Farm financial performance — Northern Territory
Estimates of financial performance are available for beef farms in the Northern Territory.
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Performance of beef industry farms
Financial performance of beef industry farms in the Northern Territory has been strong in recent years. High prices for beef cattle and strong demand for live export cattle in northern Australia resulted in average farm cash income for Northern Territory beef farms being the highest recorded in over 20 years in 2015–16 and farm cash income remained high in 2016–17 (Figure 1).
Average farm cash income declined from $1.57 million per farm in 2016–17 to an average of $1.08 million in 2017–18 (Figure 1). Farm cash income declined due to lower beef cattle prices, reduced cattle turn-off and higher costs because of increased purchases of cattle. There was also an increase in transfers of cattle onto properties in the Northern Territory by entities operating multiple and interstate properties. Purchases and transfers resulted in increased beef cattle numbers, particularly on the Barkly Tableland where a substantial increase in value of cattle inventory and a rise in business profit was recorded. Farm cash income in 2017–18 was around 45 per cent above the 10-year average to 2016–17 of $722,000 per farm.
In 2018–19 dry seasonal conditions and sustained demand for cattle for live export is projected to result in increased turn-off of beef cattle from all Northern Territory regions and a rise in average farm cash income to $1.29 million.
Despite a small reduction in beef cattle prices and higher operating costs (fuel in particular) a moderate increase in average farm cash income is expected in all regions. Higher beef cattle turn-off is expected to result in a reduction in beef cattle numbers in most regions, leading to a decline in the value of cattle inventories and lower farm business profit in all regions in 2018–19.
average per farm
Source: ABARES Australian Agricultural and Grazing Industries Survey
The average financial performance of beef industry farms in the Northern Territory is heavily influenced by the performance of corporate farms with very large herds. These farms are found in all Northern Territory Regions, but predominantly in the Barkly and Victoria River–Katherine districts. These businesses dominate cattle turn-off and financial performance estimates for the Northern Territory and typically have results that are well above the average for other smaller herd size businesses in the region. Financial performance for these large farms is also highly variable from year to year.
Farm cash income of businesses with greater than 10,000 head of cattle averaged $2.5 million over the 10 years to 2016–17 with substantial variability between years. In 2017–18 average farm cash income of beef industry farms with greater than 10,000 head of cattle decreased by around 41 per cent to average $2.96 million per farm (Figure 2) as a result of a decline in the number of beef cattle turned off. Farm cash income is projected to increase by around 10 per cent in 2018–19 to average $3.25 million per farm as a result of increased receipts from turnoff of beef cattle and a slight decline in cash costs.
average per farm
Source: ABARES Australian Agricultural and Grazing Industries Survey
In contrast, farm cash income of businesses with fewer than 10,000 head of beef cattle averaged $122,000 per farm over the same period. Farm cash income of beef industry farms with fewer than 10,000 head of cattle decreased by around 42 per cent to average $211,800 per farm in 2017–18 (Figure 3) as a result of a decline in both the number of beef cattle turned off and the price of beef cattle. Farm cash income is projected to increase by 72 per cent in 2018–19 to average $364,000 per farm.
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
| Unit | 2016–17 | 2017–18p | RSE | 2018–19y | |
|---|---|---|---|---|---|
| Total cash receipts | $ | 3,570,280 | 3,356,200 | (11) | 3,508,000 |
| Total cash costs | $ | 2,000,660 | 2,281,700 | (12) | 2,219,000 |
| Farm cash income | $ | 1,569,610 | 1,074,500 | (21) | 1,288,000 |
| Farms with negative farm cash income | % | 5 | 28 | (33) | 16 |
| Farm business profit | $ | 1,481,180 | 1,454,600 | (16) | 1,119,000 |
| Profit at full equity | |||||
| - excluding capital appreciation | $ | 1,608,660 | 1,549,700 | (15) | 1,210,000 |
| - including capital appreciation | $ | 4,089,980 | 2,213,400 | (21) | na |
| Farm capital at 30 June a | $ | 30,747,670 | 31,281,200 | (10) | na |
| Farm debt at 30 June b | $ | 1,670,020 | 1,494,700 | (22) | na |
| Change in debt - 1 July to 30 June b | % | 0 | 0 | (769) | na |
| Equity at 30 June bc | $ | 12,365,460 | 12,670,700 | (10) | na |
| Equity ratio bd | % | 88 | 89 | (2) | na |
| Farm liquid assets at 30 June b | $ | 162,320 | 234,100 | (39) | na |
| Farm management deposits (FMDs) at 30 June b | $ | 16,830 | 37,400 | (57) | na |
| Share of farms with FMDs at 30 June b | % | 4 | 13 | (48) | na |
| Rate of returne | |||||
| - excluding capital appreciation | % | 5.7 | 5.2 | (11) | 3.9 |
| - including capital appreciation | % | 14.5 | 7.4 | (19) | na |
| Off-farm income of owner manager and partner b | $ | 18,730 | 18,600 | (34) | 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
p Preliminary estimate.
y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Source: ABARES
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.