Farm financial performance – Western Australia

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

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Incomes of Western Australian broadacre farms increased in 2014–15 to an average of $300,100 a farm as a result of higher receipts from livestock and a small reduction in farm cash costs from lower fuel prices and lower interest rates on farm debt. Receipts from sheep, lambs and beef cattle increased as a result of higher average prices received and increased turn-off of beef cattle. Overall, higher livestock receipts offset a reduction in crop receipts as winter crop production declined from the large winter crop produced in 2013–14. Overall, the reduction in crop receipts was small, cushioned by pool payments received in 2014–15 from sale of the large 2013–14 wheat and barley crops.

In 2015–16, decline in wheat and barley yields and lower grain quality driven by variable seasonal conditions is projected to have resulted in a decrease in average broadacre crop receipts, particularly in the Central and South Wheat Belt. On mixed grains-livestock farms, the impact of lower quality grain on farm cash receipts is expected to have been partly offset by increased wool receipts resulting from higher wool prices as well as by pool payments received on grain delivered in 2014–15. In the northern pastoral regions of the Kimberley and the Pilbara, and the South West regions, higher beef cattle prices are projected to have increased farm receipts and raise average farm cash income.

Overall, broadacre farm cash income in Western Australia is projected to have increased to an average of $326,000 a farm in 2015–16. If achieved, this is around 80 per cent above the 10-year average to 2014–15.

Real farm cash income, broadacre industries, 2001–02 to 2015–16, average per farm
Shows farm cash income for broadacre industry farms in Australia and Western Australia 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.

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

Financial performance, Western Australia broadacre industries 2013–14 to 2015–16 average per farm

Performance indicator

2013–14

2014–15p

RSE

2015–16y

Total cash receipts ($)

932,080

952,700

(6)

1,003,000

Total cash costs ($)

657,870

652,600

(7)

676,000

Farm cash income ($)

274,210

300,100

(10)

326,000

Farms with negative farm cash income (%)

21

11

(34)

10

Farm business profit ($)

161,850

126,800

(21)

172,000

Profit at full equity a ($)

250,340

197,500

(14)

243,000

Farm capital at 30 June b ($)

5,329,600

5,595,500

(6)

na

Farm debt at 30 June c ($)

1,011,060

843,000

(12)

876,000

Equity ratio c d (%)

81

84

(2)

na

Rate of return a e (%)

4.8

3.6

(14)

4.3

Off-farm income c f ($)

24,730

25,200

(14)

na

Source: ABARES Australian Agricultural and Grazing Industries Survey
RSE Standard error expressed as a percentage of the estimate provided
p Preliminary estimate
y Provisional estimate
a Excludes capital appreciation
b Excludes leased plant and equipment
c Average per responding farm
d Equity expressed as a percentage of farm capital
e Rate of return to farm capital at 1 July
f Off-farm income of owner manager and spouse
na Not available

Farm cash income of Western Australia broadacre farms, by region, 2014–15 to 2015–16 average per farm

Region

2014–15 p
$

RSE

2015–16 y
$

511: Kimberly

901,000

(26)

1,402,000

512: Pilbara and Southern Rangelands

467,000

(161)

831,000

521: Central and South Wheat Belt

346,000

(10)

288,000

522: North and East Wheat Belt

343,000

(16)

382,000

531: South West

69,000

(19)

119,000

Source: ABARES Australian Agricultural and Grazing Industries Survey
RSE Standard error expressed as a percentage of the estimate provided
p Preliminary estimate
y Provisional estimate

Shows the ABARES high rainfall zone (eastern seaboard, Western 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

In 2014–15, a 24 per cent increase in average beef cattle prices and higher turn-off of beef cattle for both live export and slaughter, particularly from the pastoral regions of the Kimberley and Pilbara, resulted in average farm cash income of Western Australian beef farms increasing from an average of $56,900 a farm in 2013–14 to an average of $186,400 in 2014–15.

Beef cattle turn-off is projected to have increased slightly in 2015–16 and together with a further increase in saleyard prices for beef cattle will result in higher farm receipts, more than offsetting an expected increase in expenditure on purchase of beef cattle. Average farm cash income of Western Australian beef farms is projected to have increased to average $301,000 a farm in 2015–16. If achieved, this would be more than triple the 10-year average to 2014–15 of $82,500.

Real farm cash income, beef industry, 2001–02 to 2015–16, average per farm
Shows farm cash income for beef industry farms in Australia and Western Australia 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.
Note: y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

In 2014–15, higher prices for sheep and lambs combined with increased turn-off resulted in farm cash income of Western Australian sheep industry farms increasing to average $105,700 a farm.

In 2015–16, higher sheep, lamb and wool prices are projected to have resulted in a further increase in farm cash income of sheep industry farms to average $133,000 a farm. This is more than double the 10-year average to 2014–15 of $62,500.

Real farm cash income, grains industry, 2001–02 to 2015–16, average per farm
Shows farm cash income for grains industry farms in Australia and Western Australia 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.
Note: y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Incomes of Western Australian grains farms decreased slightly in 2014–15 to an average of $423,100 a farm as a result of reduced winter crop production compared with the very large 2013–14 crop (second largest on record) and despite a small reduction in total farm cash costs as a result of lower fuel prices and lower interest rates.

In 2015–16, crop receipts are projected to have declined as a result of slightly lower wheat and barley yields and lower grain quality driven by variable seasonal conditions. The impact of lower grain receipts is expected to have been partly offset by pool payments received in 2015–16 for grain delivered in 2014–15 and by increased wool receipts on grains farms with sheep. Overall, average farm cash income of Western Australian grains farms is projected to have decreased slightly to an average of $414,000 a farm. This is still around 62 per cent above the 10–year average to 2014–15 of $256,000 a farm.

Real farm cash income, grains industry, 2001–02 to 2015–16, average per farm
Shows farm cash income for grains industry farms in Australia and Western Australia 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.
Note: y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Average farm cash income of Western Australian dairy farms increased from an average of $161,260 a farm in 2013–14 to $234,900 in 2014–15 as a result of both higher milk prices and higher milk production. Higher milk receipts were augmented by increased receipts from the sale of beef and dairy cattle as average sale prices for cattle increased, but farm cash costs were also higher as expenditure on fodder increased to achieve the increase in milk production.

In 2015–16, farm cash income of Western Australian dairy industry farms is projected to have increased further to an average of $259,000 a farm, around 52 per cent above the 10–year average to 2015–16. This is the result of a further increase in milk production 2015–16, together with increased receipts from the sale of dairy and beef cattle as a result of higher cattle prices. The resulting increase in total farm cash receipts is expected to have more than offset further increases in total farm cash costs.

The increase in the average farm cash income projected for Western Australia in 2015–16, contrasts with the decline projected for other states as a result of lower farm gate milk prices, lower milk production and higher cash costs of production, particularly as a result of drier seasonal conditions in Victoria, Tasmania and South Australia.

Real farm cash income, dairy industry, 2001–02 to 2015–16, average per farm
Shows farm cash income for dairy industry farms in Australia and Western Australia 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.

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

Financial performance, Western Australia dairy industry 2013–14 to 2015–16 average per farm

Performance indicator

2013–14

2014–15 p

RSE

2015–16 y

Total cash receipts ($)

1,085,070

1,258,300

(6)

1,358,000

Total cash costs ($)

923,800

1,023,300

(7)

1,099,000

Farm cash income ($)

161,260

234,900

(10)

259,000

Farms with negative farm cash income (%)

8

4

(20)

5

Farm business profit ($)

70,910

149,400

(20)

107,000

Profit at full equity a ($)

191,820

263,700

(11)

224,000

Farm capital at 30 June b ($)

9,564,860

9,952,600

(11)

na

Farm debt at 30 June c ($)

1,160,880

1,104,300

(14)

1,174,000

Equity ratio c d (%)

88

89

(2)

na

Rate of return a e (%)

2.1

2.7

(15)

2.2

Off-farm income c f ($)

12,290

14,700

(35)

na

Source: ABARES Australian Agricultural and Grazing Industries Survey
RSE Standard error expressed as a percentage of the estimate provided
p Preliminary estimate
y Provisional estimate
a Excludes capital appreciation
b Excludes leased plant and equipment
c Average per responding farm
d Equity expressed as a percentage of farm capital
e Rate of return to farm capital at 1 July
f Off-farm income of owner manager and spouse
na Not available

In 2014–15 an estimated 260 vegetable-growing farms were operating in Western Australia, accounting for around 11 per cent of Australian vegetable-growing farms. Most farms were located along the coast north and south of Perth, around Carnarvon along the Gascoyne River and in the far north of the state in the Ord River irrigation area. The average area of vegetable farms in Western Australia in 2014–15 was around 191 hectares, of which 33 hectares was planted to vegetables. Vegetable production accounted for 4 per cent of the gross value of agricultural production in Western Australia, compared with 6 per cent nationally (ABS 2016).

Estimated average farm cash income declined by 46 per cent in 2015–16 to around $207,000, 21 per cent lower than the estimated average farm cash income (in real terms) for vegetable-growing farms in Western Australia over the nine years to 2014–15. Vegetable receipts declined after lower potato yields resulted in a fall in receipts for potatoes. This was partly offset by increased lettuce receipts.

Selected physical and financial results, Western Australian vegetable-growing farms, 2014–15 and 2015–16, average per farm

Indicator

Units

2014–15p

% change from 2013–14

2015–16y

% change from 2014–15

Vegetable cash receipts

$

1,311,000

(16)

6

1,150,000

–12

Area planted to vegetables

ha

33

(13)

18

33

3

Quantity of vegetables produced

t

1,301

(15)

15

1,285

–1

Farm cash income

$

382,100

(20)

–1

207,000

–46

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

Real farm cash income, vegetable industry 2001–02 to 2014–15, average per farm
Shows farm cash income for vegetable industry farms in Australia and Western Australia from 2005–06 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs.
Note: 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.
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Last reviewed:
04 May 2017