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Farm performance: broadacre and dairy farms, 2015–16 to 2017–18

​​​​Peter Martin, Caroline Levantis, Walter Shafron, Paul Phillips and James Frilay

 Summary

  • In 2017–18 farm cash income for broadacre farms nationally is projected to average $191,000 per farm. This is a small decline from the average of $212,600 recorded in 2016–17 which was the highest farm cash income recorded in the past 20 years.
  • Lower farm cash income in 2017–18 is the result of reduced winter grain production in most regions and lower prices for beef cattle but is partly offset by higher prices for wool, sheep and lambs.
  • In 2017–18 average farm cash income is projected to decline for broadacre farms in all states except Victoria and Tasmania.
  • In 2017–18 higher wool, sheep and lamb prices are projected to result in farm cash income for sheep industry farms increasing to average $170,000, the highest farm cash income recorded in the past 20 years.
  • Farm cash income for dairy farms is projected to increase by 53 per cent nationally to an average of $137,000 per farm in 2017–18, reflecting higher milk prices and increased milk production.

Overview

Broadacre farms grow grains, oilseeds or pulses or run beef cattle or sheep and are located in all regions across Australia. In aggregate, broadacre farms accounted for 65 per cent of Australian farm businesses and an estimated 60 per cent of the total gross value of Australian agricultural production in 2016–17.

In 2017–18 less favourable seasonal conditions in most of Australia’s agricultural regions resulted in lower winter crop production and reduced pasture production for grazing beef cattle and sheep.

Despite higher prices for grains, oilseeds and pulses, lower crop production is projected to result in lower crop receipts for broadacre farms in most regions in 2017–18. Beef receipts are also projected to fall slightly because of lower prices, despite a small increase in turn-off per farm. In contrast, higher receipts for sheep, lambs and wool because of increased prices are projected to partly offset declines in crop and beef cattle receipts.

Nationally, average farm cash income for broadacre farms is projected to decrease from $212,600 per farm in 2016–17 to an estimated $191,000 per farm in 2017–18. Despite the projected fall in farm cash income, the 2017–18 estimate is expected to be the second highest in real terms in 20 years.

If realised, the reduction in broadacre farm cash income in 2017–18 will interrupt a four-year run of increasing farm incomes. These increases were mainly driven by higher prices for beef cattle and high beef cattle turn-off, partly in response to dry seasonal conditions in northern Australia in 2014–15 and 2015–16 and in parts of New South Wales, Victoria, South Australia and Tasmania in 2015–16. Beef cattle production is the most common and widely dispersed agricultural activity in Australia—around 57 per cent of all Australian farms carry beef cattle. From 2014–15 to 2016–17 increases in average farm cash income were also supported by high overall winter crop production; strong oilseed and pulse prices; higher sheep, lamb and wool prices; a relatively small increase in farm input costs; and lower interest rates on farm borrowing.

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Farm receipts

Nationally, crop receipts account for the largest component of total cash receipts for broadacre farms, at 43 per cent in 2016–17. In 2017–18 lower crop production in many regions because of less favourable seasonal conditions is projected to result in a 17 per cent decline in total crop receipts. In the same period, the reduction in crop production is expected to be partly offset by higher prices for grains, oilseeds and pulses.

Beef cattle is the second-largest component of total cash receipts for broadacre farms, accounting for 28 per cent of receipts in 2016–17. In 2017–18 lower prices for beef cattle are expected to be partly offset by increased turn-off per farm, resulting in a 7 per cent reduction in beef cattle receipts. Following a small build-up in beef herds in 2016–17, drier seasonal conditions in Queensland and northern New South Wales are expected to contribute to the projected increase in cattle turn-off.

In 2016–17 receipts from sheep, lambs and wool accounted for 22 per cent of broadacre farm cash receipts. In 2017–18 this proportion is expected to rise to 27 per cent, the highest contribution of sheep, lambs and wool to farm cash receipts since 2002–03, when crop receipts were low because of drought. Average farm cash receipts in all states are projected to be boosted by higher prices for sheep, lambs and wool in 2017–18. In response to strong prices for wool, sheep and lambs, most broadacre farms with sheep have increased their production of wool, adult sheep turn-off and lambs sold for slaughter. Despite increased sheep and lamb turn-off, a small increase in the average size of sheep flocks on broadacre farms is projected in 2017–18.

In 2017–18 increased milk production and higher farmgate milk prices are projected to result in increased total cash receipts for dairy farms. Total cash receipts are projected to increase for dairy farms in all states except Queensland and Western Australia, where milk production is expected to be lower.

Farm costs

Average farm cash costs for broadacre farms are projected to fall nationally by around 3 per cent in 2017–18. Increased expenditure on hired labour; shearing and crutching; fertiliser; crop and pasture chemicals; fuel oil and grease; and interest payments are projected to be more than offset by lower expenditure on other cost categories. In particular, expenditure on beef cattle purchases is projected to fall by around 29 per cent in response to drier seasonal conditions in many areas and increased cattle turn-off.

In 2016–17 most dairy-farming regions recorded lower average farm cash costs. These were the result of lower hay and feed grain prices, favourable seasonal conditions in spring and early summer, increased availability of irrigation water and reduced dairy cow numbers. In 2017–18 a return to dry seasonal conditions in some regions is projected to result in increased expenditure on fodder by dairy farms.

Despite dry seasonal conditions, increased milk production is projected to result in increased expenditure on all major cost items, including wages paid for hired labour; fertiliser; crop and pasture chemicals; fuel, oil and grease; and repairs and maintenance. Slight reductions are projected for dairy cattle purchases and interest payments as a result of reduced average debt.

Box 1 Broadacre sector of Australian agriculture

The sector includes five industry types:

Wheat and other crops industry: specialised producers of cereal grains, coarse grains, pulses and oilseeds.

Mixed livestock–crops industry: properties engaged in producing sheep and/or beef cattle in conjunction with substantial activity in broadacre crops such as wheat, coarse grains, oilseeds and pulses.

Sheep industry: specialised producers of sheep and wool. Sheep industry farms account for only 30 per cent of Australia’s wool production. Most wool and sheep meat production occurs on mixed enterprise farms, particularly on mixed livestock–crops industry farms.

Beef industry: properties engaged mainly in running beef cattle, accounting for around 65 per cent of Australia’s beef production. This industry includes many small farms.

Sheep–beef industry: properties engaged in running sheep and beef cattle. This industry includes many small farms.


Box 2 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 + change 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 to total capital used: efficiency of businesses in generating returns from all resources used (profit at full equity/total opening capital) x 100

Rate of return to total capital including capital appreciation: profit and capital gain generated from all resources used (profit at full equity including capital appreciation/total opening capital) x 100


Box 3 Farm survey methodology

Each year, as part of its annual farm survey programme, ABARES interviews operators of around 1,600 broadacre farm businesses in its Australian Agricultural and Grazing industries Survey (AAGIS) and 300 dairy farm businesses in its Australian Dairy Industry Survey (ADIS). The AAGIS is targeted at commercial-scale broadacre farms— those that grow grains or oilseeds or run sheep or beef cattle and have an estimated value of agricultural output exceeding $40,000. Broadacre industries covered in this survey include wheat and other crops, mixed livestock–crops, sheep, beef and sheep–beef industries. The ADIS is targeted at commercial-scale milk-producing farms.

The information collected provides a basis for analysing the current financial position of farmers in these industries and expected changes in the short term. Data from the AAGIS and ADIS were analysed to gain insights into the performance of Australian broadacre and dairy farms in 2016–17, including projected farm financial performance in 2017–18.

ABARES uses the latest data available to produce estimates from its surveys. This means estimates are revised as new information becomes available. Preliminary estimates previously published are recalculated to reflect updated benchmark information from the Australian Bureau of Statistics (ABS).

ABARES surveys are designed, and samples selected, on the basis of a framework drawn from the ABS Business Register. This framework includes agricultural establishments in each statistical local area, classified by size and major industry.

Data provided in this article were collected through on-farm interviews and incorporate detailed farm financial accounting information. The estimates presented were calculated by appropriately weighting the data collected from each sample farm.

Sample weights are calculated so estimates of number of farms, areas of crops and numbers of livestock in various geographic regions and industries correspond as closely as possible with the most recently available ABS data, as collected in agricultural censuses and updated annually with data collected in agricultural commodity surveys.

Estimates for 2015–16 and earlier years are final. All data from farmers, including accounting information, have been reconciled. Final production and population information from the ABS has been included and no further change is expected in the estimates.

The 2016–17 estimates are preliminary, based on full production and accounting information from farmers. However, editing and addition of sample farms may be undertaken and ABS production benchmarks may also change.

The 2017–18 projections are based on data collected through on-farm interviews and telephone interviews between October 2017 and January 2018. The estimates include crop and livestock production, receipts and expenditure up to the date of interview, together with expected production, receipts and expenditure for the remainder of the financial year. Modifications have been made to expected receipts and expenditure for the remainder of 2017–18 where prices have changed significantly since the interview.

Farm income and profit

Nationally, average farm cash income for broadacre farms has been high in recent years compared with incomes recorded historically. Farm cash income increased from $182,470 in 2015–16 to $212,600 in 2016–17. In 2017–18 farm cash income is projected to fall by around 10 per cent to average $191,000 per farm (Table 1), 43 per cent higher than the 10-year average to 2016–17 of $133,000 in real terms. If achieved, it would be the second-highest average farm cash income for broadacre farms in over 20 years (Figure 1).

In 2017–18 average broadacre farm cash income is projected to fall in all states except Victoria and Tasmania. Overall, average farm cash income differs significantly across industries, states and regions. By industry, incomes are projected to fall for farms in the wheat and other crops, mixed livestock–crops, and beef industries. Incomes are projected to rise in 2017–18 for farms in the sheep and dairy industries.

Table 1 Financial performance, all broadacre industries, Australia, 2015–16 to 2017–18
average per farm
Financial performance measure Unit 2015–16 2016–17p  2017–18y
Total cash receipts $ 529,800 604,200 (3) 573,000
Total cash costs $ 347,330 391,600 (3)381,000
Farm cash income $ 182,470 212,600 (4)191,000
Farms with negative farm cash income % 14 13 (15)16
Farm business profit $ 68,570 130,600 (6)91,000
Profit at full equity
– excluding cap. appreciation $ 107,600 171,000 (5)132,000
– including cap. appreciation $ 383,110 386,800 (5)na
Farm capital at 30 June a$ 4,874,370 5,307,900 (3)na
Net capital additions $ 41,950 94,500 (22)na
Farm debt at 30 June b$ 536,480 616,900 (7)na
Change in debt - 1 July to 30 June b% 5 5 (40)na
Equity at 30 June bc$ 3,912,280 4,294,100 (3)na
Equity ratio bd% 88 87 (1)na
Farm liquid assets at 30 June b$ 209,370 231,000 (8)na
Farm management deposits (FMDs) at 30 June b$ 65,590 74,500 (10)na
Change in FMDs - 1 July to 30 June b% 5 21 (6)na
Rate of return e
– excluding cap. appreciation % 2.4 3.4 (4)2.5
– including cap. appreciation % 8.4 7.8 (5)na
Off-farm income of owner-manager and partner b$ 34,710 51,700 (29)na

a Excludes leased plant and equipment. b Average per responding farm. 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 estimates. y Provisional estimates. na Not available.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm cash income is a measure of cash funds generated by the farm business for farm investment and consumption after paying all costs incurred in production. This includes interest payments but excludes depreciation and payments to family workers. It is a measure of short-term farm performance because it does not take into account depreciation or changes in farm inventories. Farm business profit is a measure of longer-term profitability because it takes into account capital depreciation and changes in inventories of livestock, fodder, grain and wool.

In 2017–18 reductions in beef cattle and on-farm grain stocks in most states will reduce farm inventory values and result in a larger decrease in farm business profit compared with that for farm cash income. Farm business profit for Australian broadacre farms is expected to average $91,000 per farm in 2017–18. If achieved, this would be the second-highest farm business profit for broadacre farms in the 20 years since 1996–97.

Figure 1 Financial performance, all broadacre industries, Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
p Preliminary estimates. y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Investment returns

The average rate of return to total farm capital including capital appreciation for broadacre farms was high between 2000–01 and 2006–07 (Figure 2). Strong demand for rural land during most of the 2000s resulted in a sharp increase in land values in most agricultural regions. This raised the total capital value of farms. Rapidly rising farm capital values resulted in high rates of return including capital appreciation. However, from 2007–08 land values generally did not increase and reported land values declined in several regions in the five years to 2013–14. The reduction in reported land values during this period resulted in lower estimates of average rate of return to total farm capital including capital appreciation for broadacre and dairy farms.

In 2014–15 and 2015–16 a rise in land values was recorded in some high rainfall and pastoral zone regions. The value of beef and dairy cattle also increased significantly, contributing to an increase in average farm capital value and a divergence between rate of return including capital appreciation and rate of return excluding capital appreciation (Table 2).

Figure 2 Return on capital, average all broadacre industries, Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
p Preliminary estimates. y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

The average rate of return excluding capital appreciation for Australian broadacre farms is estimated to have been 3.4 per cent in 2016–17 and is expected to fall in 2017–18 to average 2.5 per cent as profit falls for many farms.

In 2017–18 rates of return excluding capital appreciation are expected to be positive across all states. The Northern Territory (5.1 per cent) and Western Australian (5.0 per cent) are projected to have the highest average rates of return excluding capital appreciation.

The projected average rate of return excluding capital appreciation is highest in the sheep–beef industry, at 3.4 per cent. The sheep industry has the second-highest projected average rate of return excluding capital appreciation, at 3.3 per cent. If achieved, this would be the first time the sheep industry has recorded a higher rate of return than the cropping industries since the late 1980s.

The dairy industry has a projected average rate of return excluding capital appreciation of 2.3 per cent in 2017–18 compared with 1.3 per cent in 2016–17. In 2017–18 the average rate of return is expected to be highest in Tasmania (3.7 per cent) and Western Australia (3.2 per cent) and lowest in Queensland (0.6 per cent).

Table 2 Financial performance of all broadacre industries, by state, Australia, 2015–16 to 2017–18
average per farm
MeasureFarm cash incomeFarm business profit a Rate of return excluding capital appreciation bRate of return including capital appreciation b
2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 
Unit$$$$$$%%%%%
New South Wales174,760183,400(7)166,00089,320107,200(11)65,0002.93.1(8)2.012.010.6(9)
Victoria96,060124,600(7)131,000–19,96079,400(12)53,0000.22.8(10)2.04.97.6(11)
Queensland201,230232,000(8)186,00074,210137,400(12)77,0002.23.0(8)1.98.16.0(13)
Western Australia304,120387,400(6)358,000171,270234,800(10)229,0004.25.2(8)5.05.86.1(11)
South Australia182,380239,500(10)199,00055,280152,900(14)88,0002.24.0(9)2.58.36.1(12)
Tasmania156,340140,500(10)174,00017,21073,500(17)101,0001.22.4(12)2.94.33.5(21)
Northern Territory2,127,3601,552,500(28)1,341,0001,290,1201,519,100(32)1,286,0006.26.2(22)5.114.911.5(29)
Australia182,470212,600
(4)191,00068,570130,600(6)91,0002.43.4(4)2.58.47.8(5)
Dairy industry
Australia125,26089,600(22)137,000–9,950–8,300(301)41,0001.31.3(42)2.35.93.2(21)

a Defined as farm cash income plus build-up in trading stocks, less depreciation and the imputed value of operator, partner and family labour. b Rate of return to farm capital at 1 July. p Preliminary estimates. y Provisional estimates.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Generally, larger farms generate higher rates of return as a result of increasing returns to scale, greater access to superior technologies and greater management skill (Jackson & Martin 2014).

Very large wheat and other crops industry farms (Box 4) generated an average rate of return excluding capital appreciation of 8.1 per cent over the five years to 2015–16, compared with 5.3 per cent for large farms and 2.3 per cent for medium-sized farms and –0.5 per cent for small farms (Table 3). In 2016–17 the average rate of return for very large wheat and other crops industry farms increased to 9.1 per cent but is expected to fall to 6.0 per cent in 2017–18.

Very large dairy farms generated an average rate of return of 6.2 per cent over the five years to 2015–16 and 5.2 per cent in 2016–17. This is expected to increase to 9.1 per cent in 2017–18.

The largest increase in rate of return excluding capital appreciation in recent years was for very large beef industry farms. Rates of return increased from an average of 3.6 per cent for the five years to 2015–16 to a projected 8.9 per cent in 2017–18.

Table 3 Rate of return to total capital (excluding capital appreciation) by industry and farm size, Australia, 2011–12 to 2017–18
average per farm
IndustryBusiness sizeFive years ending 2015–162016–17p2017–18y
%%%
Wheat and other cropsSmall–0.50.6(124)0.7
Medium2.34.7(10)2.3
Large5.36.8(7)4.1
Very large8.19.1(13)6.0
Mixed livestock-cropsSmall–0.50.8(72)1.1
Medium2.64.1(8)3.2
Large3.95.0(8)4.0
Very large9.24.6(32)4.4
SheepSmall–0.51.3(31)2.7
Medium2.33.9(13)6.0
Large4.65.6(10)7.1
Very largensns ns
BeefSmall–0.70.3(90)–0.2
Medium1.72.8(11)3.2
Large2.03.8(9)4.0
Very large3.66.2(13)8.9
Sheep-beefSmall–0.21.4(33)2.6
Medium1.83.2(17)4.4
Large3.45.1(9)6.5
Very largensns ns
All broadacre farms1.73.4(3)2.5
DairySmall0.0–1.8(78)0.2
Medium2.21.9(14)3.8
Large4.32.7(9)4.1
Very large6.25.2(17)9.1
All dairy farms2.61.3(31)3.1

p Preliminary estimates. y Provisional estimates. ns Not supplied. Too few farms to provide reliable estimates.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Box 4 Farm sizes

Small farms: farms with a total value of sales of less than $500,000. Small farms account for 70 per cent of Australian broadacre and dairy farms and around 25 per cent of the total value of sales (receipts) from broadacre and dairy farms. Small farms are mostly family owned and operated, typically with a total capital value of less than $5 million. Off-farm income from wages, salaries, investments and other non-farm businesses often accounts for more than 50 per cent of the disposable cash income of farm operators.

Medium farms: farms with a total value of sales of between $500,000 and $1 million. Medium farms account for 16 per cent of Australian broadacre and dairy farms and around 22 per cent of the total value of sales from broadacre and dairy farms. Medium farms are mostly family owned and operated, typically with a total capital value of between $5 million and $9 million. Off-farm income generally accounts for less than 50 per cent of the disposable cash income of farm operators.

Large farms: farms with a total value of sales of between $1 million and $5 million. Large farms account for 13 per cent of Australian broadacre and dairy farms and for around 45 per cent of the total value of sales from broadacre and dairy farms. The majority of large farms are family owned and operated, but complex ownership and operating arrangements are more common among large farms. Typically, the total capital invested in large farms exceeds $10 million. Off-farm income usually accounts for only a small proportion of the disposable cash income of farm operators.

Very large farms: farms with a total value of sales exceeding $5 million. The majority of very large farms have corporate structures and are often part of a conglomeration of rural properties. Very large farms account for 1 per cent of broadacre and dairy farms and 8 per cent of the total value of sales.

Performance, by state

Projected farm financial performance in 2017–18, is expected to remain high in historical terms, while varying markedly across states and regions (Table 4 and Table 5).

Map 1 Broadacre zones and regions, Australia
This figure is discussed in the below paragraphs
Note: Each region is identified by a unique code of three digits. The first digit indicates the state or territory, the second digit identifies the zone and the third digit identifies the region.
Source: ABARES
Table 4 Farm cash income, broadacre farms, by region, Australia, 2016–17 to 2017–18
average per farm
UnitFive years ending 2015–162016–17p 2017–18y
$$$
New South Wales
111: NSW Far West188,570306,900(15)386,000
121: NSW North West Slopes and Plains137,520259,500(12)144,000
122: NSW Central West127,390172,700(10)177,000
123: NSW Riverina191,620237,300(16)227,000
131: NSW Tablelands82,070133,000(15)140,000
132: NSW Coastal14,46036,700(26)22,000
Victoria
221: VIC Mallee159,230178,900(30)182,000
222: VIC Wimmera142,790179,300(17)225,000
223: VIC Central North99,19069,700(22)75,000
231: VIC Southern and Eastern Victoria80,550127,200(8)132,000
Queensland
311: QLD Cape York and the Gulf202,230730,200(26)906,000
312: QLD West and South West218,880172,100(59)276,000
313: QLD Central North153,050396,100(30)295,000
314: QLD Charleville - Longreach166,750253,800(17)308,000
321: QLD Eastern Darling Downs100,90096,100(43)151,000
322: QLD Darling Downs and Central Highlands165,440378,200(10)219,000
331: QLD South Queensland Coastal48,92094,000(24)60,000
332: QLD North Queensland Coastal73,410131,000(27)132,000
South Australia
411: SA North Pastoral221,910271,200(30)395,000
421: SA Eyre Peninsula266,110267,600(17)174,000
422: SA Murray Lands and Yorke Peninsula227,560289,600(16)171,000
431: SA South East128,440171,100(17)219,000
Western Australia
511: WA Kimberley863,6101,608,800(9)904,000
512: WA Pilbara and Southern Rangelands329,940747,400(22)456,000
521: WA Central and South Wheat Belt292,850427,900(9)449,000
522: WA North and East Wheat Belt305,710451,400(11)300,000
531: WA South West97,910155,300(20)192,000
Tasmania117,250143,300(10)174,000
Northern Territory
711: NT Alice Springs District276,750854,500(40)871,000
712: NT Barkly Tablelands3,132,2103,927,400(19)3,935,000
713: NT Victoria River District - Katherine520,6201,496,000(62)659,000
714: NT Top End Darwin and the Gulf 170,090486,500(39)538,000

p Preliminary estimates. y Provisional estimates.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

New South Wales

Average farm cash income was high in New South Wales in 2015–16 and increased further in all regions in 2016–17 as a result of higher prices for beef cattle, wool, sheep, lambs and increased crop production (Table 4).

In 2017–18 average farm cash income is projected to increase further in the Far west, Central West and Tablelands regions while declining in the North West Slopes and Plains, Riverina and Coastal regions of New South Wales, a result of lower winter crop production and lower prices for beef cattle.

Broadacre farm cash income in New South Wales is projected to decrease to average $166,000 per farm in 2017–18. Despite declining from the previous year, this result would still be 52 per cent higher than the 10-year average to 2016–17 of $109,000 (Figure 3).

Figure 3 Farm cash income, all broadacre farms, New South Wales and Queensland, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
p Preliminary estimates. y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 5 Financial performance, all broadacre industries, by state, Australia, 2015–16 to 2017–18
average per farm
State New South WalesVictoriaQueenslandWestern AustraliaSouth AustraliaTasmaniaNorthern TerritoryAustralia
2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y
Total cash receipts$509,580547,900(5)518,000338,390385,400(5)398,000511,920616,200(6)540,000968,1901,112,800(5)1,063,000486,750618,000(8)577,000480,390453,500(6)493,0003,925,0803,487,500(19)3,303,000529,800603,600(2)573,000
Total cash costs$334,820364,500(5)352,000242,330260,800(5)268,000310,690384,300(10)355,000664,080725,400(5)705,000304,370378,500(8)378,000324,050313,000(7)319,0001,797,7301,935,000(15)1,962,000347,330391,300(3)381,000
Farm cash income$174,760183,400(7)166,00096,060124,600(7)131,000201,230232,000(8)186,000304,120387,400(6)358,000182,380239,500(10)199,000156,340140,500(10)174,0002,127,3601,552,500(28)1,341,000182,470212,600(4)191,000
Farms with negative farm cash income%1416(24)152016(27)151713(21)2356(37)1183(41)19716(38)615(81)11413(13)16
Farm business profit $89,320107,200(11)65,000–19,96079,400(12)53,00074,210137,400(12)77,000171,270234,800(10)229,00055,280152,900(14)88,00017,21073,500(17)101,0001,290,1201,519,100(32)1,286,00068,570130,600(6)91,000
Profit at full equity
- excl. cap. appreciation$123,980143,900(9)104,0009,040109,900(10)83,000114,150181,300(10)122,000244,520304,100(8)296,00089,300187,400(12)124,00053,710108,900(13)138,0001,437,2201,648,200(29)1,415,000107,600170,600(4)132,000
- incl. cap. appreciation$520,130497,300(9)na181,540302,000(11)na425,300366,300(13)na336,030351,900(12)na336,740285,200(13)na195,770156,300(22)na3,467,3703,074,300(35)na383,110386,200(5)na
Farm capital at 30 June a$4,798,7005,161,200(4)na3,897,8504,291,200(4)na5,618,3606,374,000(4)na5,973,2406,031,900(5)na4,354,2704,878,400(8)na4,648,1104,589,500(6)na24,844,56028,447,000(11)na4,874,3705,303,500(2)na
Net capital additions$50,85086,100(34)na4,73085,900(30)na61,24046,900(145)na70,020184,600(28)na41,780119,700(35)na–31,21022,300(234)na228,000–49,000(523)na41,95092,900(20)na
Farm debt at 30 June b$527,300643,300(8)na349,160398,100(8)na626,150706,100(11)na919,530992,100(11)na436,770445,200(14)na481,070641,900(15)na1,361,8301,718,500(21)na536,480615,900(5)na
Change in debt - 1 July to 30 June b%128(39)476(50)006(94)43–1(369)126(84)–1–310(58)410(1615)255(34)2
Equity at 30 June bc$3,827,8104,297,200(4)na3,263,8403,737,300(5)na4,505,6204,953,900(4)na4,673,3604,641,200(6)na3,776,7703,920,400(9)na3,661,2604,164,300(7)na10,130,16012,275,000(10)na3,912,2804,290,500(2)na
Equity ratio bd%8887(1)na9090(1)na8888(1)na8482(2)na9090(1)na8887(2)na8888(2)na8887(1)na
Farm liquid assets at 30 June b$244,350235,400(19)na156,910167,700(12)na189,860269,900(13)na206,700265,200(15)na258,510271,200(15)na179,060176,900(21)na91,040182,200(39)na209,370231,500(8)na
Farm management deposits (FMDs) at 30 June b$54,60064,100(20)na42,25045,900(17)na51,96079,600(16)na86,070105,400(17)na139,500124,100(20)na73,83065,000(33)na15,92024,600(76)na65,59074,400(9)na
Change in FMDs - 1 July to 30 June b%523(12)na–914(13)na2340(12)na422(15)na1010(14)na7–4(28)nana5(64)na521(6)na
Rate of return e
- excl. cap. appreciation%2.93.1(8)20.22.8(10)22.23(8)1.94.25.2(8)52.24(9)2.51.22.4(12)2.96.26.2(22)5.12.43.4(4)2.5
- incl. cap. appreciation%1210.6(9)na4.97.6(11)na8.16(13)na5.86.1(11)na8.36.1(12)na4.33.5(21)na14.911.5(29)na8.47.8(5)na
Off-farm income of owner manager and partner b$37,82039,400(12)na 34 000 92 400(62)na38,53052,300(12)na28,27024,300(62)na28,28031,300(12)na28,23036,300(16)na75,22039,000(23)na34,71051,600(27)na

a Excludes leased plant and equipment. b Average per responding farm. 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 estimates. y Provisional estimates. na Not available.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Victoria

In 2015–16 average farm cash income for Victorian broadacre grain farms was 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 farm cash income for all regions of Victoria except the Central North region increased. This was a result of increased production of wheat, barley, oilseeds and pulses, and increased receipts from sheep, lambs and wool.

In 2017–18 farm cash income is projected to increase in all Victorian regions, particularly the Wimmera (Table 4). Average farm cash income for broadacre farms in Victoria is projected to increase to $131,000 per farm in 2017–18. If achieved, this would be around 37 per cent above the 10-year average to 2016–17 (Figure 4).

Figure 4 Farm cash income, all broadacre farms, Victoria and Tasmania, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
p Preliminary estimates. y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Queensland

Farm cash income increased in all Queensland regions in 2015–16. This was achieved partly through a reduction in cattle herds when cattle turn-off increased in response to dry seasonal conditions and higher cattle prices. In 2016–17 farm cash income increased in the Cape York and the Gulf region, Central North, Charleville–Longreach, Darling Downs and Central Highlands, South Queensland Coastal and North Queensland Coastal regions (Table 4). In contrast, farm cash income decreased in the West and South West, and Eastern Darling Downs regions. In 2016–17 production of wheat and pulses, particularly chickpeas, increased, but grain sorghum production decreased.

Overall total farm cash receipts for Queensland broadacre farms are projected to decrease by 12 per cent in 2017–18. Average total cash costs are projected to decrease by around 8 per cent. Average broadacre farm cash income in Queensland is projected to decrease to $186,000 per farm in 2017–18. If achieved, this would still be around 55 per cent above the 10-year average to 2016–17.

South Australia

Average broadacre farm cash income declined in 2015–16 but increased in 2016–17 as a result of high grain yields and despite reduced wheat and barley prices (Figure 5). In 2016–17 higher receipts from lentils also contributed to higher average farm cash income for farms in the Murray Lands and Yorke Peninsula region.

In 2017–18 broadacre farm cash income is projected to decrease to average $199,000 per farm. This would be around 13 per cent above the 10-year average to 2016–17.

Figure 5 Farm cash income, all broadacre farms, South Australia and Western Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
p Preliminary estimates. y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Western Australia

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. The impact of lower grain receipts on 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 average total farm cash income increased in all regions of Western Australia largely because of higher beef cattle receipts (Table 4).

Overall, broadacre farm cash income in Western Australia is projected to decrease from an average of $387,400 per farm in 2016–17 to $358,000 per farm in 2017–18. If achieved, this would be around 49 per cent above the 10-year average to 2016–17.

Tasmania

In 2015–16 average farm cash income for Tasmanian broadacre farms was similar to that recorded in 2014–15. Dry seasonal conditions throughout 2015 resulted in reduced crop and wool production and a further increase in beef cattle turn-off. Crop, sheep and wool receipts declined and beef cattle receipts increased due to higher turn-off and higher beef cattle prices.

In 2016–17 average farm cash income fell in Tasmania with declines in receipts for beef cattle, wool, sheep and crops.

On average, farm cash income for broadacre farms in Tasmania is projected to increase to $174,000 per farm in 2017–18 (Table 5). This would be around 74 per cent above the 10-year average to 2016–17 and the highest in over 20 years (Figure 4).

Northern Territory

Many farm businesses in the north of the Northern Territory derive a large share of their total cash receipts from selling cattle for live export, particularly to Indonesia. The expansion of the live export trade between 2013–14 and 2015–16 resulted in cattle being sourced from a much larger area of northern Australia.

In 2016–17 average farm cash income decreased as a result of lower total cash receipts and a small increase in total cash costs. Average farm cash income increased in each region (Table 4). Overall, farm cash income in the Northern Territory is projected to decrease to average $1,341,000 per farm in 2017–18, compared with the 10-year average to 2016–17 of $722,000 per farm (Figure 6). This result would be 86 per cent above the 10-year average to 2016–17.

Figure 6 Farm cash income, all broadacre farms, Northern Territory, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
p Preliminary estimates. y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance, by industry

Farm financial performance in 2016–17, projected performance in 2017–18 and historical ranking vary markedly across industries (Table 6 and Table 7).

Wheat and other crops industry

Average farm cash income for the wheat and other crops industry decreased slightly in 2015–16, mainly as a result of lower grain and oilseed prices. The decline in total grain receipts was partly offset by increased receipts for pulses. Average farm cash costs did not increase and farm cash income for wheat and other crops industry farms averaged $311,830 per farm.

In 2016–17 farm cash income for the wheat and other crops industry increased to an average of $426,500 per farm. This is the result of increased winter crop production in all major grain-producing states in 2016–17 offsetting lower prices for grains and oilseeds and increased total cash costs (Figure 7).

In 2017–18 average farm cash income for the wheat and other crops industry is projected to fall to an average of $266,000 as a result of less favourable seasonal conditions following the record high winter crop production of 2016–17.

Wheat and other crops industry farms recorded an average rate of return excluding capital appreciation of 6 per cent in 2016–17. This is projected to fall to 3 per cent in 2017–18.

Figure 7 Farm cash income, grains industries, Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 6 Financial performance, broadacre farms, by industry, Australia, 2015–16 to 2017–18
average per farm
 Farm cash incomeFarm business profit Rate of return excluding capital appreciation aRate of return including capital appreciation a
2015–162016–17p2017–18y2015–162016–17p2017–18y2015–162016–17p2017–18y2015–162016–17p2017–18y
Unit$$$$$$%%%%%%
Wheat and other crops311,830426,500266,000195,080303,700117,0004.5638.610.5na
Mixed livestock crops176,170248,700242,00049,410148,600122,0002.13.93.25.310.9na
Beef industry174,230150,600132,00054,05083,80048,0001.72.11.410.95.1na
Sheep96,720125,800170,0005,10061,10095,0000.82.43.35.36.1na
Sheep beef158,870174,500235,00055,370105,400141,00022.83.48.17.9na
All broadacre industries182,470212,600191,00068,570130,60091,0002.43.42.58.47.8na
Dairy125,26089,600137,000–9,950–8,30041,0001.31.32.35.93.2na

a Rate of return to farm capital at 1 July. p Preliminary estimates. y Provisional estimates. na Not available.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industries Survey

Mixed livestock–crops industry

Average farm cash income for the mixed livestock–crops industry increased in 2015–16 to $176,170 per farm. In 2016–17 crop receipts increased due to increased winter crop production and higher receipts from beef cattle, sheep, lambs and wool. This resulted in an overall increase in total farm cash receipts of around 20 per cent.

In 2017–18 total cash receipts are projected to decrease by around 4 per cent, total cash costs by around 4 per cent and total average farm cash income by around 3 per cent to $242,000 per farm. This result would be around 70 per cent above the 10-year average to 2016–17.

Sheep industry

In 2015–16 reduced wool production resulted in farm cash income for sheep industry farms declining slightly to average $96,720 per farm (Figure 8).

In 2016–17 farm cash income for the sheep industry increased to an average of $125,800 per farm as a result of higher wool, lamb and sheep prices. In 2017–18 average farm cash income is projected to increase further to $170,000 per farm. If realised, farm cash income will be around 88 per cent higher than the 10-year average to 2016–17 and the highest recorded in the 20 years since 1997–98 (Figure 8).

Figure 8 Farm cash income, sheep industries, Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Sheep–beef industry

In 2015–16 receipts from the sale of beef cattle increased significantly, and receipts from the sale of sheep, lambs and wool increased slightly. This was the result of higher prices for beef cattle, lambs, adult sheep and wool and despite a reduction in beef cattle turn-off. In 2015–16 farm cash income for sheep–beef industry farms increased to average $158,870 per farm.

In 2016–17 farm cash income for sheep–beef industry farms increased further to average $174,500 per farm as a result of higher prices for wool, lambs, sheep and beef cattle and despite a reduction in beef cattle turn-off. In 2017–18 farm cash income is projected to increase to an average of $235,000 per farm. If achieved, this would be around 114 per cent above the 10-year average to 2016–17 and the highest average farm cash income of sheep–beef farms in the 20 years since 1997–98.

Beef industry

Beef industry average farm cash income increased strongly in 2015–16 as a result of increased cattle prices and the highest beef cattle turn-off in 36 years (Figure 9). Increased turn-off was due to dry seasonal conditions. Average farm cash income for beef industry farms is estimated to have increased from $98,000 per farm in 2014–15 to $174,230 in 2015–16.

In 2016–17 farm cash income for beef industry farms decreased to an average of $150,600 per farm. Average total farm cash receipts increased for beef industry farms in 2016–17. However, average total cash costs increased at a higher rate than receipts. In 2017–18 average total farm cash income is projected to decrease further to $132,000 per farm as a result of decreased beef cattle receipts (Table 6).

Figure 9 Farm cash income, beef industry, Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 7 Financial performance, by industry, broadacre and dairy industries, Australia, 2015–16 to 2017–18
average per farm
 Wheat and other crops industryMixed livestock-crops industrySheep industryBeef industrySheep-beef industryDairy industry
2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 2017–18y
Total cash receipts$1,051,1001,297,300(4)1,107,000583,350701,600(7)677,000288,970330,100(9)388,000404,380410,800(6)381,000437,750475,100(13)515,000766,970711,500(3)782,000
Total cash costs$739,270870,700(4)841,000407,180453,000(10)435,000192,250204,400(10)219,000230,160260,200(6)249,000278,880300,600(13)280,000641,720621,900(3)645,000
Farm cash income$311,830426,500(7)266,000176,170248,700(7)242,00096,720125,800(9)170,000174,230150,600(8)132,000158,870174,500(15)235,000125,26089,600(22)137,000
Farms with negative farm cash income%1410(31)271610(31)121210(32)71518(23)20106(47)61731(20)25
Farm business profit $195,080303,700(8)117,00049,410148,600(12)122,0005,10061,100(20)95,00054,05083,800(15)48,00055,370105,400(19)141,000 9,950 8,300(301)41,000
Profit at full equity
- excl. cap. appreciation$286,920399,100(7)216,00098,440200,000(9)174,00023,88078,400(16)113,00077,020109,000(12)74,00081,520132,100(19)167,00055,80062,300(41)112,000
- incl. cap. appreciation$553,990703,700(8)na247,020551,500(10)na157,910194,500(19)na497,690260,700(13)na329,280370,800(19)na247,890149,500(21)na
Farm capital at 30 June a$6,820,0507,343,400(4)na4,934,0105,571,600(6)na3,073,4803,367,200(8)na4,970,5905,304,000(4)na4,367,4404,887,400(12)na4,516,8804,793,200(3)na
Net capital additions$71,070315,900(18)na101,200117,300(22)na 11,37023,700(109)na19,77058,300(70)na62,150 52,400(164)na116,0601,900(99)na
Farm debt at 30 June b$1,184,9101,425,600(6)na668,690752,500(23)na268,640266,900(12)na337,330396,800(13)na420,070423,600(18)na938,680926,700(6)na
Change in debt - 1 July to 30 June b%75(45)175(97)5 26(77)448(77)25 5(95)27 2(196) 1
Equity at 30 June bc$5,240,6105,690,800(5)na3,997,7704,604,500(5)na2,690,9502,978,200(8)na3,934,2404,175,800(4)na3,706,0504,186,600(13)na3,584,6003,724,400(4)na
Equity ratio bd%8280(1)na8686(3)na9192(1)na9291(1)na9091(1)na7980(2)na
Farm liquid assets at 30 June b$325,990337,400(20)na168,060199,100(12)na111,500149,700(13)na242,230247,500(14)na152,730191,400(24)na193,620168,200(18)na
Farm management deposits (FMDs) at 30 June b$177,980166,800(21)na65,91092,500(14)na30,68042,000(24)na36,21042,600(21)na38,88059,000(23)na31,98032,000(28)na
Change in FMDs - 1 July to 30 June b%414(10)na1431(11)na421(16)na525(15)na2120(20)na 24(26)na
Rate of return e
- excl. cap. appreciation%4.56(6)32.13.9(9)3.20.82.4(12)3.31.72.1(11)1.422.8(11)3.41.31.3(42)2.3
- incl. cap. appreciation%8.610.5(8)na5.310.9(10)na5.36.1(16)na10.95.1(12)na8.17.9(18)na5.93.2(21)na
Off-farm income of owner manager and partner b$36,40044,000(26)na31,97030,100(13)na30,07027,700(16)na38,04082,000(49)na33,29034,500(17)na16,84015,900(14)na

a Excludes leased plant and equipment. b Average per responding farm. 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 estimates. y Provisional estimates. na Not available.
Note: Figures in parentheses are standard errors expressed as percentages of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Dairy industry

In 2016–17 average farm cash income declined in New South Wales, Victoria, South Australia and Tasmania (Table 8). Farm cash income for Victorian dairy farms declined from an average of $105,350 per farm in 2015–16 to $53,700 in 2016–17 (Figure 10). In contrast, in Western Australia higher milk prices and an increase in milk production resulted in a rise in average farm cash income for dairy farms (Figure 11). In Queensland, higher average milk prices and a small reduction in average farm cash costs (mainly due to the exit of higher-cost producers) resulted in an increase in average farm cash income.

In 2017–18 farm cash income is projected to increase in Victoria, South Australia and Tasmania as a result of higher milk prices and increased milk production. In New South Wales, Queensland and Western Australia, farm cash income is projected to decline as drier seasonal conditions result in increased fodder expenditure and reduced milk production per farm. Nationally, farm cash income is projected to increase from an average of $89,600 per farm in 2016–17 to $137,000 per farm in 2017–18.

Figure 10 Farm cash income, dairy industry farms, New South Wales and Victoria, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey
Figure 11 Farm cash income, dairy industry farms, Western Australia and Tasmania, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey
Figure 12 Farm cash income, dairy industry farms, Queensland and South Australia, 1997–98 to 2017–18
average per farm
This figure is discussed in the above paragraphs
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey
Table 8 Financial performance, dairy industry, by state, 2015–16 to 2017–18
average per farm
 Farm cash income  Farm business profit aRate of return excluding capital appreciation bRate of return including capital appreciation b
2015–162016–17p 2017–18y2015–162016–7p 2017–18y2015–162016–17p 2017–18y2015–162016–17p 
$$$$$$%%%%%
New South Wales184,950172,100(10)150,00057,45055,300(38)36,0002.62.3(18)1.86.44.9(26)
Victoria105,35053,700(54)118,000–39,120–43,700(83)31,0000.60.6(137)2.26.82.3(45)
Queensland137,550159,100(11)116,00063,78071,200(45)–4,0003.02.8(30)0.65.74.6(23)
Western Australia334,260374,000(11)312,000201,260262,700(21)202,0003.43.7(14)3.24.04.0(13)
South Australia131,710131,000(26)221,00018,47015,400(221)96,0002.11.8(39)3.12.97.8(28)
Tasmania133,79097,500(30)200,000–47031,700(84)106,0001.82.5(21)3.71.93.6(27)
Australia125,26089,600(22)137,000–9,950–8,300(301)41,0001.31.3(42)2.35.93.2(21)

a Defined as farm cash income plus build-up in trading stocks, less depreciation and the imputed value of operator, partner and family labour. b Rate of return to farm capital at 1 July. p Preliminary estimates. y Provisional estimates. na Not available.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

References

Jackson, T & Martin, P 2014, ‘Trends in the size of Australian farms’, in Agricultural commodities: September quarter 2014, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

Data and other resources

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About my region
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Last reviewed:
31 Oct 2018