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Title: THE COST OF GINNING COTTON - 2001 SURVEY RESULTS

Author
item Valco, Thomas
item COLLINS, B. - COOP GINNERS' ASSOC OF OK
item FINDLEY, DENNIS - SE COTTON GINNERS' ASSOC.
item KELLEY, GREEN - TX COTTON GINNERS' ASSOC.
item LEE, TODD - SE COTTON GINNERS' ASSOC.
item ISOM, ROGER - CA COTTON GINNERS' ASSOC.
item WILLCUTT, MICHAEL - MISSISSIPPI STATE UNIVER.

Submitted to: National Cotton Council Beltwide Cotton Conference
Publication Type: Proceedings
Publication Acceptance Date: 1/10/2003
Publication Date: 6/10/2003
Citation: VALCO, T.D., COLLINS, B., FINDLEY, D.S., KELLEY, G., LEE, T., ISOM, R.A., WILLCUTT, M.H. 2003. The Cost of Ginning Cotton - 2001 Survey Results. In the Proceeding of the National Cotton Council Beltwide Cotton Conference. January 6-10, 2003, Nashville, TN. 2003. CDRom

Interpretive Summary: This publication identifies the cost of ginning cotton based on 2001 survey responses from 176 Beltwide gins. Both gin locations and annual capacity are contributing factors in determining cotton ginning cost. Ginners and investors can use this information to help optimize their gin plant.

Technical Abstract: In 2001, 970 operating gins processed the largest United States cotton crop in history, averaging 20,400 bales per gin. This trend toward fewer gins and higher ginning capacity has prompted the need to survey variable costs of cotton ginning. The ginning cost survey resulted in data from 176 ginners that identified production rates and variable ginning costs for the 2001 ginning season. The average variable cost was $19.59 per bale, with seasonal labor the largest single expense reported in this survey. Management cost was the second largest expense. Cost comparisons based on gin volume showed that larger annual volume reduced per bale cost, primarily as a result of reduced labor cost. Regional cost data revealed that Southeastern and Mid-South gins have the lowest per bale cost, while California and Texas had the highest cost. California gins reported the highest energy cost per bale in both saw and roller gins. Texas and Oklahoma, where cotton is both picked and stripped, showed that additional repair and energy cost were associated with ginning stripper harvested cotton. Total ginning cost was calculated using a simplified analysis method. Since every gin has a unique cost structure, a worksheet was developed to assist ginners in this analysis. Based on the average variable cost and reasonable assumptions for gin plant fixed costs, $40.67 total cost per bale was determined. The total cost per bale decreases with higher annual volumes, but this incremental decrease becomes smaller at higher annual volumes.