In many parts of the Cotton Belt, high corn and soybean prices have changed the landscape, often reducing cotton acres and forcing some gins to skip a season, or in some cases, go out of business completely. Therefore, many producers are looking for new gins, and the gins still in operation are looking for new customers. The question remains, how far can a gin retrieve modules and still maintain a reasonable ginning cost per bale? Luckily, engineers at Texas A&M have been considering this question for the last few years and have focused a more comprehensive ginning decision aid to answer this specific question.
The decision aid uses the concept of “percent utilization” (%U) to balance the tradeoff between hauling costs and running the gin at or above capacity. There are fixed costs with gin such as permanent staff, taxes, and capital investments that exist if the gin runs or not. The more bales that can be processed, the more those fixed costs can be spread out. The model can help a ginner evaluate scenarios to determine when traveling farther to retrieve bales may actually reduce per bale costs. Many of the parameters of the model are based on actual ginning data collected by the USDA and the ginning industry (Valco et al., 2005), so there is more than just theory involved in the analysis.
There are only four pieces of information to use the Excel-based decision aid: 1) rated gin capacity in bales per hour; 2) average number of bales per module; 3) estimated number of bales within different ranges from the gin (1-way); and 4) module truck fuel cost. It is important to note the data behind the model does not include gins operating below 70% utilization, so the decision aid cannot be trusted under those conditions.
In addition to funding from the Texas State Support Committee of Cotton Incorporated, this work has also been supported by the Cotton Foundation, Texas Food and Fibers Research Council, Texas Department of Agriculture, Texas AgriLife Research, and the Texas A&M University Cotton Chair.
For more of the technical details on this model, see the following publications: