Step One in Developing a Cotton Marketing Plan:
Figure Your Farm's Per Unit Costs of Production
In order to plan how to price your cotton, you have to have
an accurate and complete estimate of your expected cotton production
costs (in dollars per pound of yield). Obviously, your expected
costs and yields may differ from what actually turns out, but
for planning purposes you still need a good working estimate.
The best source of both cost and yield information is from
your own records, averaged across five to ten years of history.
In Texas, there are a number of resources that can assist
you in identifying and organizing your cost information so
that it is as accurate and complete as possible.
Agricultural economists with Texas Cooperative Extension publish
planning budgets like the one displayed to the left. These
are useful to identify the kinds of costs you should be keeping
records of. You can find Extension Budgets for your area at http://agecoext.tamu.edu/?id=964 .
You can work with the Texas A&M's FARM
Assistance program to create a customized strategic plan
for your farming operation that includes cost of production
projections based on your own records.
Texas A&M's Agriculture and Food Policy Center periodically
publishes cost and financial information from representative
cotton farming operations in Texas. Their reports can be found
at http://www.afpc.tamu.edu/pubs/ .
Texas Tech's Cotton Economics Research Institute has several
on-line cotton cost calculators. you can enter information
about your production and harvest operations, and have them
calculate per acre cost estimates. These tools can be accessed
by going to this site: http://www.aeco.ttu.edu/CER-Institute/Resourcepage.htm
Plains Cotton Growers, Inc. has a collection of 2004-2005
seed cost data to let you compare/confirm/budget for seed costs
(a major expense). This information can be accessed at http://www.plainscotton.org/Seed/seedindex.html.
Lastly, USDA's Economic Research Service conducts nationwide
surveys of farmers, and publishes costs of production estimates
based on those surveys. This information is available on-line
at http://www.ers.usda.gov/data/costsandreturns/ .