Crop Tour Day 6

Day 6 – NextGINeration Cotton Gin and Royal Dairy

As we all woke up prepared for an early morning departure, only to find out we didn’t need to be up that early and could get another hour of sleep. As we packed up and left after yet another hotel breakfast, we headed an hour and thirty minutes west to Pratt, Kansas. Upon arrival we were greeted by Casey and David at NextGINeration Cotton Gin. Casey has worked there for 6 years as the office manager and David has been there for 5 years as the manager and has been in the industry since 1978. This cotton gin was purchased by 5 local producers around 7 years ago. The area this gin services is west to Dodge City, as far east as slightly east of Wichita, and as south as Oklahoma. Many of the students were curious about why it is called a cotton gin and it originated from the word ‘engine’. The US cotton industry is around 200 years old and still has a strong future in the country.

Every part of the cotton that is received by the gin is reprocessed and used in some form. As seen in the picture above, there are many stages of cotton during the ginning process. The planting seed, where it can have different fungicide coatings applied to it like one against nematodes, which is why there are different colour coatings as seen in the picture. Cotton planting is typically done around middle of May to June 2, which is the cut-off date for crop insurance coverage. For the seed to germinate, the soil temperature must be at least 62 ºF. It is not planted in April or beginning of May because the soil temperature is too cold at 52 ºF.  There 3 types of cotton, which are stripper cotton, picker cotton and Pima cotton.  Stripper cotton has really short fibres and is extremely strong and commonly used for denim. It is grown in places like Texas, Oklahoma, and Kansas. Picker cotton is grown in south Texas and south Georgia. Pima cotton is an extra-long staple cotton that is of higher quality and is processed differently, commonly used in high dollar clothing items. It requires hot dry weather; therefore, it is grown in California, Arizona, and around El Paso Texas. They created a type of cotton that has the best qualities of the picker and stripper cotton, making the fibres long and strong. The grower has the option to decide whether to pick or strip depending on weather.

Cotton bolls as seen in the picture, can be harvested in two different machines. The first is the picker, which picks the cotton bolls off the plant. A picker can only be used on a stronger plant that is more pliable. A picker creates a cleaner product than a stripper does, and in Kansas only strippers are used because of the high expense of pickers and brittle plants. The second is the stripper, which harvests most of the plant. The stripper collects more trash during the harvest process than a picker and is more desirable when harvesting brittle plants like after a frost occurs.

During the cotton cleaning process, a by-product that is collected are cotton burrs. These are used as cattle feed as they provide 12-13% protein, however not a lot of other nutritional value. The gin then markets this to local dairy and beef farms. Another by-product are the cotton seeds, which are high in oil and protein which is also sold as dairy feed but are more expensive than the cotton burrs. The oilseed can also be crushed at a plant in Texas which is then used in cosmetics as well as for cooking, for example used in Frito-Lay chips. This gin only markets or sells the seed to be used as cattle feed but are in the process of getting the seeds approved for food grade use. The next by-product are motes which are sent to a company that uses it as stuffing for furniture or small cotton products like Q-tips.

This gin processes an average of 35,000 bales of cotton per year, there high is 80,000 bales and their low is 5,000 bales. Most cotton growers send all their harvested bales from their farm to the gin at one time. Around 40 acres is the smallest size field of cotton in Kansas. When the gin receives the round bales from the farmers, they can produce 2.5 to 3 cleaned bales of cotton which are highly compressed and square instead of round. During the entire ginning process, the gin never owns the cotton, they are just providing the service unlike a grain elevator in Canada.

Ginning Process

One round bale from the field, takes about 1 minute and 15 seconds to complete the entire ginning process. The process starts by placing the round bale on a conveyor belt that removes the plastic wrap. This plastic that is removed is baled and shipped to China, as they’re the only ones who will purchase it and “recycle it”. From there, the bale goes toward the spinners with finger like spikes that separates the cotton making it easier to continue through the ginning process. The cotton then falls down and is tested for its moisture content using sensors. Then the cotton gets splits into the split stream system, so that they can work twice as fast.

Next, the cotton goes through the tower dryer to be dried. After the dryer, the cotton goes up to the ‘separator’ where air shoots through it and the lint falls down with gravity. From there, the cotton falls down the ‘incline’ where there are spiked cylinders and bars that picks out the fine leaf trash. The cotton then moves next to the ‘stick machine’ where there are saws that grab the cotton and the larger stick material and any other trash that is missed, hits the bars, and falls out. Next, the cotton moves underground to more dryers to get the moisture level to 5-5.5% (the ideal moisture). It is then scrubbed more by inclines to remove any last missed trash.

The cotton then moves into the ‘gin stand’ where the lint and seed are separated by saws. The lint goes into the lint cleaner to remove any finer leaf trash still in the cotton. The seeds fall through this machine underground to a scale and are then weighed to give a bale seed weight. The picture below is of the ‘gin stand’.

Once through the gin stand the lint, can be re-moisturized back up to around 7% moisture as approved by the US government. By re-adding the moisture back into the bales using steam, it helps to easily pack the cotton into the finished square bales. A completely dry, compressed bale when cut open, has enough force to break a human leg, which is why there is moisture added back to the bales to reduce risk. The bales are then sent through a bale compressor where it is compressed into roughly 480-pound square bales. There are two samples taken from both sides of every single bale that are sent to be tested/graded that are used to track each bale, what farm and field it is from and what gin it was processed at, so that if there is any contamination the government can track where it came from. The finished square bales are wrapped in blue plastic instead of white, because of historically if white plastic somehow got into the cotton, it would be considered a contaminant and the price of the cotton would be discounted $0.40 per bale for the producer, severely impacting their income.

 The US cotton grading system is based off colour, leaf content, staple (length), micronaire (better quality), strength, stick/bark content, plastic content, and uniformity. All of these characteristics of cotton can either increase or decrease the amount the grower receives per bale. The base price of a pound of cotton $0.52, and the grading characteristics determines the premium or discount. For example, if there is any leaf content, the grower is discounted, or if the cotton is whiter, they can receive a premium. There is a loan price of $0.52/lb with the government that producers can receive if they choose not to sell their bales at the current market price, hoping to wait for a better price.

To the right is a picture of the grading sheet used to determine the price of a bale, by determining all of the factors of the bale and figuring out the discounts and premiums, if any.

Cotton is marketed on behalf of the individual growers by the gin, unlike elevators which actually own the commodity and market/sell it for themselves. Some growers choose to market and sell their cotton themselves, instead of using the marketing resources through the gin.  There are 3 main ways to market cotton which are, forward contracts, pool marketing and Seam system. Forward contracts are selling the cotton before it is harvested, this is the most common form of cotton marketing. Casey mentioned that cotton shouldn’t be entered into a forward contract before the crop is visibly producing fruit or else the farmer would have to pay the amount, they entered the contract because there was no crop supplied. Forward contracts are set at 100 bales per contract.

Pool marketing is when several growers combine their crop and sell it together in a pool. This marketing method typically has less risk than forward contracts because the price is typically lower but normally guaranteed. The price received is a combined average of all the selling prices of each bale sold in the pool.          

The Seam marketing system is a bidding service where farmers can offer their cotton to certain customers, and they can choose which entity to sell to. For example, if the price of a bale of cotton is worth $0.50/lb but the farmer thinks they can receive a higher price via bidding, they could put their cotton on Seam for a higher price like $0.84/lb and then sell for the highest price they’re offered.

Casey said that 100% of Kansas produced cotton is shipped overseas. However, there are 3 cotton mills in the US, one of which only makes string, threads, and yarns. This is because processing cotton as a raw input into further products like clothing is very expensive to produce in the USA.

The cotton gin mainly receives their income from sales of cotton seed as cattle feed, as well as the cotton burrs. NextGINeration sells both cotton burrs and some cotton seed to Royal Farms Dairy (our second stop that day)  as feed for their dairy cattle.

As we left NextGINeration we headed to Dodge City for lunch where everyone scattered to find their choice of lunch. There were many sights to see in the area where we stopped for lunch like statues, an old steam train engine, the Boothill museum and some old western style buildings. We then proceeded onto Garden City where we stopped at Royal Farms Dairy for the afternoon.

Today on September 1st after visiting the cotton ginning factory we made our way to Royal Dairy. This farm was a very interesting stop because it was our first livestock farm visit. Two members of this fantastic four blog writing group are more knowledgeable about Canadian dairy farms than the other two. So, to see how dairy farms operate in the USA is very eye opening as these farms are more than 100x the size of the average dairy farm in Ontario in terms of head of cattle being milked. As we drove up to the farm, the corrals could be seen long before we entered farmyard. The owner of this dairy that gave us this tour was Kyle Averhoff, he owns two dairy sites, one of which we visited which milks 6,500 cows and the other which is milking 2,500 cows. Kyle is one of six partners within this operation and is the managing partner. Kyle was born and raised on a pure-bred Holstein dairy farm. Kyle has been operating these two farms for the last 20 years which were both always open lot western style facility which often operates optimally in dry conditions. The milking on this farm goes on for nearly 24 hours a day with only 20-30 minutes for cleaning before the next shift for milking will begin.  

The production this dairy is achieving is also quite impressive as they are averaging 89-90 lbs of butterfat which converts to ~41 kgs of butterfat. This is very good production especially given the environmental and temperature sways these animals endure over the year as summers can get as high as 110ºF in the summer and -45ºF in the winter. These dairy cows are also producing milk at an average of 4.0% fat and 3.0% protein, max fat production is 4.4% in the colder months. The average somatic cell count at the time we visited this farm was around 220 which would give a Canadian dairy farmer a warning level, however their yearly average is 140, which would be an acceptable reading. Another major difference of this dairy farm compared to a Canadian farm would be that they do not have the steady milk prices provided by the quota system and supply management. Despite this, Kyle did not see this as a negative thing but rather saw his market and method of farming as a challenge to conquer and be as efficient as possible. The current milk price that Kyle is receiving for his milk is $15/hundredweight which works out to approximately $0.45/kg. To contrast this price to the Canadian dairy market, a Canadian dairy farm can receive $0.80/kg for their milk, which is a part of the reason why the dairy industry is so different between the USA and Canada, among many other things like the climate and housing establishments. Since the environment can be more stressful for these animals the longevity of these animals is only approximately 2.5 lactations per cow which relates to a 40% herd rotation in one year. This farm milks in a double 60 parallel parlour.  

When breeding these animals, the older animals all get bred with semen and the younger animals all get sexed semen, which will guarantee more female replacements from the youngest animals which Averhoff believes is where the best of his genetics are. The reproduction on the farm is achieving a 29-32% pregnancy rate of all the animals that are getting bred, which on a heavy day can be 200-300 cows in one day. When these animals are being bred, Averhoff is breeding for general production traits such as maintaining teat length, feet, and legs. By the time cows are ready to calve, the operation will calve out 800 calves per month and they will go to a custom calf rearing operation. Any animals that are not pregnant at first service will receive up to 6-7 services before being sold as an open heifer for around $1800 USD. During the colder months, Kyle talked about how the best production is during the months of December to January.  

Kyle described that the pens outside were built like a clock. There are ten to twelve pens located outside. The shades run North to South, and the shade rotates throughout the day with the sun. They operate a closed herd, so they limit the risk of biosecurity. With having a big operation, Royal Dairy sometimes runs into problems with activists such as PETA. Kyle mentioned that over the past few weeks they have been dealing with drones flying over their farm and spooking the cows. In the United States, it is against the law to shoot down a drone.

They have two feeding mixers to feed the cows each day. The cows are fed cotton seed that’s stored under tarps, triticale stored in silos, sodium bicarb, corn silage and liquid minerals. These piles where the feed is stored are 23-25 feet tall. The farm has run-off water in a pond that is used for irrigation. They use water to cool the milk, then it’s used to wash the parlour, and then is recaptured and used for irrigation. This water gets used flushed and reused three times until it is no longer useable. 

Once a cow calves on the farm, that calf is given one and a half gallons of colostrum within the first hour and a half of birth. After twelve hours, the calf receives a half gallon of colostrum. The calve is typically kept with its mother until the calf is dry and standing, or until the cow has lost its placenta. Their calves are fed twice a day at the custom calf rearing operation, receiving no more than six litres a day. They are then weaned around 70-80 days. The calves are then returned to the farm at four months old and they are put within the herd.  

With having to milk 6,500 cows, it requires a lot of help. Royal dairy has around one-hundred employees. Most employees who work there are Latino, with 85-95% of them being either Mexican or Guatemalan. Most of their employees do need to find their own housing, typically they live in Garden City which is fifteen miles from the farm. The foreign employees work here either on a green card or are permanent residents. The employees receive paid vacation (around 25 days per year) and receive health care insurance. With having so many foreign workers, a language barrier can be difficult to communicate, Kyle and most of his employees all speak both English and Spanish to decrease that barrier.

Once we finished chatting with Kyle after the tour of his dairy farm, all 38 of us and lots of flies to spare loaded onto the bus. We then headed towards our hotel but made a pit stop at Crazy House, which is a large western store, where many of the guys went on a nice shopping spree. Once we arrived at the hotel, many folks headed over to Golden Corral for a buffet dinner before finishing the day off with a night in the hotel pool. Successful day!