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Farm financial performance - Victoria

​​​​​​​​​​​​​​​​Estimates of financial performance are available for all broadacre, beef, sheep, grains, dairy and vegetable farms in Victoria.

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In 2014–15 and 2015–16 farm cash incomes for Victorian broadacre grain farms were reduced as a result of low winter grain, oilseed and pulse yields due to prolonged dry seasonal conditions, particularly in the Wimmera region.

In 2016–17 a large increase in production of wheat and barley due to record yields, together with increased production of pulse crops, is expected to more than offset lower wheat and barley prices and result in crop receipts increasing by over 60 per cent compared with 2015–16. Reduced turn-off of beef cattle in 2016–17 is estimated to have resulted in a small reduction in receipts from beef cattle, despite an increase in beef cattle prices. Overall, much higher crop receipts together with increased receipts from sheep, lambs and wool are expected to result in higher farm cash incomes for broadacre farms in all Victorian regions (Table 2). Average farm cash income for broadacre farms in Victoria is estimated to have increased to $135,000 per farm in 2016–17 (Table 1). If achieved, this would be around 65 per cent above the 10-year average to 2015–16 (Figure 1).

Figure 1 Real farm cash income, broadacre industries, 1996–97 to 2016–17
average per farm

Shows farm cash income for broadacre industry farms in Australia and Victoria from 2001–02 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs. 

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 1 Financial performance, all broadacre industries, Victoria, 2014–15 to 2016–17
average per farm
MeasureUnit2014–152015–16pRSE2016–17y
Total cash receipts$311,610312,700(5)379,000
Total cash costs$213,400232,400(5)245,000
Farm cash income$98,21080,300(10)135,000
Farms with negative farm cash income%1621(20)12
Farm business profit $–16,580–33,100(22)48,000
Profit at full equity
– excluding cap. appreciation$8,790–4,600(169)77,000
– including cap. appreciation$186,010164,500(15)na
Farm capital at 30 June a$3,283,8303,688,200(4)na
Net capital additions$74,6406,100(336)na
Farm debt at 30 June b$290,680339,700(9)356,000
Change in debt – 1 July to 30 June b%106(43)1
Equity at 30 June bc$2,925,8603,094,400(5)na
Equity ratio bd%9190(1)na
Farm liquid assets at 30 June b$155,260145,300(12)na
Farm management deposits (FMDs) at 30 June b$44,98039,300(20)na
Share of farms with FMDs at 30 June b%2220(20)na
Rate of return e
– excluding cap. appreciation%0.3–0.1(171)2.1
– including cap. appreciation%6.14.7(16)na
Off-farm income of owner manager and spouse b$34,88033,900(15)na

a Excludes leased plant and equipment. b Excludes capital appreciation. c Farm capital minus farm debt. d Equity expressed as a percentage of farm capital. e Rate of return to farm capital at 1 July. p Preliminary estimate. y Provisional estimate. RSE Figures in parentheses are standard error expressed as a percentage of the estimate provided. na Not available.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 2 Farm cash income of Victorian broadacre farms, by region, 2014–15 to 2016–17
average per farm
RegionUnit2014–152015–16pRSE2016–17y
221: VIC Mallee$126,86049,800(49)207,000
222: VIC Wimmera$73,7607,500(99)228,000
223: VIC Central North$108,78090,300(17)104,000
231: VIC Southern and Eastern Victoria$96,48099,300(11)112,000

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Shows the ABARES high rainfall zone (eastern seaboard, South Australian south-east coast and south-west coast of Western Australia); wheat–sheep zone (south-east Queensland excluding the coast; central New South Wales, including the North West Slopes and Plains, Central West and Riverina, northern Victoria, South Australian Eyre Peninsula, Murraylands and Yorke Peninsula and Western Australian wheat belt ); and pastoral zone (Northern Territory, northern and central Western Australia, northern and central South Australia, western New South Wales, and northern and western Queensland). The map also shows the ABARES regions within these zones.

Note: Each region is identified by a unique code of three digits. The first digit identifies the state or territory, the second digit identifies the zone and the third digit identifies the region. Source: ABARES

Average farm cash incomes of Victorian beef industry farms increased from $58,500 to $69,400 per farm in 2015–16 (Figure 2). As a result of higher average prices received for beef cattle.

In 2016–17 farm cash income of Victorian beef industry farms is estimated to have decreased to average $61,000 per farm, as farmers reduce beef cattle turn-off and begin to rebuild herd numbers. Receipts from the sale of cattle is expected to decline despite further increases in saleyard prices for beef cattle. Despite the reduction, average farm cash income of Victorian beef industry farms is estimated to be around 64 per cent above the 10–year average to 2015–16 of $37,400 per farm.

Figure 2 Real farm cash income, beef industry, 1996–97 to 2016–17
average per farm
Shows farm cash income for beef industry farms in Australia and Victoria from 2001–02 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs.

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

In 2015–16 farm cash income for sheep industry farms decreased slightly to average $98,200 per farm (Figure 3) as a result of reduced wool production and reduced sales of sheep and lambs.

In 2016–17 farm cash income for Victorian sheep industry farms is estimated to have increased to average $113,000 per farm as a result of higher wool, lamb and sheep prices combined with increased sales. Farm cash income is projected to be around 53 per cent higher than the 10-year average to 2015–16.

Figure 3 Real farm cash income, sheep industry, 1996–97 to 2016–17
average per farm
Shows farm cash income for sheep industry farms in Australia and Victoria from   2001–02 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs.

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm cash income for Victorian grains farms decreased in 2015–16 to an average of $77,600 per farm (Figure 4), mainly as a result of reduced crop production and lower grain prices. Increases in receipts for beef cattle, sheep and wool on mixed enterprise farms were not sufficient to offset lower crop receipts.

In 2016–17average farm cash income for Victorian grains industry farms is estimated to have increased to $213,000 per farm, around 67 per cent above the 10-year average to 2015–16.

Increased winter crop production in 2016–17 as a result of record yields is estimated to have an increased crop receipts and average total farm cash receipts by around 37 per cent, despite reductions in wheat and barley prices.

Total cash costs are projected to increase by around 6 per cent, because of increased expenditure on harvesting and marketing the much larger 2016–17 winter crop and despite reduced expenditure on interest and fodder.

Figure 4 Real farm cash income, grains industry, 1996–97 to 2016–17
average per farm
Shows farm cash income for grains industry farms in Australia and Victoria from   2001–02 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs.

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Average farm cash income of Victorian dairy farms decreased from an average of $152,080 per farm in 2014–15 to $105,400 in 2015–16. The decrease in farm cash income was driven by a decline in average farmgate milk prices.

In 2016–17 farm cash income of Victorian dairy industry farms is estimated to have declined further to an average of $75,000 per farm, around 30 per cent below the 10-year average to 2015–16. This reflects the effects of reduced milk production and lower forecast milk prices. Reductions in total cash receipts is estimated to have been partially offset by lower average cash costs. Lower hay and feed grain prices, favourable seasonal conditions in spring and early summer, increased availability of irrigation water in northern Victoria and reduced dairy cow numbers all contributed to reduced fodder expenditure in 2016–17.

Figure 5 Real farm cash income, dairy industry, 1996–97 to 2016–17
average per farm
Shows farm cash income for dairy industry farms in Australia and Victoria from   2001–02 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs.

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 3 Financial performance, Victorian dairy industry 2014–15 to 2016–17
average per farm
MeasureUnit2014–152015–16pRSE2016–17y
Total cash receipts$729,970692,400(5)618,000
Total cash costs$577,890587,000(6)543,000
Farm cash income$152,080105,400(19)75,000
Farms with negative farm cash income%2418(46)35
Farm business profit $63,820–39,100(80)–74,000
Profit at full equity
– excluding capital appreciation$125,78022,600(128)–18,000
– including capital appreciation$280,830259,400(41)na
Farm capital at 30 June a$3,977,8804,159,800(9)na
Net capital additions$38,670106,300(41)na
Farm debt at 30 June b$817,830879,100(11)835,000
Change in debt – 1 July to 30 June b%38(56)5
Equity at 30 June bc$3,260,7503,341,700(11)na
Equity ratio bd%8079(3)na
Farm liquid assets at 30 June b$196,790175,900(20)na
Farm management deposits (FMDs) at 30 June b$32,05028,800(33)na
Share of farms with FMDs at 30 June b%1721(27)na
Rate of return e
– excluding capital appreciation%3.30.6(132)–0.4
– including capital appreciation%7.56.7(35)na
Off-farm income of owner manager and spouse b$16,92016,700(21)na

a Excludes leased plant and equipment. b Excludes capital appreciation. c Farm capital minus farm debt. d Equity expressed as a percentage of farm capital. e Rate of return to farm capital at 1 July. p Preliminary estimate. y Provisional estimate. RSE Figures in parentheses are standard error expressed as a percentage of the estimate provided. na Not available.
Source: ABARES Australian Dairy Industry Survey

In 2015–16 Victoria had an estimated 490 vegetable-growing farms, accounting for around 21 per cent of Australian vegetable-growing farms. Most farms were located around Melbourne, the Gippsland region and the irrigated regions along the Murray River. The average area of Victorian vegetable-growing farms was around 227 hectares, with 65 hectares planted to vegetables. Vegetable production accounted for 7 per cent of the gross value of agricultural production in Victoria (ABS 2017b).

In 2015–16 average farm cash income for Victorian vegetable-growing farms fell by an estimated 7 per cent to average $374,100 per farm. Total vegetable production per farm increased as a result of an increase in the average area planted to vegetables. Increased vegetable production and higher vegetable prices led to an increase in average total vegetable receipts. Higher receipts from lettuce, carrots, Asian vegetables, broccoli and green beans mainly contributed to an increase in total vegetable receipts. Average total cash costs increased by 39 per cent to $1,779,800 per farm. In 2015–16 the cost of contracts paid and packing materials and charges largely contributed to increased cash costs.

Average farm cash income is projected to increase in 2016–17 by around 24 per cent to $463,000 per farm. Vegetable receipts are projected to increase as a result of higher expected prices despite a slight decline in projected vegetable production due to lower yields. Average total cash costs are also projected to increase by around 8 per cent.

Table 4 Selected physical and financial results, vegetable-growing farms, Victoria, 2015–16 and 2016–17, average per farm

Indicator

2015–16p

RSE

% change from 2014–15

2016–17y

% change from 2015–16

Vegetable cash receipts ($)

1,946,300

(13)

36

2,182,000

12

Area planted to vegetables (hectares)

65

(11)

25

65

0

Quantity of vegetables produced (tonnes)

2,017

(20)

5

1,991

–1

Farm cash income ($)

374,100

(25)

–7

463,000

24

p Preliminary estimate. y Provisional estimate.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate.
Source: ABARES Australian vegetable-growing farms survey

Figure 6 Farm cash income, vegetable-growing farms, 2006–07 to 2016–17, average per farm

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Vegetable Growing Farms Survey

Major financial performance indicators

  • Total cash receipts: total revenues received by the business during the financial year.
  • Total cash costs: payments made by the business for materials and services and for permanent and casual hired labour (excluding owner manager, partner and family labour).
  • Farm cash income: total cash receipts - total cash costs
  • Farm business profit: farm cash income + changes in trading stocks - depreciation - imputed labour costs
  • Profit at full equity: return produced by all the resources used in the business, farm business profit + rent + interest + finance lease payments - depreciation on leased items
  • Rate of return: return to all capital used, profit at full equity * 100 / total opening capital
  • Equity ratio: Farm capital minus farm debt expressed as a percentage of farm capital

Industry types

  • Grains: farms mainly engaged in producing broadacre crops such as wheat, coarse grains, oilseeds and pulses, and including farms running sheep and/or beef cattle in conjunction with substantial broadacre crop activity.
  • Sheep: farms mainly engaged in running sheep.
  • Beef: farms mainly engaged in running beef cattle.
  • Dairy: farms mainly engaged in milk production.
  • Vegetable: farms mainly engaged in growing vegetables.

Farm surveys definitions and methods
Further information about our survey definitions and methods.

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Last reviewed:
27 Nov 2017