Good soil moisture levels amid a wet La-Nina dominated summer have created confidence among farmers with one of Australia’s biggest dryland cotton crops now in the ground.
Among the summer cropping options, dryland cotton offered one of the best returns with global markets currently offering the most generous prices in ten years.
Favourable – albeit unseasonal – conditions have pushed the production of cotton further south than usual with growers planting in regions including the Lachlan Valley. While Hillston’s average annual rainfall is around 370mm per year, it received almost twice that in 2021, creating a strong base for summer cropping options.
“This dryland plant has been boosted by some good falls over late summer and again in the last week so it looks good, and the cool finish has been ideal to finish those late bolls,” said Jorian Millyard, the NSW extension and development manager for Cotton Seed Distributors.
“We had two planting windows this summer, there was the early planted dryland cotton in October and then there was an opportunity to double crop out of a winter crop in December,” he added.
According to ABARES, Australia will produce 5.2 million bales of cotton, an almost tenfold increase on the drought-affected 2019-20 crop which yielded just 590,000 bales.
The popularity of cotton cropping along with favourable market conditions are set to boost the value of production by 157 per cent to $4.3 billion in the next financial year. The value of Australian exported cotton is set to rise by an eye-watering 400 per cent to $3.4 billion in 2021-2022 and $4.1 billion in the following period.
While international production of cotton is also up – climbing by 8 per cent to 27 million tonnes – supply chain disruptions are stifling exports from the United States, the world’s largest exporter of cotton.
Another price influencing factor is the prolonged drought in the States, with many traditional cotton-growing regions experiencing dryer than usual conditions in the lead up to 2021 planting. North-West Texas – which grows around 40% of America’s national yield – has experienced significantly low rainfall this year and with crops due to be sown between now and June, analysts are uncertain about the 2022 yield potential.
Increased demand on global stocks is also being driven by China, with a rise in cotton-based products being led by consumers spending more time at home among COVID lockdowns and travel restrictions.
Taking advantage of the swing in the market, the Australian Government has awarded a $1.5 million grant to develop trade relationships with south-east Asian countries.
The funding, awarded to the Australian Cotton Shippers Association and Cotton Australia, will be used to host delegates from growth markets including Vietnam, Indonesia, Turkey, India, Pakistan and Bangladesh.
Cotton Australia CEO Adam Kay said that the grant would allow the industry to capitalise on strong prices and strong predicted yields.
“We’re forecasting a large crop of 4.8 million bales in 2022, compared to an average of 3 million bales produced every year during the period from 2014-2019,” Mr Kay said. “This grant will help increase demand for the sustainable high-quality cotton we produce, avoid the need to stockpile and establish a clear roadmap for our future marketing efforts.”