A lot has changed since 1981, but Oklahoma cotton gin rates have not.
That's not the case anymore.
The Oklahoma Corporation Commission voted to increase the rate from $2 per hundred weight, to $2.75, and up the ginning, bagging and tying of cotton from $7.50 per bale to $10, according to the Oklahoma Cotton Council's application approved last week.
Oklahoma's cotton gins are regulated as a public utility, similar to electric co-ops or natural gas companies, so the state determines their rates for services.
Council board member David Arthur is general manager for Cotton Growers Cooperative, a gin facility in Altus. In the past decade, he said drought has hit the industry, and the higher rate will help cushion some rough patches.
"By having a slightly higher ginning rate in our good years, if you will, we hope to isolate and minimize some of the losses that we will have in those bad years," Arthur said.
In 2021, Oklahoma's cotton industry was valued at about $284 million, making it the third most valuable crop in the state, according to the Oklahoma State University Cooperative Extension Service.
When the rates were last increased, the industry was different. There were more gins, and transportation was harder.
Then, 79 gins operated in the state. Now, there are fewer than a dozen. Because there are fewer facilities and erratic weather, Arthur said ginning seasons are longer. They now stretch into May, which would have been unheard of in the 1980s, and puts more stress on equipment.
"There are fewer and fewer gins as we go through the years," Arthur said. "They tend to close for various financial reasons, but we are starting to see where freight, especially as fuel prices go up here recently, where it is becoming much more economical to have a gin close to home."
Over the years, the industry has kept pace with technological and other efficiency changes, he said. But in the past decade, it's been tougher to recover from drought.
Since the rough droughts of 2011 and 2012, he said the gins have been playing catch-up.
"Forty-five years is a very long time for price increases in other commodities, other services, other industries and we finally just felt like it was not only were we due, we were maybe overdue," Arthur said.
Because of the uptick in rates, cotton producers will see a higher processing bill. While some producers process their cotton in neighboring states, Arthur said they risk losing certain in-state cooperative protections.
Even with recent rate increases, Oklahoma still costs less than some neighboring states, including at unregulated gins in Texas.
At his cooperative, Arthur said there has been increased demand, while some gin operators are seeing the opposite. Some producers want their cotton processed quickly so they seek out-of-state gins.
"I hesitate to bring this up too loudly, but a longer wait is better than not having the services at all," Arthur said. "And unfortunately, as Mother Nature and climate change, drought conditions tend to persist, there will be fewer of us left to carry the torch."
This report was produced by the Oklahoma Public Media Exchange, a collaboration of public media organizations. Help support collaborative journalism by donating at the link at the top of this webpage.
