Flexible Pool Options:
Seasonal Pool
Call Pool w/ Option Protection Program
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Combination
Loan Equity Pool
Management makes all marketing decisions: Pricing, CCC Loan, LDP, etc. Initial payment made when bales are delivered at harvest using CCC Loan Schedule.
Progress payments made in February and May with cash settlement/patronage refund in September. Premiums paid based on USDA Schedule.
Seasonal Pool advantages . . .
Member makes all pricing and LDP decisions. Price cotton and lock-in LDP through The Cooperative. Lock-in LDP Rate until Jan. 31st.
A competitive basis is determined each year by The Cooperative. A maintenance margin is maintained for safety. No additional quality discounts are applied. USDA discounts only from CCC loan sheet.
The Option Protection Program works in conjunction with the Call Pool. The member buys puts or calls to set price floors or protect the CCP. No brokerage account is necessary. The cost of options are offset against cotton payments.
Member designates the number of bales to be assigned to the Call Pool option with remaining bales to be marketed in the Seasonal Pool. First bales delivered will be applied to Call Pool before any bales applied to Seasonal Pool. All other rules apply to both pools as stated above.
Cooperative provides loan services and guarantees payments from buyer. Member receives advance of loan with loan schedule premium and discounts. Member makes all pricing decisions.