Burgeoning eastern states cotton industry boosts hopes for Ord Irrigation Scheme
New research showing Eastern States cottongrowers’ income is surging has painted a positive picture for Ord farmers hoping to get WA’s first cotton industry off the ground.
A rebound in Australia’s cotton industry has seen business cash inflows of National Australia Bank’s cotton grower customers surge this year on the back of booming production.
The crop was a stand-out performer in this week’s NAB’s Economics Data Insights: Agriculture report, which revealed the eastern states’ industry was recovering after drought.
NAB regional and agribusiness executive Julie Rynski said cotton production was recovering after enduring “some tough years” due to drought conditions.
“Cotton production is recovering off the back of favourable seasonal conditions since last year which have replenished water storages,” Ms Rynski said.
“This is reflected in our customer data, with cotton business inflows in New South Wales now at the highest level since our Economics Data Insights series began in 2015.
“In Queensland, cotton business inflows are at their highest level in three years.
“Cotton prices are expected to remain strong throughout 2021-22, as global economic recovery drives increased retail activity and demand for natural fibres.”
Ord farmers are on the cusp of developing what they hope could be a $268m cotton industry in WA’s Ord Irrigation Scheme after about four years of trials following the release of a new genetically modified cotton variety.
Plans to build the first cotton gin west of Queensland — in Kununurra — received a major boost last week when the industry received a $32 million cash loan from the Northern Australia Infrastructure Facility to build the gin.
The gin is expected to create 30 full-time jobs during construction and 21 jobs during operations.
The news came after the State Government in January announced $4 million to fund power upgrades, design work and approvals for the flagged $40 million cotton gin.
Spearheading the gin proposal is Chinese-owned Kimberley Agricultural Investment, traditional owner group MG Corporation, grower-owned Ord River District Co-operative, and select growers.
Cotton production is recovering off the back of favourable seasonal conditions since last year which have replenished water storages.
The gin is expected to create more than 1000 local jobs and generate $1.19 billion in cotton lint exports in the first 10 years.
Ord farmers want to make cotton a mainstay of their cropping operations because it has high returns, is well-suited to the tropical conditions of WA’s north and gives them the potential to double crop — planting cotton in February and harvesting it in July or August, before putting a different crop in.
While the cotton fibre, or lint, would be exported, the residual cottonseed has value for cattle.
Australian cotton lint production is expected to reach its third-highest level in history this year, nearly equal to 2017-18.
The report showed cash inflows for the bank’s agriculture, forestry and fishing customers were performing strongly.
While cotton is the agricultural income king in New South Wales and Queensland, Ms Rynski said beef continued to “drive business inflows” for customers in other states.
She said the three-month average index of business customer inflows continued to track above grain transaction for farmers in South Australia and WA.
“In Victoria, beef and dairy producer inflows are also high, while in Tasmania, beef production continues to be the key driver of business,” she said.
Ms Rynski said with the Bureau of Meteorology now in La Niña watch, the spring outlook was strong for many agricultural commodities.
Australia’s overall agricultural production is set to hit a record $73 billion in 2021-22, up more than 50 per cent during the past decade.
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