Father and Son Team Honored as 2013 Marketers of the Year
February 18, 2014 Marcus D. Martin and his son, Marcus L. Martin, of Casa Grande, AZ, make it a point to have lunch together nearly every day. It gives them time to talk about what’s happening on the farm. But it also gives them an opportunity to check the markets to see if they need to adjust their marketing plan.
This consistent vigilance and the willingness to adjust their plans quickly to take advantage of market opportunities earned the Martins the 2013 Marketers of the Year award, presented annually during the Beltwide Cotton Conferences.
It’s an honor that came quickly for them. Two years ago, their farming operation did not have a formalized marketing plan at all. That changed when the Martins attended a Cotton Incorporated Cotton Price Risk Management Seminar in Maricopa, AZ.
“We’ve been long-time members of Calcot,” said Marcus D. “Throughout the 30-plus years I’ve been a member, I’ve used their seasonal pool and their call pool. Calcot was also one of the sponsors of the marketing seminar. My son had recently joined the farming operation, and it seemed like a good opportunity to learn more about marketing.”
“I came in totally new to it, but wanted to learn more about marketing cotton,” recalled Marcus L. “I knew how to run the farm machinery and irrigate. But if I wanted to better prepare myself for this new business world that cotton is today, I knew I needed a better understanding of the markets.
“Now, I go every year.”
The Martins represent the third and fourth generations on the family’s Casa Grande farm. Marcus D.’s grandfather, George, and father, Noel, began a farming partnership in 1946 following Noel’s return from the service after World War II. Marcus D. joined the operation in 1977, and Marcus L. signed on in 2011 after college, three years in the Air Force and a stint working with a good friend.
The farm consists of 750 irrigated acres. Nearly half of those acres are in cotton, with the rest divided between alfalfa and small grains.
Making the Marketing Leap
Don’t get the idea that marketing cotton is new to the Martins. Marcus D. always managed their crop through the Calcot seasonal pool and call pool. Where or how he placed it in the pools depended on the year.
“Coming off of 2010 and 2011, the smartest marketing I could have done was to do nothing,” he explained. “I did have a plan, then cotton went to $2.25. Guys who did nothing were just patting themselves on the back.
“I’ve been in this business for 37 years, and that works maybe once every ten years,” he pointed out. “I fell victim to it that year. I sold cotton at around 80 cents and sold more at $1.35. It was hard when the market was $2.25 and I sold it at 80 cents. But I knew long term it was the smart thing to do.”
That’s also when he knew it was time to hone their marketing skills.
“The first marketing seminar we attended sparked a lot of interest, ideas and questions,” said Marcus D. “They gave us workbooks to take home, and we sat down over lunch and talked about the options that were available to us. Creating the marketing plan was our first challenge. The second part was to start executing it.”
Managing the marketing plan fell to Marcus L. He recalled that the first plan was relatively simple, since cotton prices were at a dollar. The following year, he heard something in the seminar that sparked a move into true market management.
“I had no idea about calls and puts – or how to get them,” he said. “Dr. Carl Anderson said to think of buying the first put as a lesson in marketing.
“At that time, Calcot was doing half and half – half in the seasonal pool and half in the call pool. I consulted with Doug Starr at Calcot and bought six put options at 80 cents to cover my call pool cotton,” he recalled. “After that, everything, luckily, went our way. We were able to call the cotton at a higher price.
“I think we fixed it at 90 cents,” added Marcus D., “then bought the 80-cent puts. We ended up collecting 11 ½ cents on our puts. We purchased one put and felt that it was pretty painless, so we bought 500 more.”
“Doug Starr was really helpful,” said Marcus L. “He said the put prices were really reasonable for as far out as we were purchasing them. We were looking at it like insurance that guarantees you a price. We basically wanted to give ourselves a floor, and things worked out.”
Part of the Daily Routine
Now, marketing for the Martins is just like any other job on the farm. They build their annual plan early each year and tend to it every day.
“Smartphones have made this so easy,” said Marcus L. “I like to read as many articles as I can about the market and check it several times a day. If I’m running a cultivator or something with GPS, I’ll pull out the phone to see what’s going on or read an article.
“That’s one of the things that’s really stressed in the seminars – take time each day on the market,” he added, “and that’s what I’ve tried to do. I’ll look at the market in the morning, then look again before we go in for lunch. Dad and I will talk about what the price is doing today and toss ideas off each other. We try to spot trends.
“If the market goes one way, I’ll definitely call and see what a put would cost me in the other direction,” he added. “It seems to go up and down throughout the year, and I’m looking for that opportunity for a big day.”
“You can’t be successful today without paying attention. Things could be over in a second. You just have to watch it.”
Marcus D. agrees. And he suggests that others looking to improve their marketing efforts give it priority treatment.
“Coming up with a plan and executing it isn’t easy in a day-to-day operation,” he stated. “But you can’t put it on a back burner when other jobs around the farm need to be done. If you have a plan and things are coming together at the price that you’ve determined, you have to stop what you’re doing and follow your plan.
“It’s as important as anything else you’re doing on the farm.”
Cotton Grower, the Intercontinental Exchange and the Certified FiberMax program of Bayer CropScience are pleased to honor the Marketers of the Year. For 23 years, the award has been given to U.S. cotton growers who demonstrate excellence in a marketing program. It is presented during the National Cotton Council’s Beltwide Cotton Conferences.
GET THE NEWSLETTER TODAY!
