Farm financial performance – Western Australia

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

[expand all]

In 2015–16 a decline in wheat and barley yields and lower grain prices, partly due to lower grain quality, resulted in a decrease in average broadacre receipts in Western Australia and a small decline in average broadacre farm cash income (Figure 1). The impact of lower grain receipts on average broadacre farm cash income was partly offset by increased beef cattle and wool receipts resulting from higher beef cattle and wool prices in 2015–16.

In 2016–17 lower prices for wheat and barley are estimated to have largely offset the effect of record wheat and canola production on average crop receipts. Pool payments received in 2016–17 for grain delivered in 2015–16 also helped to offset the decrease in wheat and barley receipts. As a result, only a small decrease in average broadacre crop receipts is expected. In the east of the Central and South Wheat Belt, frost in spring reduced grain yields and farm receipts.

Receipts from beef cattle, sheep and lambs are estimated to have increased as a result of higher cattle, sheep and wool prices. This is expected to result in higher farm cash incomes for farms with livestock, including mixed livestock–crops farms.

In the Kimberley region, higher beef cattle prices are estimated to have increased farm receipts and average farm cash income. In the Pilbara and Southern Rangelands, higher beef cattle turn-off in addition to higher cattle prices is estimated to have resulted in higher average farm cash income (Table 2).

Overall, broadacre farm cash income in Western Australia is estimated to have increased from an average of $312,700 per farm in 2015–16 to $340,000 per farm in 2016–17. If achieved, this would be around 90 per cent above the 10-year average to 2015–16.

Figure 1 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.
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 1 Financial performance, all broadacre industries, Western Australia, 2014–15 to 2016–17
average per farm
MeasureUnit2014–152015–16pRSE2016–17y
Total cash receipts$1,027,4001,038,100(5)1,088,000
Total cash costs$709,920725,400(6)747,000
Farm cash income$317,490312,700(9)340,000
Farms with negative farm cash income%116(40)11
Farm business profit $137,530168,000(17)165,000
Profit at full equity
– excluding cap. appreciation$216,120247,700(13)241,000
– including cap. appreciation$262,360344,900(11)na
Farm capital at 30 June a$6,075,8106,347,700(4)na
Net capital additions$171,740120,800(40)na
Farm debt at 30 June b$945,6401,027,000(10)1,013,000
Change in debt – 1 July to 30 June b%25(43)0
Equity at 30 June bc$4,855,8005,030,800(5)na
Equity ratio bd%8483(2)na
Farm liquid assets at 30 June b$271,930241,500(17)na
Farm management deposits (FMDs) at 30 June b$99,23096,900(19)na
Share of farms with FMDs at 30 June b%3529(15)na
Rate of return e
– excluding cap. appreciation%3.74.1(12)3.9
– including cap. appreciation%4.55.6(11)na
Off-farm income of owner manager and spouse b$22,41025,300(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 Western Australian broadacre farms, by region, 2014–15 to 2016–17
average per farm
RegionUnit2014–152015–16pRSE2016–17y
511: WA Kimberley$1,120,3802,132,400(21)2,163,000
512: WA Pilbara and Southern Rangelands$451,010744,200(50)1,181,000
521: WA Central and South Wheat Belt$370,700306,500(11)336,000
522: WA North and East Wheat Belt$352,050352,700(18)377,000
531: WA South West$86,570166,300(27)139,000

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

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

Average farm cash incomes of Western Australian beef industry farms increased from $196,600 to $426,900 per farm in 2015–16 (Figure 2). As a result of higher average prices received for beef cattle and an increase in the number of cattle sold.

In 2016–17 farm cash income of Western Australian beef industry farms is estimated to have increased further to average $438,000 per farm. Receipts from the sale of cattle is expected to increase as a result of further increases in saleyard prices for beef cattle and an increase in the number of cattle sold. Average farm cash income of Western Australian beef industry farms is estimated to be around 257 per cent above the 10–year average to 2015–16 of $122,500 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 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.
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 to average $93,200 per farm (Figure 3) as a result of reduced receipts for sheep and lambs and increased costs.

In 2016–17 farm cash income for Western Australian sheep industry farms is estimated to have increased to average $141,000 per farm as a result of higher wool, lamb and sheep prices combined with increased sales. Farm cash income is estimated to be around 68 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 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.
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm cash income for Western Australian grains farms decreased in 2015–16 to an average of $343,000 per farm (Figure 4), mainly as a result of reduced crop production, lower grain quality and lower grain prices. Increases in receipts for beef cattle, sheep and wool on mixed enterprise farms were not sufficient to fully offset lower crop receipts.

In 2016–17 average farm cash income for Western Australian grains industry farms is estimated to have increased to $364,000 per farm, around 30 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 increased crop receipts and average total farm cash receipts by around 5 per cent, despite lower prices for wheat and barley.

Total cash costs are estimated to have increased by around 4 per cent, because of increased expenditure on harvesting and marketing the 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 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.
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Average farm cash income of Western Australian dairy farms increased to an average of $236,810 per farm in 2014–15 as a result of higher milk production (Figure 5; Table 4). 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, average farm cash income of Western Australian dairy farms increased to $339,300 per farm. The increase in farm cash income was driven by higher farm gate milk prices and an increase in milk production. Farm cash income was also boosted by increased receipts from the sale of cattle as a result of higher cattle prices and an increase in the number of cattle sold. The resulting increase in total farm cash receipts more than offset further increases in total farm cash costs.

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

In 2016–17 farm cash income of Western Australian dairy industry farms is estimated to remain similar to that recorded for 2015–16 at an average of $337,000 per farm, around 75 per cent above the 10-year average to 2015–16. Slightly higher cash receipts are estimated to have been largely offset by higher cash costs.

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 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.
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 4 Financial performance, Western Australian dairy industry 2014–15 to 2016–17
average per farm
MeasureUnit2014–152015–16pRSE2016–17y
Total cash receipts$1,258,2701,428,200(7)1,443,000
Total cash costs$1,021,4701,094,000(7)1,106,000
Farm cash income$236,810334,300(9)337,000
Farms with negative farm cash income%82(83)10
Farm business profit $152,980201,200(18)158,000
Profit at full equity
– excluding capital appreciation$267,290316,900(12)285,000
– including capital appreciation$364,980373,400(25)na
Farm capital at 30 June a$9,971,5809,446,100(7)na
Net capital additions$117,36086,300(85)na
Farm debt at 30 June b$1,730,5701,629,700(12)1,632,000
Change in debt – 1 July to 30 June b%25(48)1
Equity at 30 June bc$4,674,9204,205,200(10)na
Equity ratio bd%7372(4)na
Farm liquid assets at 30 June b$136,570159,400(30)na
Farm management deposits (FMDs) at 30 June b$36,80047,500(39)na
Share of farms with FMDs at 30 June b%1422(40)na
Rate of return e
– excluding capital appreciation%2.83.4(14)2.7
– including capital appreciation%3.84.0(27)na
Off-farm income of owner manager and spouse b$14,69013,100(31)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 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 south of Perth, and north around Carnarvon and in the far north 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.

Table 5 Selected physical and financial results, Western Australian vegetable-growing farms, 2014–15 and 2015–16
average per farm
IndicatorUnits2014–15p% change from 2013–142015–16y% change from 2014–15
Vegetable cash receipts$1,311,000(16)61,150,000–12
Area planted to vegetablesha33(13)18333
Quantity of vegetables producedt1,301(15)151,285–1
Farm cash income$382,100(20)–1207,000–46

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

Figure 6 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.
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.
​​
Last reviewed:
14 Aug 2017