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ARS Home » Research » Publications at this Location » Publication #235412
Title: The Cost of Ginning Cotton - 2007 Survey Results

Author
item Valco, Thomas
item GREEN, J. KELLEY - TX COTTON GINNERS ASSN.
item ISOM, ROGER - CA COTTON GINNERS ASSN.
item FINDLEY, DENNIS - SE COTTON GINNERS ASSN.
item PRICE, TIMOTHY - SOUTHERN COTTON GINNERS A
item ASHLEY, HARRISON - NAT. COTTON GINNERS ASSN.

Submitted to: National Cotton Council Beltwide Cotton Conference
Publication Type: Proceedings
Publication Acceptance Date: 1/7/2009
Publication Date: 5/1/2009
Citation: Valco, T.D., Green, J., Isom, R.A., Findley, D.S., Price, T.L., Ashley, H. 2009. The Cost of Ginning Cotton - 2007 Survey Results. In the Proceedings of the National Cotton Council Beltwide Cotton Conference. January 5-8, 2009, San Antonio, Texas. 2009 CDROM.

Interpretive Summary: The number of gins in the United States continues to decrease and the annual ginning volume decreased slightly from the 2004 Beltwide survey results, due to the reduction in cotton production. The average total variable cost was $21.58 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 annual volume showed that larger volumes help to reduced per bale cost, primarily as a result of reduced labor cost. Typically, larger annual volume yield lower cost per bale, but this incremental decrease becomes smaller at higher annual volumes. Regional cost data revealed that the Mid-South and Southeastern region gins have the lowest per bale cost, while Southwest and West region gins had the highest cost. West region gins reported the highest energy cost per bale in both saw and roller gins. In the Southwest region, where cotton is both picked and stripped, the 2007 survey data showed that additional repair, labor and energy costs contributed to higher total variable cost gins for stripper harvested cotton. NFC harvested cotton resulted in a higher total variable cost than FC harvested cotton, due to increased labor and electrical cost.

Technical Abstract: The 2007 United States cotton crop was 18.7 million running bales, 11 percent below 2006 production. This crop was gathered from 10.2 million acres, which yielded a record high 879 pounds per acre and was ginned with 806 operating gins, averaging over 23,000 bales per gin. There has been a yearly reduction in gin numbers and an upward trend in United States cotton production and average ginning volume. In the past two years there has been a decline in cotton acres, production and average gin volume. The ginning cost survey has been conducted since 1990 to identify variable costs in an attempt to document key cost components of ginning cotton and help ginners make comparisons with other ginning operations in an effort to reduce costs. Cost surveys were mailed to gin managers to identify variable costs that included labor (seasonal and full-time), bagging and ties, repairs and maintenance, drying and electrical costs. Gin managers also reported performance information, which included ginning rate, length of season, number of bales, and type of cotton ginned. Additional information on module tarps and hauling cost information was requested. The average total variable cost was $21.58 per bale, with seasonal labor as the largest single expense item reported. Full-time labor cost was the second largest expense. Cost comparison based on gin annual volume showed that larger volumes help to reduced per bale cost, primarily as a result of reduced labor cost. Regional cost data revealed that the Mid-South and Southeastern region gins have the lowest per bale cost, while the Southwest and West region gins had the highest cost. West region gins reported the highest energy cost per bale.