2016 Australian Cotton Comparative Analysis Released
2 June 2017
The 2016 Australian Cotton Comparative Analysis report has been recently published and is available to download here.
The analysis is conducted annually by Boyce Chartered Accountants, the largest regionally based accounting firm in Australia, in conjunction with the Cotton Research and Development Corporation (CRDC).
The 2016 analysis is the twelfth report to be produced by Boyce and CRDC. From 1986 to 2004 the report was published independently by Boyce.
The aim of the study is to collect and critically analyse data that will assist the industry to grow and develop sustainably through a focus on best practice techniques. The study is regarded by the cotton industry as the benchmark for the economics of cotton growing in Australia.
The 2016 report reveals that the average group achieved a profit per hectare of $1,706, being slightly lower than $1,899 in 2015, however much greater than the five year average of $1,106.
It was an excellent season for growers in the top 20% group, with a profit of $3,159 per hectare compared to the five year average of around $2,272.
The 2016 report is based on sample figures from participants who produced just on 340,000 bales, which is approximately 12% of the total Australian cotton production.
The average hectares planted per participant decreased from 926 hectares in 2015 to 878 hectares in 2016.
Report co-author Paul Fisher, a director of Boyce Moree, noted that ‘the declining Terms of Trade continues for the industry and for agriculture as a whole. The increasing price of inputs, no real growth in lint price and increasing volume of outputs (bales/ha) is continuing to play out in the cotton industry”.
“Growers are continuing to adopt technology at a rapid pace. Trimming labour costs and maximizing efficiencies are high on most cotton growers’ agenda”.
In 2016, the cost of production for the top 20% of growers was $286 per bale, $62 lower than that achieved by the average growers.
Mr Fisher says that the focus for growers wishing to increase their profitability should be on increasing yield as cheaply as possible.
“While the 2015 and 2016 profits per hectare have been the most profitable in the history of the analysis, 2016 profits were down slightly on the 2015 results.”
Boyce and CRDC encourage all growers to consider participating in the benchmarking study. We believe this would greatly enhance understanding of the key drivers that consistently define the top cotton producers in Australia.
The 2016 Australian Cotton Comparative Analysis can be downloaded here or to view the summary of the ACCA download here. For more about the report or how to participate in the 2017 study, contact your local Boyce office.