PMCI Helping Producers Stay Competitive

October 2004 -- Innovation is a crucial component of the marketing process at Producers? Marketing Cooperative, Inc. (PMCI). Each year Ronald Pope, PMCI general manager, likes to reinvent the wool marketing process to discover areas that can be improved upon to give their producers an edge in the wool marketplace.

"Our members are very visionary people, they aren?t just satisfied with the status quo," explains Pope.

The members of PMCI developed the cooperative in 1995 due to the phase-out of the wool incentive program. They realized that some type of program needed to be created to help them maintain income from their wool. PMCI started as a wool marketing organization without a warehouse. Agreements were developed with warehouses in the surrounding areas so that the wool could be stored, which allowed PMCI to have only a paper inventory of their wool.

In July 2003, PMCI joined forces with West Texas Wool & Mohair, located in Mertzon, Texas. This agreement enabled PMCI to manage the warehouse operations still owned by West Texas Wool & Mohair.

"This arrangement allows us to be here with the wool," says Pope, who moved the PMCI office from San Angelo, Texas, to Mertzon. "This location helps us interact with our growers more on a regular basis."

Currently, PMCI has 350 producers who make up the framework of the co-op. The members own, fund and control the general operations of the business. Members must sign a marketing agreement with PMCI demonstrating their support of the business?s mission.

"The agreement shows that our members support us with integrity. It is a moral boost to us to have that kind of commitment -- which is unique," Pope says.

PMCI is continually finding new methods to improve the overall return on wool for its producers. One way it does this is to market their wool both domestically and internationally. PMCI conducts the actual transactions with their buyers allowing more money to go into producers? pockets.

"ASI (American Sheep Industry Association) and the Wool Council have been instrumental in getting international buyers here and giving us the opportunity to visit with them face-to-face to show them the wool types we have," Pope says.

Over the past couple of years, PMCI has changed its marketing philosophy in that it is moving away from a single auction sale each spring to marketing wool throughout the year on a more daily basis.

Pope expects to see more of this type of marketing in the future. He says that PMCI will market wool as the opportunity arises and not so much when the wool arrives. This type of thinking allows PMCI to develop forward-contracts with its buyers and give a greater return to the producers.

Another competitive advantage that PMCI has managed to create for its producers is the use of the Optical Fiber Diameter Analyzer 2000 (OFDA2000). The OFDA2000 accurately measures the fiber diameter of greasy wool. PMCI utilizes this instrument during shearing time enabling the wool to be classed correctly in the field. It also uses the OFDA2000 as a genetic selection tool, enabling it to test yearling ewes and bucks to determine wool quality.

Since the purchase of the OFDA2000 by the ASI Wool Council three years ago, Pope says that PMCI is starting to see some real benefits to its wool clip and its assets for their producers.

Last spring, PMCI incorporated another piece of equipment into its operation called the Fleecescan.

"The Fleecescan allows us to test individual fleeces in the warehouse and sort them according to quality (fiber diameter) in an effort to create more markets for our wool," says Pope. "Now with the Fleecescan, we can consistently separate out the wool according to fiber diameter and be assured of the volume we are receiving."

The separation process allows PMCI to market the finer wool at a higher price and also optimizes the loan deficiency payments (LDP) on the wool loan program for its producers.

"Everything we do here hinges on the fact that we want to keep our growers healthy and to do that we need to invest into the future," explains Pope.

Although the warehouse PMCI is housed in was built in the early 1900s, they intend to grow and adapt to the characteristics of the wool industry in the future. PMCI is unable to change the wool market, but it can try to maximize the opportunities for its producers.

Pope says that producers also play a part in this equation in that the wool they produce impacts the quality and overall perception of U.S. wool.

"Our wool does have a value and it?s something you need to pay attention to," says Pope. "I?ve always said that a business that ignores 7 percent to 20 percent of its income will go out of business. We produce sheep and sheep produce wool, so if you are producing it, pay attention to it."

Pope suggests to producers to include wool in the equation of their selection management programs and to properly prepare and package it at shearing time.

Down the road, Pope hopes to see sheep numbers rise along with wool production. Through the co-op and the technology that have been incorporated into the business, he hopes that PMCI can help its producers improve the quality of their wool and positively move into the future.