CRDC and Boyce Chartered Accountants have released the 2015 Cotton Comparative Analysis report, which shows that although 2015 was a smaller season in terms of hectares grown, it was a stellar season for yield and price.
The analysis, conducted annually by Boyce in conjunction with CRDC, provides a benchmark for the economics of growing cotton in Australia. The 2015 report is based on figures from growers who produced 340,000 bales, or 15 percent of total cotton production.
The study found that 2015 was generally an ideal irrigated cotton season in terms of weather, with enough heat, rainfall at ideal times, and low levels of prolonged cloud and cold shock days all contributing to a good season for growers.
And, as a result, the report reveals that the average group of cotton growers achieved a profit per hectare of $1,899 – greater than both the 2014 result of $711, and the five year average.
The top 20 percent of growers had an outstanding season, with a profit of $3,388 per hectare, against the five year average of $2,190.
Report co-author Paul Fisher, of Boyce Moree, noted that yield was the distinguishing factor between the two groups.
“Increased yield has two impacts; increased income and reduced cost per bale. In 2015, the cost of production for the top 20 percent of growers was $284 per bale, $63 lower than that achieved by the average growers,” Paul said.
“As such, 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.”
The 2015 Australian Cotton Comparative Analysis is available to download here. For further information, or to participate in the 2016 study, contact your local Boyce office.