What is in this article?:
- Gin closings, new technologies and the cotton infrastructure
- Gin closings/technology
- Gin closings/consolidation and new technologies lead to questions about cotton infrastructure.
- LSU AgCenter economist team collecting/analyzing data.
On gin closings…
“Gin closings aren’t a new phenomenon. Gins have been closing for decades – largely a function of increased capacity and efficiency of gins. As older gins are closed, cotton shifts to the remaining gins.
“So, is there a point where ginners say ‘that’s too far’? The results suggest, so far, the answer is no.
“There are costs associated with not utilizing unused capacity. It’s sort of like if you operate an airplane at a quarter of its capacity for a short period of time rather than just grounding the plane. There are fixed costs already invested in the airplane.
“In that sense, gins have a certain amount of fixed costs they’ve invested in recent years. Running more cotton through them helps to spread out that fixed cost over more bales ginned. Those with newer technology, newer gin stands, lint cleaners, dryers, will want to utilize the equipment and run cotton. As a result, they’re willing to travel a bit farther to get that cotton.
“Of course, at some point, if fuel costs increase dramatically, there has to be a discussion about whether the transportation costs become too burdensome. So far, though, that doesn’t appear to be a factor.”
On more findings related to on-board module harvesters…
“Of the gins that responded to the survey, the percent of total bales that came from on-board module harvesters was about 9 percent.
“We asked what percentage they expect to gin in 2011 would come from on-board module harvesters. We made no distinction between round or half-modules. That number was 21 percent. So, in a very short time, they’re expecting to go from under a tenth to over a fifth of their bales to come from on-board module harvesters.
“At least in the short-term, there is still a need for the module trucks. In talking to ginners, for short hauls it makes more sense to use their module trucks to pick up on-board modules. As the distance for pick-ups increase, it may make better economic sense in the future not to send a dedicated module truck out to pick up just a small number of bales. It may make more sense in those cases to put them on a flatbed trailer and haul them to the gin.
“In the future, gins will have to make strategic decisions on what and how much to invest to handle on-board modules. It’s going to be an expense and the reality is – as anyone could see at the latest Mid-South Gin Show in Memphis -- there are a lot of technologies available to break down the bales inside the gin. Further, some of the loading equipment looks kind of like it could handle round bales of hay, others look different.
“It will be interesting to see what equipment becomes preferred in the future. Will a number of these new technologies co-exist?
“As researchers, we must ask these questions. If the trends continue, three or four years from now, we may see 40 or 50 percent of the cotton coming to a gin is from on-board module harvesters.”