Economic Models for Cotton Ginning

Zolon M. Looney and Charles A. Wilmot

No 307447, Agricultural Economic Reports from United States Department of Agriculture, Economic Research Service

Abstract: As plant size increases, operating costs per bale decline, revealing economies of scale in ginning throughout the range of gin sizes studied. This and other findings were noted in an analysis of capital investment requirements and operating costs for 10 ginning models ranging in hourly rated capacities from 6 to 36 bales. Seed cotton assembly, traditionally a producer- borne cost, could be an obstacle to the successful establishment and operation of a 36-bale gin--which was determined to be the optimal size--because of the greater hauling distances involved. The analysis shows, however, that with a uniform area ginning charge and other seemingly realistic assumptions, a 36-bale gin could either absorb the assembly cost or take over the assembly function completely and still compete favorably with smaller plants able to furnish only the ginning service.

Keywords: Crop Production/Industries; Production Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 53
Date: 1971-10
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerser:307447

DOI: 10.22004/ag.econ.307447

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