To address challenges faced by cotton growers associated with rising production costs, fluctuating yields, and regulatory constraints, Cotton Seed Distributors (CSD) and the Cotton Research and Development Corporation (CRDC) have partnered with Ag Econ through CSD’s Richard Williams Initiative to better understand the key drivers of crop profitability. It is hoped that this initiative has a positive impact on the cotton industry, by giving growers appropriate information for enhancing profitability across a broad range of cotton cropping systems and areas.

The metrics and benchmarks are focussed around key areas of price, yield, efficiencies, and costs. This collaboration between CSD, CRDC, and Ag Econ marks a significant step forward in integrating various – data sources that have been collected across the industry over many years. It acknowledges the vital role of economic factors that affect every day decision making processes related to crop management and investment in crop inputs. It is also envisaged that the information may assist agronomists in understanding the impact of their advice on crop profitability.

Like other studies an overwhelming key finding from the economic analysis was that yield was the primary driver of gross margin, and CSD encourages growers to seek their maximum yield to maximise their gross margin.  However, the analysis also highlighted that understanding the economics of key inputs such as nutrition, water, and insect management were important to maximise yield and all represented the highest costs, have the highest variability, and in many cases demonstrate diminishing margin returns.

It is hoped that the information will support other grower and industry benchmarking activities as providing the economic input into the need for specific research and development investment. Results will be used to update industry gross margins and will be presented at various upcoming industry and CSD engagements.