ABSTRACT
The 1996 Farm Bill provisions allow eligible producers to plant any program crop they select. Therefore, the financial risk of all sectors within the cotton industry will increase substantially because of production and price uncertainties. The economic risks involved will restructure the cotton industry. Cotton gins will face financial problems associated with potential lower volumes and reduced utilization of capital investments. The larger cost efficient gins will have the greatest economic advantage. The result will lead to consolidation of smaller gins and fewer but larger gin operations. Also, the economics of fixed capital suggests longer ginning seasons.
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