Australian cotton growers are set to post their largest total crop on record thanks to a near-perfect season in Queensland's south west

The sector is expected to produce about 5.5 million bales worth approximately $3.9 billion, including the production of lint and cotton seed.

Cotton Australia general manager Michael Murray said regions including Dirranbandi and St George in Queensland, as well as the Macquarie Valley and the Gwydir in New South Wales, had seen good yields and good quality.

Mr Murray said the bumper season had renewed confidence in the industry.

"We're seeing investment back into new machinery. Quite a few new pickers were sold this year," he said.

"Not only is it good for people financially, but it's also good for them mentally — it just changes the whole attitude of the industry."

'Near perfect season'

Dirranbandi cotton grower Jamie Deshon said it was the first time since 2012 that he had a full plant, putting in more than 1,000 hectares of cotton.

He said while there had been little rain this year, water storages boosted by recent flooding had allowed farmers to have a great season.

"I think we had six major floods come down the Balonne River and I think everyone in the district started with full water, which is great," Mr Deshon said.

"Yield and quality this year have been great — it's been near the perfect season for it."

The bumper harvest was having a big flow-on effect on regional communities.

Balonne Shire Mayor Samantha O'Toole said local businesses in south-west Queensland were having a "cracklingly busy" period.

"I'm hearing great feedback from some of the food outlets just about the extra meals and takeaways," she said.

No rain and water buybacks could affect next crop

But good times do not last forever with Councillor O'Toole expecting a reduction in next year's cotton crop due to a lack of rain so far this year.

"But I think most people are carrying forward some water for next season, so we should have a reasonable amount of cotton going in again next year," she said.

She said the federal government's voluntary buyback of water entitlements in the Murray-Darling Basin could also potentially affect next season's cotton crop.

The voluntary tender process to buy back more than 49 gigalitres of water across six catchment areas, including the Condamine-Balonne system, ended last week.

"Every gigalitre that's recovered from the system reduces the food and fibre that's grown," Councillor O'Toole said.

"We hope the government takes into consideration the socio-economic impact of water recovery when they do the water purchasing."

Strong prices

Cotton Australia said demand for the commodity remained strong, with bales going for $600 to $650 a bale.

Mr Murray said South-East Asia was still a strong customer for Australian cotton even though the industry had yet to see a pick-up in demand from China.

"The biggest single country is Vietnam; it's running at around 30 to 40 per cent of the market this year," he said.

"Türkiye has been buying a little bit of cotton over the past couple of seasons.

"What we have seen is a lot more diversity of our market compared to say six, seven years ago where it was absolutely dominated by China."