Do you grow cotton?
If so, you are worried about profits.
The simple equation (Revenue – Expenses = Profit) keeps you up at night.
This is the fundamental equation for any business owner.
With this in mind, how can we get better at maximizing the price we get for our commodity?
How can we get better at marketing our cotton commodity?
Here are 8 things that I think can help.
1. Develop a relationship with a good broker.
Open a futures trading account. Fund the account with $1,000. And then invite your broker to lunch. Get to know them. And then later, call them. Don’t pester everyday. But, call when you a have a quick question. Ask about their family. I mean, actually develop a relationship. It will serve you well. Even if you work with a co-op, you can do some speculative trading here and there to get a feel for trading, and you still have a broker as an additional information resource.
2. Invite a cotton buyer to lunch.
Everything is about relationships. Ever deal with a cotton buyer in person, or talk to one on the phone? Guess what? They are human and like to eat too. Invite them out. Develop a business relationship. Pick their brain on the cotton market if they will let you. And then pick-up the check.
3. Attend a Cotton Incorporated Cotton Price Risk Management Seminar
These are great one-day events put on by Cotton Incorporated. The cost is free – but you do have to sign up. You may have to keep your ear open for locations and dates though. Go to the Cotton Inc. “Events” page linked above and “Search Events” for: Price Risk Management Seminar.
This is a “64-hour” event spread out over a few weeks that is entirely devoted to Ag. Marketing. Every grower and Ag lender should attend this. I attended in Plainview, TX in 2012. I would not have missed it.
This 2-week course gives you the ins and outs of cotton. Everything from breeding, to production, textiles, and marketing is covered. I went to this in 2011 and it was fantastic.
This one is the big one. The real deal. This is a seven-week course in Memphis that new cotton traders from all over the world are sent to. If cotton is what you do, I would try to attend. I hope I get to go to this one soon.
Sometimes the answer is keeping it simple. Don’t be paralyzed with a constant need for more information. It is not always helpful.
8. Read the archive.