2010/11 Australian Cotton Comparative Analysis

Date Issued:2012-06-30


The 2011 Australian Cotton Comparative Analysis (ACCA) is the seventh report produced by Boyce Chartered Accountants in conjunction with the Cotton Research & Development Corporation (CRDC). Prior to that Boyce had produced the report since 1986.

In this report, we present an analytical review of the 2011 results, a comparison with

prior years and comments on emerging trends. This year was a record year in terms of plantings, bale production and price. After 10 years of general drought, the extent of the wet ironically caused problems, especially in Central Queensland and the Darling Downs. Having said that, it was great to see the industry back to full production.

Yield continues to be ‘king’ in terms of profitability, while extreme weather events seem to have become the norm. The ability to adapt to, and potentially benefit from, extreme weather events is becoming more important. The continuing clear message in this and previous reports has been the required focus on yield as opposed to cost reduction or price enhancement. With increased hectares grown this year, we are seeing a return to more average costings as overheads are once again spread over full hectares. When reviewing the ten year schedules, you need to be aware that in some of the previous years the fixed and semi fixed costs have been allocated over a smaller area due to drought, and this has meant that the costs are higher than a ‘normal year’.

Since the drought started, the industry has been searching for row configurations that make the most efficient use of water. To ensure you get the most out of these figures, it is worthwhile to stress that:

a. in drought years, a grower may not be included in this analysis as they may not have grown a crop

under normal irrigation practices, and

b. the results from different row configurations other than solid have NOT been included in this analysis unless they could be ‘normalised’ to solid configuration equivalent.

For these reasons, care should be taken when using the results from this analysis as an indicator of the profitability of the industry as a whole. Understanding the basis on which the analysis is constructed is the key to getting the most out of this study

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