About a dozen Texas Panhandle growers frankly are tired of seeing their markets for high-quality food corn decrease and their dwindling irrigation water cost more than ever to pump. They've done more than just switch acres to cotton to lower production costs. They're building their own gin to handle the harvest.
Called the Top of Texas Gin, LLP, construction began in April and will be finished in time for this year's harvest. It's a new venture for growers who see economics as the biggest reason to go with more cotton.
“New unit-train corn handling facilities in Hereford have severely hurt our corn basis by 8-10¢/bu,” says Dale Kleuskens of Hereford, who has shifted many more acres into cotton the past three years. “That, plus the high cost of natural gas for irrigation and the declining water table has made corn a much less attractive crop for many of us.”
As short as 11 years ago, there were more than 500 cotton gins in Texas, the nation's largest cotton producing state. Now, there are about 320. A few tough years, as well as consolidation, are the main reasons.
In irrigated areas where thirsty crops like corn are running energy costs through the roof and causing groundwater supplies to shrink, more cotton is being planted. That's why the new-venture growers, some producing only their third or fourth crop, have formed a partnership to build a 30-bale/hour gin 25 miles outside of Amarillo, TX, near Hereford, where cool, dry summer nights have previously turned growers away from cotton.
“I feel cotton is going to have the strongest future of any crop in our area. Cotton has advanced more technology-wise than any other crop we grow,” says Kleuskens, who's grown cotton some 16 years.
Randy Darnell of Amarillo, TX, is in his fifth crop. “Because of the increase in acres, some of us were considering the need for another gin here,” he says. “We were approached by a gin company interested in expanding.”
The company was Windstar, Inc. of Edmonson, TX, which had over 20 years experience in gin operations. It owned three gins prior to helping form the Top of Texas operation. “There hasn't been that much of an increase in cotton acres across West Texas because of lower prices and lower water supplies, where only cotton or peanuts are grown,” says Larry Nelson, Windstar president. “That's why some are surprised that a new gin is being built in the Panhandle.
“But people have to understand that even though cotton is not shiny these days, it is shinier than the options for some other crops. If the trend continues, we'll see a dramatic increase in new cotton acres.”
The grower-partners established their own financing for the gin. It will employ seven people, including manager Billy Sam Borchardt, a veteran of gin management.
“We're anxious to see the gin in operation,” says Dick Fellers of Hereford, who along with Darnell and Kleuskens, sees the need for added gin capacity.
Because of past gluts during harvest and adverse weather conditions, Kleuskens says cotton remained in the field too long. “We missed some marketing opportunities because we couldn't get it ginned,” he says.
In addition to the new gin as a market, the growers are participating in a marketing pool operated by Nelson. They anticipate better opportunities to receive a better price for their crops.
As more shorter season cottons; Roundup Ready and Bt lines; and better growth regulators and harvest aid chemicals become available in formerly non-cotton areas, there could be even more new gins to handle production.
“We see new growing areas opening all the time,” says Darnell. “Many growers feel cotton is their future in farming.”