Reducing discounts in cotton colour to lift profitability: Nuffield Scholar

Grain Central, May 15, 2017

A THIRD-GENERATION Darling Downs farmer and Nuffield Scholar has taken steps to curb the cost of colour downgrades in cotton, which each year strips the industry of millions of dollars in profits.

Matt McVeigh

Matt McVeigh, who was awarded a Nuffield Scholarship in 2015, travelled across 11 nations during his study – India, Qatar, Turkey, Singapore, France, the United States, Mexico, Brazil, Argentina, Vietnam and China – to research the problem and find better ways colour downgrades can be managed.

“Australia’s fibre quality has improved throughout history and it is important that the industry continues to maintain this reputation,” Mr McVeigh said.

“Australia currently receives a premium for cotton that meets all base fibre property levels. This premium is well respected and appreciated by the industry as input costs rise.

“But when Australian cotton colour is below base grade, heavy discount values apply.”

Colour degradation penalties in cotton fibre costs the Australian cotton industry millions of dollars a year through discounts that are applied to cotton that is below base grade.

This occurs when rain falls on the open cotton boll – a factor which is outside of farmers’ control.

Mr McVeigh operates a third generation, 6000-hectare cotton and grain farm near Dalby on Queensland’s Darling Downs, where he grows cotton, sorghum, corn, mung beans and chickpeas using zero-till farming methods.

The stimulus for his Nuffield Scholarship topic came about when he saw how quickly crops could be downgraded due to poor weather conditions and the residue left behind by pests such as the Silverleaf Whitefly and aphids.

His scholarship was supported by Cotton Australia and the Cotton Research and Development Corporation (CRDC).

The work undertaken through his Nuffield Scholarship has led Mr McVeigh to provide some recommendations for cotton growers, and in doing so, has highlighted better communication between industry stakeholders as key to reducing downgrades due to colour.

“Growers would benefit from better communication from cotton gins about the importance of uniform moisture in the module stages. Cotton quality should be the key priority for the cotton gins, and moisture management and drying technology should be utilised if available and not currently used,” he said.

“To help farmers reduce their colour downgrades, using a mini cotton gin can provide feedback on the quality of the crop and allow the grower to make changes if any issues arise.”

Mr McVeigh said to reduce cotton downgrades, each stage of the supply chain must be more open to sharing information about why cotton had been valued at the allocated price.

“Collaboration in the supply chain from the farmer to the spinning mill is encouraged to gain an understanding of the issues faced by each sector,” he said.

“This can also provide valuable feedback as to why downgraded cotton has been allocated the current value.

“Many growers would appreciate the ability to investigate the current Premium and Discount sheet or at least be provided with the rationale behind those values. A graduated system for colour downgrade values would also make this process more equitable and simpler for the cotton industry.

“Colour downgrades are not the sole responsibility of any one stage of the supply chain. Each sector should ensure better management and handling of the fibre and utilise new technology to reduce colour issues where possible.”

Source: Nuffield Australia:


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