Texas-based Farmers Cooperative Compress (FCC) announced it has reached a $1bn milestone in dividend distribution to its producer owners. The country’s top cotton producing state, Texas has a strong cotton industry, which brings in $3.5bn annually to its economy.
The co-op was set up in 1948 by a group of producers who needed a co-operative warehouse. Together they can afford to house cotton domestically and distribute it globally.
FCC has been profitable every year since inception. Today over 8,300 farmer-members own 208 warehouses, with a licensed capacity of more than 2.2m bales. The co-op is the largest cotton warehousing entity in the world, with facilities in Lubbock, Plainview, Levelland, Floydada and Stanton.
“The continued success of Farmers Cooperative Compress is in direct correlation to the hard work performed by our producer-owners,” said Ron Harkey, president of FCC. “We are proud to be a part of such a significant achievement. This cash return on our producers’ investment will help ensure the viability of farms across West Texas and shows the strength of US cotton in the domestic and global markets.”
The USA is the third-biggest cotton producing country worldwide after China and India. FCC warehouses and delivers around 35% of the cotton ginned in Texas, which accounts for 17% of the US’ cotton crop production. FCC works with two other regional co-operatives – Plains Cotton Cooperative Association, a producer-owned cotton marketing association, and PYCO Industries, a producer-owned cottonseed oil mill.
Co-operatives have been a common form of organising for USA farmers active in the cotton industry since 1919, when producers formed co-operative gins to have greater control over policies and practices.
During the 1930s, farmers began setting up federations to crush their cottonseed. The cotton ginned by co-operatives also began to be merchandised by regional co-operative marketing associations.
The cotton industry is facing tough conditions, with low cotton prices and global oversupply. Earlier this year the US Department of Agriculture (USDA) announced it would provide targeted assistance to cotton producers to share in the cost of ginning through one time payments. The programme makes payments to cotton producers for cotton ginning costs, but the USDA believes it will indirectly help the broader marketing chain associated with cotton and cottonseed, including cotton gins and cooperatives.
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