If you’re refining your budgets for the 2021/22 season, the CottonInfo team can assist with our recent compilation of gross margin scenarios in a range of growing conditions. These budgets have just been updated for the 2021-22 season and can be found on the CottonInfo website here.
Since our last update in 2019-20, the overall cotton gross margin/hectare decreased by between 15% and 30%. Key changes in the gross margins were:
- The gross margins use the 12-month average lint price of $569/bale, which is 5% lower than in the 2019-20 budget. However, with the recent lint cotton price breaking $615/bale for the 2021-22 crop, there is potential upside for growers who have not already locked in a price.
- Cotton seed prices at gin have decreased 30% from $100/bale to $70/bale due to the improved weather conditions and lower stockfeed demand.
- With the combined lint and seed price decreases, income decreased by 8% per hectare.
- At the same time, variable costs increased by between 2% and 8%. This was primarily driven by fertiliser costs, which are the second highest cost and increased by between 23% to 43% across the different gross margins following strong increases in key fertilisers MAP and urea.
Due to increased interest in northern Australia cotton production, the 2021-22 update also includes Northern Australia furrow irrigated and Northern Australia Raingrown gross margin budgets to give an indication of the operations and costs required to grow a cotton crop in the emerging cotton regions in the North (Queensland, Northern Territory and Western Australia). Detailed analysis on these Northern Australia Gross Margin Budgets can be found here.
Please also note that these gross margin budgets have shifted to a biennial update.
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