A week after the fresh, young Texas A&M University ag econ graduate Tom W. Smith began his first post college job as a cotton marketer in California, he attended his new employer's annual meeting in Mooney Grove, a popular regional park in the heart of the San Joaquin Valley.
There were 5,000 people in the oak-filled Tulare County park, almost five times the number of people who today live in Smith's hometown of Lawn, Texas on the Rolling Plains of West Texas south of Abilene.
Not surprisingly, the turnout made a “big impression” on the Texas cotton farmer's son who had passed up an Army commission to move to California and work for Calcot, at the insistence of Russell Kennedy and Sam Seitz, two men Smith would eventually follow as Calcot's president.
Smith, 67, never expected to be Calcot's chief executive officer when he walked into the cooperative's Bakersfield, Calif., office. He planned only a short California stay.
Forty-five years later on Oct. 1 Smith will walk out of Calcot's office doors, leaving behind sales receipts for millions of bales of California and Arizona cotton produced by thousands of producers and sold to textile mills the world over.
More importantly, however, “TWS,” departs with the admiration of legions who have been associated with him over the past four and a half decades.
Not all agree
Not everyone has agreed with Smith as he championed the causes of cooperative marketing; Western cotton; export marketing and a myriad of other political and philosophical issues he faced in his never-ending mission to profitably market cotton for Calcot members.
Smith is quiet spoken, almost shy. However, his associates and industry leaders have never mistaken his quiet demeanor for a lack of toughness.
“Tom Smith has done a great job representing Western cotton's interest within the context of the entire cotton industry,” said Phil Burnett, former chief executive office of the National Cotton Council.
“However, he never compromised those core issues that were so important to Western agriculture — water, payment limits, environmental issues, trade and export.”
“I have enjoyed the political challenges because I believed very strongly in what I was advocating…and I knew in the back of my mind I had to come home,” said Smith.
“I have seen Tom in difficult situations from time to time. I have never seen him lose his temper,” said Burnett, former president of the Cotton Board and now president of The Seam, a cotton business-to-business on-line exchange.
“I never saw him rattled. He kept pushing yet everyone knows Tom as a man of integrity. Tom is a great industry leader.”
Five federal farm bills have been passed during Smith's Calcot career, and Smith played a key role in each one on behalf of Calcot and Western cotton producers.
Smith will present his final settlement reports to Calcot's members at the cooperative's 75th annual meetings starting Sept. 24 in Visalia, Calif., and continuing on to Yuma and Tempe, Ariz. As he has done many times since he became Calcot's CEO in 1977, Smith will tell the 1,700 Calcot grower members what their final settlement will be on the 2001 crop.
It'll be a speech that growers hang on to for every number, particularly with today's paltry cotton prices. Regardless of what the final settlements may be, Smith will not be satisfied. While justifiably proud of his Calcot career, has always wanted more for Calcot members because he recognizes their livelihood depends on Calcot's marketing efforts.
Those closest to him say he has taken his responsibilities personally.
“I have always recognized that Calcot members and their families relied on their cooperative for their livelihood and when those final settlements were not up to their expectations nor mine, I felt it personally for them,” Smith said.
Success for Smith is measured in profitable sales. Nothing reflects that more than when Smith recalls a career highlight. It happened between midnight and sunup one day in the early 1980s. It was a season the Chinese were in the U.S. market. Chinatex, the national buying arm for the Chinese textile industry, deals only with company CEOs.
“I got a call at home about midnight and the Chinese wanted to buy 50,000 bales of cotton. I knew we had the cotton. I figured the price and it looked good so I sold the cotton,” he recalled.
About two and a half hours later, another call awakened Smith at his Bakersfield home. It was Chinatex again. Another 50,000 bale order. Same price offer. Another sale. Just about daybreak the third call from China awakened Smith. Same quantity. Same price. Same sale. Before the sun had fully peeked over the Tehachapi Mountains in Southern Kern County, Smith had sold 150,000 bales of Calcot cotton.
When the sleep deprived Smith reached Calcot's office that morning, the futures market had opened down the limit. He had sold the cotton to China based on the previous day's market. “I thought I had died and gone to heaven,” laughed Smith.
Low point? “Last year would certainly qualify,” said Smith. Comparatively Calcot's returns were not much different than other marketers for 2000-2001, but “when you have to ask for money back, there is no way you can put a pretty face on it.”
Heiden stood beside Smith as Calcot members learned they had to repay $30 million in over advances due to an unprecedented drop in cotton prices during the year.
“The last two years have been unpleasant for Calcot's members and management,” said Heiden, a Buckeye, Ariz., producer and Calcot's first chairman from Arizona. When Smith steps down, the paybacks will be in, said Heiden and “Calcot will be in great shape when Tom retires.”
“Most people, given the chance, will appreciate what Tom has done for the cotton industry through his career. It is unfortunate that things have happened like they did in these last two years,” said Heiden.
Larry Gallian, long time manager of Visalia Co-op was more blunt. “The last two years hurt Tom worse than anybody — it still hurts him to this day.
“However, I think it is important to recognize he took responsibility for what happened. He did not hide. He attended meeting after meeting talking to growers about the situation,” said Gallian.
“Tom went to all the banks involved to work out a payment arrangement to help growers. He worked hard on behalf of the growers to minimize the impact,” said Gallian. “I guarantee there are a lot of other marketers who would have demanded a check in the mail the minute an overpayment became apparent.”
Over the years, Gallian said Smith has been one of “Western agriculture's biggest assets. He is a pioneer…he is a man of class. What he has done for Western cotton and Calcot's growers over the years should not be judged against one bad year.”
Smith has been a mentor.
“Tom Smith and Calcot are not only leaders in the cotton industry, but have led the way among cooperatives in cotton marketing,” said Blythe, Calif., producer Bob Hull. “Calcot has shown leadership under Tom in guiding the industry over the years. Tom has helped in showing us as Western cotton producers how to act as an industry.”
“Tom is probably the most even-tempered man I have ever met,” said Heiden, who like Smith is former president of the National Cotton Council. Heiden has known Smith for 25 years.
“Even when things were the darkest and toughest, he always remained calm and thoughtful. He is always careful of what he says because he has deep feelings for the people around him,” said Heiden.
“The knowledge I have gained from Tom over the years is unbelievable. He understands all segments of the industry. He sees the big picture much better than most. He would always stick by his guns on the issues that were crucial to the West and yet could always could come back to those who disagreed with him and work with them in other areas.
“I have seen him really verbally abused by other people in the industry, but he has always had the ability to let things like that run off his shoulders like water and move on. He is a really unique person in that respect,” said Heiden.
Jesse Curlee, president of the Supima Association in Phoenix, joined the association in the late 1970s based partly on Tom's advice.
“I had met Tom working in the textile industry early in my career and sought his advice when I was contacted by Supima,” said Curlee. “He encouraged me to move West because he believed Supima was a great opportunity.”
Curlee said Smith is “one of the true leaders of Western cotton. A gentleman who is highly recognized as the person to go to for advice. You can ask Tom a question about anything and will give you a thoughtful, insightful answer,” said Curlee.
‘Hardest working man I know’
Gene Lundquist, Calcot's vice president of grower relations, has worked alongside Smith for more than three decades. “He is the hardest working man I know…besides his family, Calcot has been his life. He is first in the morning and the last to leave each day.
“I know when things have not gone well for Calcot's members, it has affected Tom physically. He really becomes anguished over not doing what he thinks is the best he can do for Calcot members. The last two years have been a strain, but like everything in Tom's career at Calcot, he has faced it with grace and class,” said Lundquist.
“He is very loyal to his employees — always a gentleman,” said Lundquist.
Smith is ready to retire and spend more time with his wife of 44 years, Pat, a former Bakersfield city councilwoman and his two grandchildren. Both Smith children are attorneys.
An occasional tennis player now, Smith said he's going to try golf in retirement now that he'll have a little more time available. He'll also be available as a consultant for Calcot in the transition year ahead.
He'll continue to enjoy the fruits of another California commodity, wine. Not many people from Lawn, Texas, have become wine aficionados. Smith has. However, true to his frugal upbringing on a dryland farm in West Texas, Smith searches for good wine at bargain prices. He enjoys Pinot Noir with salmon and Cabernet Sauvignon with steak. However, he does indulge when it comes to his favorite wine. It's Cabernet from Caymus Vineyards in Napa Valley. “It's my favorite, but it is not a cheap wine — any more.”
The humble Texas farm boy who came to California for a short career stop that lasted 45 years because he met a Bakersfield school teacher with deep roots in California leaves behind a career few can compare with.
When he arrived at Calcot 10 percent of California's was still hand-picked. Now six-row pickers are common in the valley. He has seen a remarkable evolution in field storage and cotton bale packaging.
“The module builder has made a remarkable difference in maintaining cotton quality,” he said.
When Smith arrived at Calcot, half the cooperative's cotton was sold domestically; the rest internationally. Today up to 90 percent of Calcot's cotton is exported annually to textile mills in 50 countries.
He has helped direct the eras of computerization and containerization as well as a grading and classing system second to none in the world.
Calcot was the first American company to sell U.S. cotton to China.
He sold Egyptian desert produced cotton from Arizona and California. It had to be fumigated and shipped in chartered vessels. “Pima cotton from the San Joaquin Valley was the farthest thing on my mind during those days of negotiating to sell cotton to Egypt, although I knew that is was the foundation for the SJV cotton industry during World War I. However, I suspect they would not have treated us as well as they did had they known we would become their major competitor in the ELS world market, he said.
Pima in Valley
Calcot played a key role in ushering Pima cotton into the San Joaquin Valley a decade ago. “Tom was a real supporter of the Supima Association in the San Joaquin Valley. He knew us from selling Arizona and Southern California Pima and gave us a lot of credibility,” said Curlee.
His planned short stay in California was changed when he met wife-to-be Pat Smith, the school teacher daughter and granddaughter of California cotton producers. “When we got married, there was no question where we were going to live,” laughed Smith.
He managed his father-in-law's farm for a while. “I could never convince him to become a Calcot member. The short time I managed the farm, the cotton was sold to Anderson-Clayton.”
His wife entered local politics with more than just Smith's verbal support. He walked precincts for her. “I really enjoyed that…every house was different. I never knew what to expect.
“I knocked on one door and as soon as I did it sounded like four dogs hit the front door. This voice from behind the door said ‘What do you want.’ I told them I had some literature about the city council race.
‘Just drop it on the floor. I don't think you want me to open the door.’ I think I found a crack house,” laughed Smith.
Marketing cotton worldwide is not without its trials either. Smith recalls 1997 when he and several directors were visiting textile mills in Indonesia. They arrived in the middle of a raucous political campaign. The day they were to bus to a mill in the countryside was when the country's No. 2 party was entitled to demonstrate. The Calcot group was warned they might get caught up in the campaign.
“We were told to hold up two fingers and smile to anyone who looked at us. As we traveled out of Jakarta we ran headlong into thousands of people headed into the capital city and our bus was grid locked among a sea of cars. We were stopped in that bus for five hours smiling and hold up two fingers,” he said. “It was a bit frightening.”
During the heydays of Western cotton in the late 1970s early ‘80s, Calcot routinely handled two million bales of cotton annually. One year sales topped $1 billion and were often in the $700 million to $800 million range.
Those days are gone forever, Smith laments. World competition is stiffer now, and there are many more crops competing for land in California. Farmland has become housing tracts in Central Arizona. “We do not have the land capacity to do what we did back then, but I think we'll see cotton acreage rebound in both areas thanks to the new farm bill, provided we can keep payment limits as they are now.”
It has never been easy to get federal farm bills through Congress, especially with the issue of payment limits. However, the industry, he believes, “is up to the challenge. We have gone through this many times before….if you have right on your side you can convince people.”
One of the things that impressed the young Smith on that first day in 1957 was a chalkboard in Calcot's lobby where the receptionist posted cotton futures every 30 minutes. Computers take care of that today and you can bet TWS will continue to track futures to see how Calcot's members are doing long after he walks out the door Oct. 1.
Because he cares. Because it was his life for 45 years.
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