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Record sales year for PCCA; $28.9 million for members.

Fueled by record cotton production in Texas, Oklahoma and Kansas, Plains Cotton Cooperative Association (PCCA) set a new record in fiscal 2006 for gross sales at $1.24 billion, up from $1.03 billion in 2005. The cotton co-op also set records for volume of cotton handled and marketed, warehouse receipts and warehouse net margins. Cash payments of $28.9 million are being made to members, including $13.8 million in cash dividends, $6.6 million in stock retirements and $8.5 million in retirement of per-unit capital retains.

The co-op's overall net margins of $27.8 million virtually matched the $27.9 million recorded the previous year.

"Early in the season, we recognized the potential for a record crop," said PCCA President and CEO Wally Darneille. "So, we built new warehouses at our facilities in Sweetwater, Texas, and Liberal, Kan., and leased additional storage capacity." The record receipts contributed to the Warehouse Division's combined net margins of $10.9 million, a significant increase from $8.4 million the previous year.

Of 6.6 million bales processed by the co-op's Marketing Division, about 4.5 million were marketed electronically and through PCCA's pools, Darneille said. This division reported net margins of $4.8 million, the second highest in its history.

"PCCA's wholly-owned subsidiary, TELMARK Inc., also set new records for the volume of cotton handled, the number of loans processed on behalf of its customers, and profits that contributed to the Marketing Division's bottom line," Darneille reported. For the second consecutive year, the combined volume of cotton delivered to PCCA's marketing pools set a new record. The pools reported combined net margins of $15.7 million.

Significant highlights for PCCA's pool marketing efforts included increased export sales and improved sales to key domestic mills. Sales to Mexico increased more than 80 percent from the previous year.

PCCA's Textile Division faced numerous challenges during the fiscal year, including a surge of imported denim jeans from Asia. "The overwhelming amount of foreign apparel, combined with one of the worst-ever back-to-school shopping seasons in 2005, kept retail inventories at levels that were not sold off until April of 2006," Darneille explained. "The division ended the year with a net loss of $3.9 million, but actually produced a positive cash flow of almost $1.7 million. Once conditions had improved near the end of the fiscal year, our denim mill was able to get back to a full operating schedule."

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Title Annotation:NEWSLINE
Author:Campbell, Dan
Publication:Rural Cooperatives
Date:Nov 1, 2006
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