High volume helps cap costs for declining number of gins

Since 1968, the number of U.S. cotton gins has dropped by almost 77 percent, while the volume of cotton per gin has gone up 686 percent, according to a study by Thomas D. Valco.

As to be expected, he said, gins with the largest volume have the lowest per-bale operating costs — almost $4 per bale difference.

Valco, who is USDA cotton technology and transfer education coordinator at Stoneville, Miss., derived his figures from a survey of Cotton Belt ginners. “Higher capacity helps reduce operating costs,” he said.

“From 1997 to 2001, there wasn't much difference in total variable costs because of increased gin volume, except for slight increases in energy costs.”

Last year, the average of total variable costs for gins responding in his survey was $19.59 per bale. The highest total variable costs were in the Southwest, $22.10, followed by the Far West, $20.23; the Mid-South, $17.72; and the Southeast, $15.61.

Per-bale ginning costs vary between regions, he noted. “Costs in the Far West were up dramatically last year due to the steep increases for electricity; Mid-South and Southeast costs are quite low.”

His survey showed per bale electricity costs of $5.82 in the Far West, $3.68 in the Southwest, $2.35 in the Southeast, and $2.84 in the Mid-South.

In 1968, Valco said, the United States had 4,200 operating cotton gins; last year that number had dropped to 971. The Southwest had the most gins, 330, followed by the Mid-South, 297; the Southeast, 212; and the Far West, 132.

The average bales ginned per facility in 1968 was 2,588; last year it was 20,362. Far West gins responding to the survey had the highest average, 34,810 bales; followed by the Southeast, 33,526; the Mid-South, 29,090; and Southwest, 18,108.

In the Mid-South, responding gins averaged operating 11 weeks during the 2001 season, with an average 23.3 bales per hour ginning rate. Of the crop they ginned, 98 percent was picker cotton, 2 percent stripper.

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