Months after being harvested, hundreds of bales of high-quality cotton lie waiting for transport in fields across Australia’s top end.
- A large volume of cotton remains in northern Australia, thousands of kilometres from processing facilities
- Increased production and a transport industry worker shortage have contributed to supply chain issues
- Processing is set to begin out of Katherine next year
The farmers who grew the cotton want the bales out of there but face an increasingly long wait for trucks willing and able to freight them 3,500 kilometres to the nearest processing facilities on Australia’s east coast.
It’s a situation grower in the isolated Ord Valley and Katherine growing regions have become familiar with since the resurgence of the cotton industry in the north.
But it has been exacerbated in 2022 due to boosted production and supply chain issues.
Pete Johnson, who runs a brokerage company that works with cotton processors and growers from across Australia, said a variety of factors had made acquiring transport a major challenge for northern cotton farmers this season.
“Access to trucks this year has been a nightmare,” he said.
“At the moment, we’ve got an awful lot of demand looking for freight and not a lot of supply of trucks to move that product.”
While most of Australia’s cotton is produced in New South Wales and Queensland, the industry is growing in the Northern Territory and Western Australia through the use of genetically modified varieties.
A record area was planted in the north this season, with an estimated 2,300 hectares planted to cotton in the Ord Valley and 8,000ha in the Top End.
Mr Johnson expected volumes out of the two regions would be about 50 per cent higher than last year, with an estimated 55,000 modules requiring transport.
“That’s a significant increase, we’re talking about 20,000 more bales,” Mr Johnson said.
“It’s a lot of truck movements.”
Staff shortages faced by the trucking industry have compounded pressure on the northern fleet.
Northern Territory Road Transport Association executive officer Louise Bilato said access to adequately trained staff was an ongoing difficulty, leaving some transport companies unable to operate at full capacity.
“Like every industry, we’re facing massive workforce shortages,” she said.
“Everyone is doing more with less … the road transport industry has really felt it hard.”
The ripple effects of flooding along the east coast have also amplified transport constraints.
Mr Johnson said road access issues were impacting supply chain efficiencies.
He said the start of the east coast grain harvest meant there was high demand for trucks from multiple industries.
“We’ve had challenges getting modules out of fields, challenges just getting stuff to gin, and that’s before you take into account the impacts on grain logistics as well … trucks getting stuck in different spots,” Mr Johnson said.
“It’s been the most difficult season I can remember across the ag commodity sphere, and I’ve been doing this for a long time.”
There are fears profit margins could be squeezed further as the Top End wet season approaches.
Kimberley Agricultural Investment manager Jim Engelke is one of several Ord farmers with cotton modules awaiting transport.
“There is a risk the modules sit out in rain,” he said.
“Clearly that doesn’t do it any good if it gets too wet and you can get some downgrades on the basis of that.”
Local processing is a necessity
There are hopes it could be one of the last seasons that growers deal with transport difficulties, with a Katherine gin on track to be operational next year and funding for a Kununurra cotton gin recently locked in.
The Kimberley Cotton Company this month announced it would push ahead with ordering equipment for the WA’s first cotton processing facility after financing the $50 million project with assistance from the Northern Australia Investment Facility.
Mr Engelke said a Kununurra cotton gin would put an end to the logistical challenges and transport costs hampering the burgeoning industry.
“It definitely takes out that risk of getting it into a facility,” he said.
“We know for sure that we can get the modules into a cotton gin once we get one here … we’re not faced with that freight problem.”