been growing cotton for over 300 years in this country. It has always come back. But there have always been factors that allowed it to come back. This time, I don’t think we’re controlling our own destiny as we have in the past.
“Due to WTO regulations and mandates, the U.S. is not able to formulate and set farm policy the industry needs, as it once did. At the same time, China is sitting on a 70-million bale stockpile and, quite frankly, no one really knows what effect that will have on U.S. cotton prices, or the industry as a whole.”
What can gins do?
Kelley believes cotton gins may need to step up and make sure that infrastructure not only stays in place, but maintains its edge over competition.
“We have to make sure our ginning industry is the best it can be. But it’s hard to keep it the best in the world if we don’t keep growing cotton and keep advancing the industry.”
Ginners “may have to get into the custom-picking business,” he says, “to get some producers to come back in and grow several hundred acres. Maybe they’ll hit on it and double acres the next year. But at a few hundred acres, a grower can’t afford a $600,000 picker.”
The industry shouldn’t lose sight of what currently makes U.S. cotton attractive to end users, Kelley says. “Our shipping capability and logistics of moving cotton are the envy of the world. We also have to keep cotton as contaminant-free as possible and produce a high quality fiber.
“Other countries are watching us closely, and if we have any faults, they’re going to pick up on them and use them against us.”
He would also like for the U.S. to be proactive in strengthening its domestic textile mill industry. “Politicians say we need jobs, but they need to get off their defensive attitude and go on the offensive: create jobs, react to other countries’ policies, bring the textile industry back. Right now, Pakistan, Vietnam and India have the jobs that used to be in the Southeast.
“Somebody has to start the ball rolling — we haven’t given up on the domestic textile industry; we’ve allowed somebody to take it away from us.”
A cotton producer’s perspective
As for Kelley and his family, he says they will continue to produce and gin cotton as long as it’s profitable. Having a gin “has given us the option to pick up a little bit more income as an owner.
“Cottonseed prices have also done well. When you figure $300 a ton for cottonseed — which is what it has averaged for the last three or four years — that’s been a good asset.”
New cotton varieties with higher yield and quality potential could be another positive for cotton, he says. “There are some varieties that are making really good cotton, and there are more coming along that will be even better. This will help us, and it’s another reason we need to hang on to our infrastructure — to see what’s coming down the line.”
Kelley is well aware of the dilemma that Mid-South producer/ginner industries face. Hunker down when you should be investing in new technology, and you could lose competitiveness. Stay lean too long, and you might lose infrastructure in both ginning and harvesting capacity. Get too far behind and some other country, or state or county could come in and take your customers.
But the bottom line for cotton gins in the Mid-South is clearly linked to what growers decide to plant, he says. “Gins will survive — if, and only if, their farmers keep growing cotton and make money doing it.”
The way back may not be easy. But, says Kelley, cotton typically rewards those who work the hardest.