FROM THE 106th ANNUAL CONVENTION:

National Cottonseed Products Association, Inc.

 President’s Address

Gail Kring

May 6, 2002

 Weathering the Storm

     At every convention I’ve been to, the President gets to give an address.  The year before when your elected Vice President or President elect, you don’t say much, but when you get to be President, it is your one opportunity to expound in some area of your choosing.  Then after that, depending on how your peers accept or reject your remarks, you may never be elected to anything again.  Giving the President’s annual address reminds me of the mosquito at a nudist camp.  I know what I want to do; I just don’t know where to begin.

     The winds of change keep building.  Blowing harder.  Hitting more people.  Reshaping all kinds of organizations and altering how they operate.

     Business, government, educational institutions, not-for-profit organizations, the military, you name it.  Change is as far-reaching as it is rapid, cutting across all sectors of the economy.

     Just look at what’s been happening:

• Over 3 million layoffs have occurred in the past five years.

• More that 45% of American companies have reduced their workforce every year since 1990.

• 85% of all U.S. organizations now outsource services once performed in-house.

• Merger and acquisition activity has been rising steadily over the past five years and is currently at its all time high.

• Business failures have topped 400,000 in the first half of the 1900’s and are on track to double those of the last decade.

     Who knows how many organizations expanded rapidly…revamped their product lines…entered new markets…overhauled their systems and procedures…relocated to different facilities…installed new technologies…brought in a new management team…shut down some operations…tried to change their corporate culture…were deregulated…made sweeping budget cuts…or saw a change in ownership?  Everybody lost count.

     Some organizations will ride the winds of change, seizing the opportunity to go far…very fast…and sail past the competition.  Others that are unprepared for the wind’s force, and that mistakenly think their safety comes in bracing themselves against it, will find their rigidity a fatal stance.

     Your organization will be challenged still further by sharp economic swings, new competitive pressures, globalization of the marketplace, and continued reshaping of business and government worldwide.  You can expect new technologies, sociocultural shifts, and regulatory changes.

     But the organizations that refuse to change, or change too slowly, will have even bigger problems.  They won’t survive in the Age of Instability.

     My year as the President of the NCPA has been an interesting one.  It was a year filled with “weathering the storms.”  It was a year for the Oil Mill industry to feel frustrations stemming from events that inflicted economic havoc on our industry.  Our industry has been and probably still is undergoing significant change.  As with other industries and commodities, the cottonseed crushing industry has experienced new forces from without, and consolidation and closers, from within.  Consolidation and closers mean fewer mills crushing and the dairy cow eating more cottonseed than the mills crushing.  At the turn of the century there were 814 operating mills, as late as 1970, there were 105 mills, in 1980 there were 74 mills, and 1992 there were 35 operating mills.  Today 14 mills are operating.

     In 1998 the amount of seed crushed fell below the amount of seed sold as whole cottonseed.  Up until 1998, the crushing industry had always crushed more seed than seed sold as whole seed.  This year there will be 4.2 million tons of seed sold for whole seed, and 2.9 million tons of seed crushed.  This follows with the number of mills operating in the U.S. today.

     A year ago in Santa Fe the NCPA Board was looking how the NCPA could weather the storm.  With the Oil Mill Industry rapidly reducing the number of operating mills, and the increasing use of cottonseed for dairy feed, our organization was facing a financial crisis.  We were continually digging into our reserves, which the NCPA had so diligently put aside for rainy days, and knew that we couldn’t continue down that path.

     Your board prior to the Santa Fe meeting appointed a study committee to reorganize the NCPA.  At a Board meeting in Little Rock, Arkansas on July 30, 2001, the NCPA was reorganized.  The goals were to more efficiently meet the needs and objectives of the members and operate within a specific budget.  The staff of three full time male employees, two full time females and one part time female was reduced to two full-time employees.  It was the Board’s objective, to have these two full-time employees, provides the same level of professional service its members have come to expect.  So on August 2, 2001, the Board announced the appointment of Ben Morgan to the position of Executive Vice President and Sandi Stine became the Association’s Treasurer.  The NCPA has battened down the hatches to weather this storm.  I for one have really been pleased with the work of Ben and Sandi.  We have not missed a beat with the organization since the management change, and Ben and Sandi have taken care of business as usual.  Also we have put the finances back in the black, which should insure the longevity of the NCPA.

     Some of our functions have been scaled back, like research.  The Board is still interested in supporting innovation, processing efficiencies, and technology advances when the opportunity presents itself.  In the area of promotion, the NCPA’s new “strategic alliance” with Cotton Council International will continue our export promotion for cottonseed meal and oil into Mexico.  Last year, 15% of oil exports and 90% of meal exports went to Mexico.  The Food Protein R& D Center at Texas A & M has offered to become the repository for the bulk of NCPA’s research archives.  So the “New” NCPA is still evolving and will continue to do so in the future.

     After a storm passes, the weather usually becomes sunny and clear.  Are changes finished in our industry?  No, but I do believe better things are ahead.  We now nave a farm bill in place, maybe not what we all wanted, but a bill we can live with.  Statistics predict that all things cycle, and certainly we have been on the dry side of the weather, strong dollar, Instability in the markets, and low commodity prices.  I do believe things will begin to improve for our industry.

     So lets not get caught up in the talk of gloom and doom for our industry.  Being anxious or worrying never solves anything.  Worry is a deceitful distortion.  “Today is the tomorrow that you worried about yesterday.”  “Yesterday is gone….tomorrow never comes.”  Worry never robs tomorrow of its sorrow…it only saps today of its strength.”  The greatest antidote for worry is action.  For example:  during the night, there’s a weather change from balmy evening to unusually cool.  Don’t lie there worrying that you might catch cold.  Get up and get some cover.  Change the things you can change.  Nothing is closer to the truth than this quote: “Lord, help me to change the things I need to change, accept the things I cannot change, and the wisdom to know the difference.”

     We have the heritage of a great industry, the Cottonseed Oil Mill industry.  We also have the heritage of a great association, the NCPA.  Lets be proud, realize we are weathering the storms.  We may form partnerships in the future that would seem strange years ago, but those who are will to adapt and change, will do what they need to do to survive.

     I want to thank each of you for allowing me to serve as your president this year; it has been an enjoyable experience.