Australian broadacre farm incomes at record high
7 March 2017
Farm cash income for Australian broadacre farms is projected to average $216,000 per farm in 2016–17, the highest recorded in the past 20 years.
ABARES Economist Tom Jackson said the forecast followed record winter grain production, high prices for beef cattle and good prices for sheep, lamb and wool.
“When broadacre farms are separated into the beef, sheep and cropping sectors, it’s clear that farms in all three of these sectors have had a very good run in the past few years,” Mr Jackson said.
Average farm cash income for cropping farms is forecast to rise 25 per cent to $398,000 per farm in 2016–17.
“Farm cash income is expected to rise 27 per cent for sheep farms to average $133,000 per farm, and 2 per cent for beef farms to average $163,000 per farm.
“All three sectors are forecast to have the highest average farm cash income recorded in the past 20 years.”
Beef prices have nearly doubled in real terms over the past three years to levels not seen since the late 1970s. Lamb prices have also been growing strongly, increasing by around 50 per cent over the past four years.
“When you add in relatively high wool prices, this explains why sheep returns are the best we’ve seen for the past 20 years, and why sheep farms are continuing to do as well as beef farms, even during a boom in cattle prices,” Mr Jackson said.
“However, not every industry is performing as strongly. Farm cash income for dairy farms is projected to decrease to average $105,000 a farm in 2016–17.
“This is around 13 per cent below the average for the ten years to 2015–16 and results from lower milk production and continued low farmgate milk prices.”
Mr Jackson said that overall, the forecasts demonstrated that Australian agriculture was a strong and resilient sector, with farms continually innovating, investing and getting better at what they do.
“The investment that farmers are making in innovation and productivity will become increasingly important as global competition increases,” Mr Jackson said.
The analysis was presented at ABARES Outlook 2017, held in Canberra on Tuesday 7 and Wednesday 8 March. Australia’s leading forum for public and private decision-makers in agriculture, Outlook marks its 47th annual conference this year with expert analysis of innovation in agriculture.