2015 Australian Cotton Crop Analysis Released
9 March 2016
The 2015 year was generally an ideal irrigated cotton season in terms of weather. Enough heat, rainfall at ideal times, with low levels of prolonged cloud and cold shock days all contributed to a very kind season for growers, according to the recently published Australian Cotton Comparative Analysis report.
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 2015 analysis is the eleventh 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 2015 report reveals that the average group achieved a profit per hectare of $1,899 being far better than $711 in 2014 and greater than the five year average.
It was a stellar season for growers in the top 20% group, with a profit of $3,388 per hectare compared to the five year average of around $2,190. This result was a combination of a huge jump in yield and a great price.
The 2015 report is based on sample figures from participants who produced just on 340,000 bales, which is approximately 15% of total Australian cotton production.
The average hectares planted per participant decreased from 1,593 hectares in 2014 to 926 hectares in 2015. This is due to water availability and participants in the analysis changing.
Report co-author Paul Fisher, a director of Boyce Moree, noted that yield is the most significant difference between the top producers and the average.
“This increased yield has two impacts; increased income and reduced cost per bale.”
In 2015, the cost of production for the top 20% of growers was $284 per bale, $63 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.
“Long term average figures for the top producers prove that it is possible to achieve a benchmark cost of production in the range of $281 to $326 per bale in a ‘normal’ year.”
Boyce and CRDC encourage all growers to consider participating in the benchmarking study as a way to greatly enhance understanding of the key drivers that consistently define the top cotton producers in Australia.
The 2015 Australian Cotton Comparative Analysis can be downloaded here or to view the summary of the ACCA download here. For more information about the report or how to participate in the 2016 study, contact your local Boyce office.