Sterling Terrell

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Cotton Ginner

Cotton Ginner

So what does a cotton ginner do?

A cotton ginner is a slang term for one that manages – or sometimes works in – a cotton gin.

It is a fairly straight forward business, if you ask me.

Cotton growers grow cotton.

This cotton is harvested and left in modules, or round bales, in the field.

At this point, the cotton grower will call the “cotton ginner” at his or her local cotton gin to come get this raw cotton.

The cotton is then picked up and trucked to the gin yard where it gets on a schedule and waits to be ginned.

During the cotton ginning process, cotton seed and cotton trash (gin trash) is removed from the cotton lint.

It breaks out into thirds.

Of a given module, approximately 1/3 will be cotton seed, 1/3 will be cotton trash, and 1/3 will be cotton lint.

Cotton seed and cotton trash is often sold later to cattle feedlots for feed.

Cotton lint is, however, baled and taken to a warehouse where it awaits sale and shipment.

Small cotton gins often have a gin manager, a bookkeeper, and a few seasonal employees. Large cotton gins can have a half dozen or more full-time employees in addition to large seasonal staff.

[More on cotton marketing here. And predicting cotton prices here.]

Revenues for a cotton gin are the sales of cotton seed and “gin trash” to third parties, variable ginning income, commissions on cotton sales, and might even include warehouse income.

Expenses for a cotton gin are paying cotton farmers (per ton) for cotton seed, and the typical property, plant, equipment, insurance, payroll and the like, of running a physical plant.

And yes, if you must know: I have worked in a cotton gin.

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Filed Under: Not BooksTagged With: #Cotton, #CottonMarketing

Cotton Growers, Stop Caring About The Market Fundamentals

Cotton Growers, Stop Caring About The Market Fundamentals

No really.

Cotton growers need to stop caring about the fundamentals of the cotton market so much.

Why?

Because if you are a cotton grower, they don’t matter for you.

In an overall sense, of course supply and demand matters. Supply and demand determine prices.

Fundamentals determine prices.

But, to any trader, or grower, (in any market) saying: “Fundamentals determine prices.”

I would respond by saying: “Yeah. So?”

You should care about what the price does. Not what the fundamentals do.

The price is all that effects you!

The price of cotton is what puts food on the table, not supply and demand.

Ginning numbers, planted acres, mill use, Stocks-to-Use ratios, the weather in China, the popularity of nylon, the price of nylon, why waste your energy on any of that?

An economist might be interested in a discussion on the determinates of cotton prices.

But why are you?

Do you actually care? Or is it just part of a narrative that you tell yourself after prices have already moved.

Is it what you talk about and tell your friends about, shaking your head after you refused to hedge at 85 cents per pound?

Here is the punchline:

The price is all you need to follow, and you need to overcome your fear of selling when the price works for you.

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Filed Under: PotpourriTagged With: #Cotton, #CottonMarketing

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