Farm financial performance – New South Wales

Estimates of financial performance are available for all broadacre, beef, sheep, grains, dairy and vegetable farms in New South Wales.

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Performance of broadacre farms

Broadacre farms in New South Wales recorded substantial declines in profitability in 2018–19, with average farm cash incomes declining in all regions and for all industries. Average farm cash income of New South Wales broadacre farms declined to $80,900 per farm in 2018–19 as a result of decreased crop and livestock production (Table 1, Figure 1). Total cash receipts declined by 20% as a result of reduction crop and livestock production. Total cash costs were relatively unchanged at around $344,600 per farm. Expenditure on purchased feed increased by 171% mainly due to higher prices and increased quantity of feed purchased, offsetting declines in other major cost components in response to reduced production.

In 2019–20, farm cash income of broadacre farms in New South Wales is projected to fall further to average $21,000 per farm—the lowest recorded since 2006–07, in real terms (Table 3). Total cash receipts are projected to decline further as a result of low crop production and pasture growth and reduced sale of beef cattle and sheep.

For farms with livestock, incomes in 2019–20 continue to be adversely affected by high purchased fodder costs. However, total fodder expenditure is projected to decline as a result of reductions in herd and flock numbers and a small reduction in fodder prices.

Farm business profit is projected to be the lowest recorded for New South Wales in 40 years as a result of rundown of livestock and crop inventories.

In 2019–20 the Far West and North-West Slopes and Plains regions of New South Wales are expected to record the largest proportional declines in farm incomes compared with the previous year (Table 2). This follows substantial declines in average farm incomes in these regions in 2018–19.

Figure 1 Farm cash income, broadacre farms, 1999–2000 to 2019–20
average per farm
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p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
 
Table 1 Financial performance, broadacre farms, New South Wales, 2017–18 to 2019–20
average per farm
Performance measure Unit 201718 201819p RSE 201920y
Total cash receipts $ 528,924 425,550 (4) 319,300
less total cash costs $ 349,436 344,640 (4) 298,100
Farm cash income $ 179,487 80,910 (12) 21,300
Farm business profit $ 6,399 –120,580 (8) –142,600
Profit at full equity
 -  excluding capital appreciation $ 41,495 –85,100 (11) –107,100
 -  including capital appreciation $ 342,041 104,680 (30) na
Farm capital at 30 June a $ 5,477,431 5,756,360 (4) na
Farm business debt at 30 June b $ 641,910 626,910 (7) 717,900
Change in debt – 1 July to 30 June b $ 53,164 30,310 (44) 61,200
Farm business equity at 30 June bc $ 4,835,521 5,129,450 (5) na
Equity ratio at 30 June bd %    88 89 (1) na
Farm liquid assets at 30 June b $ 242,660 169,620 (11) na
Rate of Return
 -  excluding capital appreciation % 0.8 –1.4 (12) –1.8
 -  including capital appreciation % 6.5 1.8 (30) na
Off-farm income $ 39,575 40,790 (12) 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 errors expressed as a percentage of the estimate provided. na Not available.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 2 Farm cash income, New South Wales, broadacre farms, by region, 2017–18 to 2019–20
average per farm
ABARES region a Unit 2017–18 2018–19p RSE 2019–20y
Far West $ 265,600 27,000 (195) –14,000
North West Slopes and Plains $ 256,000 –3,000 (702) –90,000
Central West $ 172,500 63,000 (29) 21,000
Riverina $ 209,000 196,000 (13) 93,000
Tablelands $ 146,900 70,000 (30) 24,000
Coastal $ 14,500 10,000 (82) 36,000

a See Farm surveys definitions and methods web page for ABARES Australian Agricultural and Grazing Industries Survey (AAGIS) zones and regions map. p Preliminary estimates. y Provisional estimates. RSE Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 3 Financial performance, New South Wales, by industry, 2017–18 to 2019–20
average per farm

Industry
Farm cash income ($) Proportion of farms (%)
2017–18 2018–19p RSE 2019–20y 2018–19p
All broadacre farms 179,500 81,000 (15) 21,000 100
Wheat and other crops 416,800 146,000 (33) –66,000 10
Mixed livestock–crops 225,300 127,000 (23) 41,000 15
Sheep 116,200 98,000 (17) 70,000 25
Beef 90,500 27,000 (99) –12,000 31
Sheep–beef 230,700 78,000 (34) 44,000 19

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

Performance of wheat and other crops industry farms

Farm cash income of wheat and other crops industry farms declined by 66% to average of $142,200 per farm in 2018–19 as a result of declines in crop production due to dry seasonal conditions (Figure 2). Total cash receipts declined by 43% as a result of declines in receipts from selling crops. All major cost components also declined in 2018–19 causing total cash costs to decline by 32% to average $627,900 per farm.

In 2019–20, average farm cash income of wheat and other crops industry farms is projected to decline to negative $66,000 per farm, driven mainly by very low farm cash incomes of cropping farms in the North West Slopes and Plains and Far West regions.

Figure 2 Farm cash income, wheat and other crops industry, 1999–2000 to 2019–20
average per farm
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p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of mixed livestock–crops industry farms

Average farm cash income of mixed livestock–crops industry farms declined by 44% to an estimated $127,100 per farm as a result of declines in both crop and livestock receipts due to drought (Figure 3). All major cost components also declined in 2018–19 causing total cash costs to decline by 10%. Decline in total cash costs receipts partly offset the decline in total cash receipts leading to the decline in farm cash income.

In 2019–20 average farm cash income is projected to have declined by a further 68% to $41,000 per farm, due mostly to lower crop and livestock production as a result of continuing dry conditions despite projected declines in total cash costs. Farm cash income in 2019–20 is projected to be 76% below the 10-year average to 2018–19.

Figure 3 Farm cash income, mixed livestock–crops industry, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of sheep industry farms

In 2018–19, farm cash income of sheep industry farms declined by 16% to average $98,000 per farm (Figure 4). Increased receipts from selling sheep and wool as a result of higher sheep turn-off and wool production were offset by substantial increases in expenditure on purchased feed.

Average farm incomes of sheep industry farms in New South Wales are projected to be 30% lower in 2019–20. This was a result of lower wool prices, reduced wool production, lower wool cuts per head combined with lower receipts as a result of reduced turn-off of sheep and lambs. Farm cash income in 2019–20 is projected to be 35% below the 10-year average to 2018–19.

Figure 4 Farm cash income, sheep industry, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of beef industry farms

Average farm cash income of New South Wales beef industry farms declined by 70% to $27,400 in 2018–19 (Figure 5). Total cash receipts declined despite very high turn-off of beef cattle. Total cash costs increased substantially as a result of increased expenditure on purchased feed.

In 2019–20 average farm cash income is projected to decline by a further 143% to negative $12,000 per farm mostly due to projected declines in beef cattle turn-off. This projected farm cash income is around 120% below the 10-year average to 2018–19 of $60,000 per farm.

Figure 5 Farm cash income, beef industry, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of sheep–beef industry farms

Farm cash income of sheep–beef farms declined by 66% per cent in 2018–19 to an average of $78,300 per farm as a result increased receipts from selling beef, sheep, lambs and wool (Figure 6). Total cash costs also increased by 10% due to significant increases in expenditure on purchased feed.

Average farm cash income of sheep–beef industry farms is projected to decline by 43% to average $44,000 in 2019–20. Expenditure on fodder is projected to decline as a result of the reductions in herd and flock numbers and a small reduction in fodder prices. This average farm cash income is projected to be 64% below the 10-year average to 2018–19 of $125,000.

Figure 6 Farm cash income, sheep–beef industry, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of dairy farms

Average farm cash income of New South Wales dairy farms declined by 28% to average $131,000 in 2018–19 (Figure 7). This was around 21% below the 10-year average to 2017–18.Total cash receipts rose by 10% on average because of higher milk prices and increased milk production. Total cash costs also increased mainly as a result of increased expenditure on fodder, water and hired labour (Table 4).

For the New South Wales dairy industry, average farm cash income is projected to increase by 24% to $162,000 in 2019–20. This will be slightly below the average for the 10 years to 2018–19. Farmgate milk prices are expected to be higher, leading to an increase in milk receipts and more than offsetting a reduction in average milk production per farm. Overall, New South Wales milk production is projected to fall in 2019–20, mostly the result of the exit of farms from dairying. However, a reduction in milk production is also expected on some farms remaining in dairying. In addition, continued dry seasonal conditions and high prices for hay, silage and feed grains have maintained purchased feed costs at a high level—a major expense for this industry—and have constrained the overall increase in average farm cash income.

Figure 7 Farm cash income, dairy farms, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Dairy Industry Survey
 
Table 4 Financial performance, dairy farms, New South Wales, 2017–18 to 2019–20
average per farm
Performance measure Unit 2017–18 2018–19p RSE 2019–20y
Total cash receipts $ 1,039,483 1,144,180 (4) 1,127,300
Total cash costs $ 861,312 1,013,290 (4) 965,100
Farm cash income $ 178,171 130,900 (20) 162,200
Farm business profit $ 45,921 –34,530 (88) –2,300
Profit at full equity
 -  excluding capital appreciation $ 123,083 40,840 (71) 63,700
 -  including capital appreciation $ 321,051 46,180 (99) na
Farm capital at 30 June a $ 5,736,445 6,435,250 (7) na
Farm business debt at 30 June b $ 1,051,857 1,129,620 (12) 1,101,700
Change in debt - 1 July to 30 June b $ –40,949 52,650 (55) 76,400
Farm business equity at 30 June bc $ 4,684,588 5,305,630 (8) na
Equity ratio bd %    82 82 (3) na
Farm liquid assets at 30 June b $ 273,081 235,070 (39) na
Rate of Return e
 -  excluding capital appreciation % 2.2 0.6 (71) 1.0
 -  including capital appreciation % 5.6 0.7 (99) na
Off-farm income of owner manager and partner b $ 17,520 22,840 (19) 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 errors expressed as a percentage of the estimate provided. na Not available.
Source: ABARES Australian Dairy Industry Survey

Performance of vegetable industry farms

New South Wales had an estimated 580 vegetable-growing farms in 2017–18. Most farms were in Greater Sydney, the Murrumbidgee Irrigation Area and the Far North Coast. The highest value vegetables were mushrooms, potatoes, tomatoes and melons (ABS 2019). New South Wales had the smallest average area operated (108 hectares) and area of vegetables cropped (22 hectares). This is mainly because of the relatively high proportion of farms in the Greater Sydney region which are typically small ‘market garden’ type growers.

In 2017–18, average farm cash income for New South Wales vegetable-growing farms increased by an estimated 19 per cent to $204,200 per farm (Table 5). Total vegetable production per farm increased as a result of a rise in average area planted to vegetables. Average total cash costs increased by 17 per cent to around $408,500 per farm. Contracts paid, freight, hired labour and seed costs were the largest contributors to the increase in total cash costs in 2017–18.

Average farm cash income is estimated to have increased by a further 28 per cent in 2018–19 to $261,000 per farm (Figure 8), mainly because of an increase in average vegetable prices and quantity of vegetables sold.

Table 5 Selected physical and financial results, Australian vegetable-growing farms, New South Wales, 2017–18 and 2018–19
average per farm
Indicator 2017–18p RSE % change from 2016–17 2018–19y % change from 2017–18
Vegetable cash receipts ($) 548,800 (71) 15 624,000 14
Area planted to vegetables (ha) 22 (10) 19 21 –7
Quantity of vegetables produced (t) 606 (23) 13 608 0.3
Farm cash income ($) 204,200 (83) 19 261,000 28

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

Figure 8 Farm cash income, vegetable-growing farms, 2007–08 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: Australian vegetable-growing farms survey

Definitions

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.

Last reviewed: 5 May 2020
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