The Value of Plains Cotton Cooperative Association

Abstract

The Value of Plains Cotton Cooperative Association is a teaching case that allows students to consider the cooperative business model and the impact of this unique form of organization in agriculture. The Plains Cotton Cooperative Association (PCCA), a highly successful, innovative, and dominant cotton cooperative, is considered in this case. The general question is whether the cooperative form of organization is viable and relevant in the face of intensifying economic competition. Cotton producers and long-time co-op members must decide if they will remain loyal to the cooperative in light of recent negative publicity and disappointing returns from its marketing operations. John Williams was following his normal Saturday morning routine when he wheeled his Chevy Silverado into the gin yard. The large number of pickups still at the gin this late in the morning gave John an uneasy feeling. Like many of his cotton growing neighbors, and all of those at the gin that morning, John sold his cotton through the marketing pool of PCCA. John did not even get to the coffee pot before he became engaged in a heated discussion about the cotton market in general, and PCCA's cotton marketing in particular. An article in the local morning paper had described P CA's pool operations as criminal and mismanaged. The article detailed how some growers who left the pool the previous year had profited handsomely. One grower had sold his cotton for 674 per pound while the pool had only paid 554 per pound. Like everyone else at the gin that morning, John calculated how much an additional 12? per pound would have added to last year's bottom line. John would have earned over $115,000 in additional revenue on the 2,000 bales he sold (at 480 pounds of lint per bale). As John headed back to his farm shop to work on the planter, he was thinking more about marketing his next crop than growing it. He had participated in PCCA's marketing pool each year knowing that it had a history of