The cost of ginning cotton is an important concern for ginners. Past survey data of variable costs showed that labor costs are the largest single expense, followed then by repair and energy costs. Surprisingly, the cost of ginning a bale of cotton has remained relatively constant, albeit all costs associated with ginning cotton have increased.
Three important factors help to maintain this relatively stable cost of ginning. These include increased processing rates, increased annual volume and the incorporation of labor-saving technology.
Cotton has experienced a reduction of acres and production due to reduced demand and prices as compared to other commodities in the past years. Grain has replaced longtime cotton acres in many production regions, and the number of gins and annual volume has reduced dramatically.
In 2009, there were 680 gins that averaged 17,400 bales/gin, as compared to 835 gins averaging 25,147 bales/gin in 2006. More recent cotton price increases should increase planted acres in some areas and hopefully production. However, the competition in some areas for more bales is at a critical point, which may drive further gin consolidation.
Data collected from the 2007 ginning survey showed that ginning costs based on gin annual volume revealed that larger volumes reduced per-bale cost, primarily because of reduced labor cost. The survey data also showed regional differences in variable ginning costs.
The Southwest region, which is primarily stripper harvested cotton, has the highest variable costs. The West has the seconded highest costs, which includes more labor-intensive roller ginning and higher energy costs. The Mid-South and Southeast regions had the lowest total variable ginning costs.
Cotton gin owners and investors considering increasing ginning capacity can use this information on the cost of ginning cotton. In addition, gin managers can use average ginning cost data to compare with their operations and improve efficiency.
The last Beltwide survey was conducted in 2007. In cooperation with the regional cotton ginning associations, plans are underway to collect updated ginning cost information. It is important for our industry to have a clear understanding of the cost of ginning, and we urge you to participate in this important survey.
If you are interested in participating and that will allow you to receive advanced copies of the report, please contact my office for additional information. All individual information will be kept confidential. I look forward to seeing all of you at the Beltwide Cotton Conferences on Jan. 4-7 at the Marriott Marquis hotel in Atlanta. Be sure and attend the ginning conferences for all the latest information and updates on ginning technology. Have a safe trip.
– Thomas D. Valco, USDA Cotton Technology Transfer. For additional information, go to http://msa.ars.usda.gov/gintech. Contact Valco in Stoneville, Miss., at firstname.lastname@example.org via email or call (662) 686-5255. Each month Valco offers timely updates and information in the Cotton Ginners Marketplace section about all facets of cotton ginning.
Jan. 4-7 – Beltwide Cotton Conferences, Atlanta, Ga.
Jan. 12 – PCG Quarterly Board Meeting, Lubbock, Texas.
Jan. 19-22 – Southern-Southeastern Meeting, Savannah, Ga.
Jan. 26 – Ga. Cotton Commission Annual Meeting, Tifton, Ga.
Feb. 4-6 – NCC Annual Meeting, San Antonio, Texas.
Feb. 23 – JCIBPC Annual Meeting, Memphis, Tenn.
Feb. 24 – Southern Ginners Annual Meeting, Memphis, Tenn.
Feb. 25-26 – Mid-South Farm & Gin Show, Memphis, Tenn.
Mar. 16 – Staplcotn Board Meeting, Greenwood, Miss.
March 31-April 1 – TCGA Annual Meeting, Lubbock, Texas.
April 12-13 – ACP Spring Meeting, New Orleans, La.
April 19-21 – Texas Cotton Assoc. Meeting, Austin, Texas.
June 15 – Staplcotn Board Meeting, Greenwood, Miss.
July 10-13 – Southern/Southeastern, Myrtle Beach, S.C.
July 13 – Plains Cotton Growers Meeting, Lubbock, Texas.
Aug. 17-18 – ACP/Cotton Found., Corpus Christi, Texas.
Aug. 24-26 – NCC Board Meeting, Santa Fe, N.M.
Sept. 21 – Staplcotn Annual Meeting, Greenwood, Miss.
Sept. 27 – Calcot Annual Meeting, Corpus Christi, Texas.
Oct. 12 – PCG Quarterly Board Meeting, Lubbock, Texas.
Oct. 19 – PCCA Board and Delegate Meeting, Lubbock, Texas.
Nov. 16 – PCCA Board and Delegate Meeting, Lubbock, Texas.