COTTON producers are seeing the largest increase in business cash inflows across all agriculture sectors, according to the July National Australia Bank (NAB) Economics Data Insights: Agriculture report released today.
The report shows business cash inflows for the bank’s agriculture, forestry and fishing customers continue to grow at a rapid pace, underpinned by a large winter crop, strong commodity prices, and more recently, a record-breaking cotton harvest.
NAB executive regional and agribusiness, Julie Rynski, said business cash inflow data to July showed most sectors across most states was well up on 2020 and 2021 levels, with the cotton industry leading the pack.
“Our six-week rolling average closed out July up 27 per cent compared to the same time in 2021,” Ms Rynski said.
“The Australian cotton industry has been the single strongest performer, with a combination of high prices and likely record production delivering huge grower returns, especially in New South Wales.”
Ms Rynski said, as the largest producer of cotton in Australia, it is no surprise that NSW growers saw the greatest jump in cash inflows.
“NSW cotton grower business cash inflows for July 2022 were up 58pc on a year ago and 370pc on two years ago.
“Queensland cotton growing incomes were up 48pc and 158pc respectively.
“With August usually the biggest month for revenue, these results are likely to increase further.”
Positive seasonal outlook
NAB’s data reflects insights from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) latest Australian Crop Report, which estimates total summer crop production in 2021–22 will reach a new record high.
Production of cotton lint in 2021-22 is estimated to reach a new record of 1.3 million tonnes, supported by high yields and a record planted area.
“Seasonal conditions remain first class, reflecting replenished water storages and good dryland performance,” Ms Rynski said.
“The Australian cotton industry has done remarkably well this season and is likely to enjoy another good season from water in storage.
“The positive outlook was very evident at the 2022 Australian Cotton Conference earlier this month where I caught up with many of our customers who are buoyed by the return to favourable seasonal conditions after having come through drought and some tough years.”
Vic, SA on rise
In Victoria, NAB’s grain growing customers are reaping the benefits of record crop production, with business cash inflows for July 2022 up 39pc on a year ago.
Business cash inflows for Victorian grain growers peaked in February 2022 and were 117pc above the February 2021 level.
Business cash inflows for NAB’s beef cattle customers remain high in Western Australia and South Australia, while in Tasmania, business cash inflows for dairy producers have overtaken inflows of beef producers.