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Although forecasts for cotton acreage in 2013 aren’t all that bright, given world stocks and lagging demand, Robert Royal thinks will be enough acreage to run his gin this year. He says he just wants to be able to weather the downturn and still be ready to gin when cotton turns back up.
For Robert Royal, vice president and general manager of Midnight Gin and incoming president of the Southern Cotton Ginners Association, becoming a ginner was something of a baptism under fire.
Robert’s family has been a part of agriculture in the area going back to his great-great grandfather, William Henry Ellis, who grew up in nearby Yazoo City, fought and lost a leg in the Civil War, then came back to the Midnight farm that had been given to him and his wife as a wedding present.
“My grandfather, Dr. Asa Royal Sr., was a veterinarian who later went to work for Delta and Pine Land, helping to look after their mules and other livestock. With the advent of tractors and mechanization, he wasn’t needed there any more, so he and my grandmother took over the farm.
“After his death, my late father, Asa Jr., farmed here for 50-plus years. The farm probably was no more than 100 acres in my great-grandfather’s day, but it has been gradually expanded over the years. I grew up on the farm and worked with my father until I went to college.
“After earning my ag economics degree at Mississippi State University, I went to Chicago and worked for ContiCommodity in the soybean trading pit. When trading began in 10-year Treasury contracts, I spent a year doing that. It later became one of the largest contracts on the Chicago Board of Trade.”
After that, he returned home to Mississippi and, with a partner, started a brokerage business at nearby Belzoni.
“But, I had always wanted to farm, and my father was giving thought to retiring, so he and I farmed together until he retired. I couldn’t have asked for a better mentor.”
That was about the time that farm bill changes gave farmers the freedom to plant what they wanted.
“We had been growing soybeans, and [he laughs] we proved year after year that we couldn’t grow soybeans on our land without irrigation — the last year we had beans, we didn’t even harvest them.
“But it is good cotton ground. The following year, we planted cotton, made 2.5 bales per acre, and the farm has been all cotton ever since. It has been a consistent, reliable crop. Daddy always said, ‘Cotton will pay the bills.’”
Two years ago, he installed a center pivot on some of his marginal rolling land, where landforming would be cost-prohibitive.
“I still have a lot to learn about irrigation timing,” Robert says, “but it is definitely paying for itself in improved yield. I think economies of scale will be the determining factor as to whether I add more irrigation; right now, with the cotton outlook as it is, I have no aggressive plan for additional irrigation.”
Nor, he says, does he expect to buy new pickers. “I’m still using a couple of Case 4-row pickers. They’re tough, and they just keep going.”
His 10-year cotton average is about two bales per acre. The worst year was rain-plagued 2009, with only 650 lbs., “which demonstrated for me the value of crop insurance. My banner year was 2005, just shy of 1,500 lbs. The 2012 crop was a good one, close to 2.5 bales.”
The way things stand with cotton, Robert says, he has no inclination to expand his operation. “If the right acreage in the right location became available, I might consider expansion — but I’m pretty much comfortable with the present size of my operation.”
He still utilizes his experience as a trader to hedge or replace positions as part of his marketing program, but says he is increasingly using options as a pricing mechanism. “I still love to follow the markets — which I can do in real time on my smart phone.”
Robert and his wife, Frances, have two children: Son Elliot is a junior at Mississippi College, pursuing a business degree; his passion is flying, and he is both a commercial pilot and flight instructor. Daughter Laura Ellis is a sophomore at Manchester Academy at Yazoo City.