COST OF GINNING COTTON - 2004 SURVEY RESULTS

Authors: Valco, Thomas; GREEN, KELLEY - TX COTTON GINNERS' ASSN.; FINDLEY, DENNIS - SOUTHEASTERN COTTON GINNE; PRICE, TIMOTHY - SOUTHERN COTTON GINNERS; ISOM, ROGER - CA COTTON GINNERS ASSN.

Submitted to: Cotton Gin and Oil Mill Press
Publication Type: Popular Publication
Publication Acceptance Date: 4/21/2006
Publication Date: 5/13/2006
Citation: Valco, T.D., Green, K., Findley, D.S., Price, T.L., Isom, R.A. 2006. Cost of ginning cotton - 2004 survey results. Cotton Gin and Oil Mill Press. pp3-6

Interpretive Summary: While the number of gins in the United States continues to decrease, the annual ginning volume has continued to increase. This increase in average capacity helps to offset rising costs, helping to keep unit cost low as shown by the results of a survey conducted during the 2001 and 2004 ginning season. The average total variable cost was $20.22 per bale, with seasonal labor as the largest single expense item reported in this survey. Full-time labor cost was the second largest expense. Cost comparison based on gin volume showed that larger annual volume reduced per bale cost, primarily as a result of reduced labor cost. It is no surprise that larger gins have lower cost per bale, but this incremental decrease becomes smaller at higher annual volumes. Regional cost data revealed that the Southeastern and Mid-South region gins have the lowest per bale cost, while West and Southwest region gins had the highest cost. West region 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 costs contributed to higher total variable cost for Southwest region gins. This can be associated with ginning stripper harvested cotton, as well as with the wetter than normal season in that region, and with increased machine fatigue associated with over-utilized machinery. Cotton gin owners and investors considering increasing ginning capacity can use this information on the cost of ginning cotton. Also, gin managers can use average ginning cost data to evaluate their operations and improve efficiency. Although volunteered survey data may not be the most accurate data source, it does provide an indicator of the costs and efficiency of gin facilities and management. It is important to acknowledge that each gin plant has a unique design and seasonal operating characteristics that sets it apart from others across the cotton belt. This manuscript presents the average cost figures for selected variables with the understanding that not all costs have been included in this analysis.

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