A series of domestic and global developments tied to record-setting U.S. cotton prices over the last year and a half forced the widely respected 84-year-old Calcot marketing cooperative into tight financial times this year.

“Perhaps the most remarkable thing about the 2010-2011 (cotton marketing) season is that we’re still here,” said Jarral Neeper, Calcot president and chief executive officer. “The unprecedented volatility faced over 15 months put a tremendous financial burden on Calcot.”

Neeper shared the co-op’s bumpy ride with cooperative members during the company’s four 2011 annual meetings held this fall in Corpus Christi and El Paso, Texas; Tempe, Ariz.; and Bakersfield, Calif. Calcot is based in Bakersfield.

Neeper said other cotton marketers had faced similar dilemmas but he did not give names.

Calcot is owned and supplied by 1,100 cotton producers in California, Arizona, New Mexico and Texas.

Neeper laid out the roadmap which led to Calcot’s financial challenges.

Last year, U.S. cotton futures catapulted to over a dollar a pound, a level not seen since 1995, and only the second time since the Civil War that the ‘dollar cotton’ target was reached. During the 2010-2011 marketing year, Upland cotton breached the $2 per pound mark while Pima briefly broke the $3 per pound barrier.

“Forget George Washington on the $1 bill — we were looking at Thomas Jefferson on the $2 bill for Upland cotton,” Neeper said during the annual meeting in Tempe. “Pima cotton briefly cracked the $3 per pound level; a price no honest person probably thought they’d ever see.”

The primary reason why cotton prices spiraled was global cotton stocks were lower than demand. The U.S. was in the highly enviable position with available cotton to sell while the rest of the world faced a fiber shortfall.

“The problem was much of the U.S. cotton supply was already sold and committed,” Neeper explained. “After several years of cotton prices barely above loan, prices started to crack the 75-cent and 80-cent levels and growers began to sell in the summer of 2010 thinking prices were profitable and they were.”

The majority of Calcot members in the co-op’s Call Pool sold early; never dreaming prices could reach the promised land of ‘dollar cotton.’

Calcot set records for prices paid in May 2010. Calcot’s final price settlement to growers concluded a total of eight payments for the 2010-2011 crop.