Cotton Marketers of the Year – Wayne and Ed Teal

Maybe what we have here is E. F. Hutton on both sides.

“We listen to people who are world-class economists and they know what’s going on all over the world,” says Wayne Teal.

“Wayne Teal is a quiet guy who doesn’t go around talking much about what he does, but when he does, you need to listen,” says Steve Verett.

Wayne and his son Ed are the IntercontinentalExchange-New York Cotton Exchange and Cotton Grower Cotton Marketers of the year. Verett is Executive Vice President of the Plains Cotton Growers. All three call Lubbock, TX, home.

“Wayne has been a leader in the area when it comes to risk management in farming,” continues Verett. “He has been a pioneer in the use of options and futures for market risk, and has used several crop insurance options, including Group Risk Protection, to manage crop risk.”

GRP (Group Risk Plan) is a multi-peril crop insurance program.

The Teals were nominated by Bayer CropScience’s Monty Christian, and the award process is coordinated by Dr. O. A. Cleveland, a world-renowned cotton economist and professor emeritus at Mississippi State University. The award presentation took place at the Beltwide Cotton Conferences in Nashville in January.

“The Teals have the forte and savvy of marketing that just jumps out at you,” says Christian. “I see the things in them that you want to see in the Marketer of the Year.

“In talking to growers, sometimes I’m told that they are growing for the loan, because that’s where the market has been for the past several years,” Christian continues. “They may be shooting for an extra cent or two, but when you talk to Wayne Teal, he knows exactly where the market opened, he knows what the quotes are throughout the day and he knows where it closed. The Teals are just unique.”

Christian says that about a year and a half ago, Bayer commissioned a market survey through an independent company. “What I wanted to know,” he says, “was how a cotton grower markets his cotton.”

One of the most significant findings of the survey was how widespread the use of marketing pools were. “So many people go into pools because it’s safe and they don’t feel like they have the expertise to go beyond that. That’s the advantage of pools,” explains Christian. “But the Teals go in and make opportunities happen. They take control. I am just so happy to see them win this award.”

Adds Cleveland, “The Teals have been actively involved in cotton futures for 15 years or more. They have a keen expertise in making sure that they always establish a price floor. Then they take advantage of strategies that allow them to receive a higher price via the futures market.”

Down on the Farm

Wayne and Ed farm as separate entities – Wayne had 1,110 acres of cotton in 2007; Ed had 2,000 – but they still call themselves partners.

“Being a father and son who farm means we are partners,” says Wayne.

“We may be partners, but I take his advice,” says Ed.

And it’s advice that is the cornerstone of the Teal’s successful marketing strategy.

“I pay attention to people who are a lot smarter than me – O. A. Cleveland, Carl Anderson, Pat McClatchy, Mike Stevens, Joe Nicosia, Mike Stevens, Jeanne Reeves,” says Wayne.

Adds Ed, “We can study and do what we think is best, but the market could do the opposite without us knowing why until it is too late. So we listen to people who have the experience and the contacts. I am at the age where I know it’s better for me to listen to someone who has been at this longer, has the experience, and has seen it all happen.”

Wayne says the farming operation is just one part of the master plan: “Ed and I are the simplest part of the puzzle. We can figure out a way to grow some sort of crop because we have the land, and we have the experience. We can farm the cotton, but the difficult part of it is the marketing of it. We rely heavily on others, starting with Michele.”

“Michele” is Michele Crumpler of City Gin is Abernathy, TX. “She markets the cotton; her husband gins it,” says Wayne. Eugene Crumpler, Jr., is the gin manager.

“Once the cotton his been ginned, classed, and has warehouse receipting, we print a recap showing all the aspects of the grades – micronaire, color, strength, staple – everything that makes up the grade,” says Michele Crumpler. “Then I send the recap out to different buyers that we deal with, and they’ll look it over.”

Sometimes included with the recap is a price the grower would accept. “We watch the market and try to stay on top of it. We want the buyers to remember us – we don’t want to get lost in a stack of paperwork.”

If the recap price is unacceptable to the merchandiser, the price negotiations begin. “I’ve written prices on recaps that buyers have laughed at,” Crumpler says. “But my deal is, it never hurts to ask – the worst they can do is say no. That’s my mindset – sometimes they’ll laugh, but sometimes they’ll come back and ask what he’ll take.”

New York, New York

Last July, Wayne took what he says was an unforgettable trip to New York to participate in the 2007 Cotton Forum, a roundtable type conference at the New York Board of Trade.

“I was fortunate enough to have been invited by Pat McClatchy to join them,” says Wayne. “I sat and listened – I did not talk.”

ICE Buys NYBOT

In 2007, the IntercontinentalExchange (ICE) acquired the New York Board of Trade (NYBOT) in a cash and stock deal worth approximately $1 billion.
NYBOT is the world’s largest marketplace for futures and options on commodities. The merger with ICE will see the exchange — which was originally established in 1870 as the New York Cotton Exchange — transform into a public company.
NYBOT is a mainly floor-based exchange with open-outcry trading. The deal with ICE will enable it to introduce electronic dealing alongside its current open-outcry trading.

Participants received an orientation at NYBOT, including an inside look at how the exchange operates. That included a mock trading session on the floor of the exchange.

The keynote speaker was Joe Nicosia, president and CEO of Allenberg Cotton Co. in Memphis.

Other panelists include Cleveland, Dr. Carl Anderson, Extension specialist emeritus, Texas A&M University; Jarral Neeper, vice-president, marketing, Calcot; Mike Stevens, Swiss Financial Services, and McClatchy, executive director, Ag Market Network.

“When you are in a room with people like that, you should do what I did – listen and take notes,” Wayne says. “It was a positive experience – something that will stay with me for the rest of my life. It was particularly humbling to sit at the roundtable with these master analysts. It was humbling just to be invited.”

Among the sponsors were Cotton Incorporated and Bayer’s Certified FiberMax Program.

The Certified FiberMax Cotton Program allows growers of FiberMax varieties to provide a guarantee to mills, merchants and other potential buyers that they have genuine FiberMax fiber for sale. “We’d like to be able to put a bar code on the bale saying it’s FiberMax, then follow it all the way through to it becoming a shirt,” says Wayne.

Dr. Jeanne Reeves, Director, Agricultural Research at Cotton Incorporated says, “We think it is important to be part of the roundtable, because in this world of constantly changing events. Learning how futures markets work, and how to add to your bottom line, will become increasingly important to cotton producers,”

It’s Not About Us

With between 80%-85% of U.S. cotton production exported, Wayne and Ed say what they do in Lubbock has virtually nothing to do with what happens at a textile mill in China. They are understating their importance because the High Plains is producing some of the highest quality upland cotton in the country.

“I know we’re growing cotton for the world market, but that’s not really what I think the most about – we have to grow the best cotton we can, no matter what,” says Ed. “We have the traits that have helped our yields and our quality. Our loan value used to be about 50 cents for what we thought was pretty good cotton. Now it’s not unheard of – especially in 2007 – to get 58-59 cents.”

“We’re not talking about what we can grow in Lubbock – we know what that is,” Wayne adds. “We’re not even talking about what we can grow in Texas or even the United States. Cotton is a worldwide crop.”

The Teals say prices are based more on what is done in Brazil, China, India and Pakistan. That’s where, the Teals say, their personal friendships with the O. A. Clevelands and Carl Andersons of the world pay huge dividends. “Ed and I have no way of knowing exactly what they are going to do in those countries, but Carl and O. A. do. They have been in these countries many, many times. All Ed and I can do is to look across the fence and see what’s happening in Lubbock, TX.

And This Year?

Most cotton-market analysts agree that we’re in for a bumpy ride as the 2008 crop year unfolds, but the market fundamentals are not discouraging for significantly higher prices for this year and next.

“As far as I can tell – and from the people I listen to – everybody is firmly convinced that we will see better prices for ‘08 and into ’09,” says Wayne. “I think some of it is based on the acreage reduction last year, and because it’s going to be trimmed again this year.”

But if the predictions of higher cotton prices comes true, will they be high enough to draw acreage away from other crops?

“We’re reducing the carryover, and I think that is helping. But I also think cotton prices are following the grains,” says Ed. “I’m optimistic for all commodities. It looks like ethanol is going to keep corn prices going for a while” – and the same could be said, for soybeans’ relationship with biodiesel – “so cotton is going to have to have some better prices to compete for acres.”

Captions (3):

Wayne Teal and his wife of 48 years, Mildred.

Monty Christian and Mildred and Wayne Teal.

Wayne and Mildred Teal with Dr. O. A. Cleveland

Leave a Reply

Marketing Stories
Market Analysis

Shurley on Cotton: Where Does This Wild Season Go From Here?

August 27, 2015

Cotton’s wild ride continues, thanks to a constant barrage of economic and policy forces.

Market Analysis

Cleveland: “Pickable” Bolls Unlikely from Late Texas Blooms

August 31, 2015

The time has passed to expect any of today’s blooms to make a “pickable” boll on the High Plains. While I hope every single one of them will be picked, do not expect many to make it to the basket.

Market Analysis

Cleveland: Amid Turmoil, Quality Still Drives the Market

August 24, 2015

Cotton had a remarkably positive week, considering its gains in the wake of a global meltdown of commodities and equities.

Promotion

Cotton Board Recommends $76 Million for 2016 Research and Promotion

August 14, 2015

The Cotton Board has voted to recommend $76 million to fund the cotton industry’s Research and Promotion Program for 2016.

Market Analysis

Shurley on Cotton: On the Ropes, But Trying to Hold On

August 12, 2015

The past few weeks have not been kind to cotton. But new USDA crop reports may act like the referee stepping in to stop the damage just in time.

Market Analysis

Cleveland: Prices Seek New Floor Ahead of USDA Reports

August 10, 2015

We had long held that the 62 to 63 cent support would hold, but the market corrected us once again.

OA Cleveland
Market Analysis

Dog Days of August Keep Market on a Lazy Pace

July 31, 2015

In the absence of a weather event in the near turn, the dog days of August will keep this low volatility market backing and filling at a very slow pace.

Around The Gin
Product News

Falcon Adds Two New Automated Precision Soil Samplers

August 28, 2015

Falcon Soil Technology has added two new automated soil sampling systems to its product lineup.

Product News

HUMA GRO Adds New Boron Liquid Nutrient Formulation for Crops

August 28, 2015

BORO-MAX, a new boron 10 percent liquid nutrient formulation, is now available from HUMA GRO.

Product News

On-Farm Research Helps Ease Grower Questions About Enlist System

July 31, 2015

Southern cotton and soybean growers who have worked with the Enlist Weed Control System in on-farm research plots are now sharing their experiences.

Product News

Nufarm Introduces Panther SC Herbicide

July 24, 2015

Nufarm is introducing Panther SC herbicide, a new broad-spectrum herbicide for use in cotton and other Southern row crops.

Product News

USDA Deregulates Dow AgroSciences’ Enlist Cotton Trait

July 23, 2015

The USDA has deregulated Dow AgroSciences’ Enlist cotton trait in the United States.

Product News

Ratting Out Copper Theft

June 10, 2015

A simple alarm technology is helping to stop copper thieves who target irrigation systems.

Product News

EPA Approves New Premix for 2016 for Cotton, Soybean Weed Control

May 29, 2015

Cotton and soybean growers will have a new weed control option in 2016 with Warrant Ultra Herbicide, a premix of acetochlor and fomesafen.

Product News

Deltapine NPE Program Begins Eighth Year of On-Farm Variety Evaluation

April 28, 2015

Nearly 200 farmers will be part of the Deltapine New Product Evaluator program this year to help evaluate cotton variety candidates for the Deltapine Class of 16.

Latest News
Market Analysis

Cleveland: “Pickable” Bolls Unlikely from Late Texas Blooms

August 31, 2015

The time has passed to expect any of today’s blooms to make a “pickable” boll on the High Plains. While I hope every single one of them will be picked, do not expect many to make it to the basket.

Market Analysis

Shurley on Cotton: Where Does This Wild Season Go From Here?

August 27, 2015

Cotton’s wild ride continues, thanks to a constant barrage of economic and policy forces.

Market Analysis

Cleveland: Amid Turmoil, Quality Still Drives the Market

August 24, 2015

Cotton had a remarkably positive week, considering its gains in the wake of a global meltdown of commodities and equities.

Market Analysis

Plexus: Market Still Promising, But Keep an Eye on Global Financial Issues

August 21, 2015

Since August 12, the market has gained nearly 600 points, which is impressive considering what is going on in other commodities. But financial problems in key emerging markets could dampen demand – and prices.

Market Analysis

Cleveland: Bullish USDA Report Paints Brighter Price Outlook

August 17, 2015

Market gains of the past week announce another charge at 70 cents, leaving behind a life-of-contract low in December and painting a rosier price outlook for the out months.

Promotion

Cotton Board Recommends $76 Million for 2016 Research and Promotion

August 14, 2015

The Cotton Board has voted to recommend $76 million to fund the cotton industry’s Research and Promotion Program for 2016.

Market Analysis

Shurley on Cotton: On the Ropes, But Trying to Hold On

August 12, 2015

The past few weeks have not been kind to cotton. But new USDA crop reports may act like the referee stepping in to stop the damage just in time.

Market Analysis

Cleveland: Prices Seek New Floor Ahead of USDA Reports

August 10, 2015

We had long held that the 62 to 63 cent support would hold, but the market corrected us once again.

Market Analysis

Dog Days of August Keep Market on a Lazy Pace

July 31, 2015

In the absence of a weather event in the near turn, the dog days of August will keep this low volatility market backing and filling at a very slow pace.

Market Analysis

Cleveland: Market Movement Still Stuck in the Mud

July 24, 2015

It looks as if the cotton market is frozen in time, and some teeth may have to be pulled in order to get the market moving again.

Market Analysis

Shurley on Cotton: The Path to 70 Cents Is Still Negotiable, but Rocky

July 24, 2015

The goal of 70 cents is still possible, but each passing day likely lowers the odds that we can get there. We just need to make sure we know what our alternatives are and act accordingly.

Market Analysis

Shurley on Cotton: Prices Tracking Back Down the Same Row

July 13, 2015

If cotton prices were a piece of heavy farm machinery, the market would have a serious compaction problem, tracking over the same ground time after time after time.

Market Analysis

July Supply Demand Report Proves to Be a Bear in Bull’s Clothing

July 13, 2015

The release of USDA’s July supply demand report quickly turned a big bull report day into a date with the big bear.

Market Analysis

Shurley On Cotton: A New Floor for Planted Acres

July 2, 2015

  By Dr. Don Shurley The long-awaited and much anticipated first estimates of actual crop acres planted for 2015 are

Market Analysis

Will Spring Rains Offer Price Relief in 2015?

July 2, 2015

Will this year’s decline in planted acres offer some price release sometime soon? That’s the question waiting for an answer.