Farm financial performance – Tasmania

Farm cash incomes increased slightly for Tasmanian broadacre farms in 2017–18 (Table 1) to $140,000 per farm mainly as a result of increased receipts for sheep, lambs and wool. Receipts from cereal grains also increased slightly due to higher prices and despite lower production as a result of dry seasonal conditions. An increase in receipts from non-broadacre crops on some farms, particularly potatoes, was also recorded.

In 2018–19 the financial performance of Tasmanian broadacre farms is projected to improve further (Figure 1), mainly as the result of an increase in lamb, wool and grain prices, slightly higher beef cattle turn-off and increased cereal crop production. Reduced planting and production of oilseed poppies is projected to partly offset increases in total cash receipts.

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 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

Farm cash income of Tasmanian mixed livestock–crops industry farms increased from $72,600 in 2016–17 to $306,000 in 2017–18 (Figure 2). Increased total cash receipts as a result of increased crop and wool production and higher grain, lamb and wool prices contributed to this substantial increase in farm cash income. Expenditure on all major cost items also increased as a result of increased production.

In 2018–19 increased cereal crop production, higher grain prices and higher lamb and wool prices is projected to result in further increases in farm cash income for Tasmanian mixed livestock–crops industry farms, on average (Table 2). Reduced planting and production of oilseed poppies is projected to result in lower overall crop receipts for some farms but this is expected to be offset by higher lamb and wool receipts. If achieved it would be the highest in over 20 years and 273 per cent higher than the 10-year average to 2017–18.

In 2017–18 farm cash income for sheep industry farms increased to average $146,000 per farm as a result of increased sales of lambs and sheep, increased wool production and high wool, lamb and sheep prices. Total cash costs also increased mainly as a result of increased expenditure on sheep purchases, crop and pasture chemicals and higher purchased feed prices due to dry seasonal conditions.

In 2018–19 farm cash income for Tasmanian sheep industry farms is estimated to increase further to average $204,000 per farm (Figure 3). If achieved it would be the second highest in over 20 years and 68 per cent higher than the 10-year average to 2017–18. This is a result of higher receipts for lambs, sheep and wool resulting from higher prices and increased sales of lambs and sheep, and increased wool production.

Average farm cash incomes of Tasmanian beef industry farms decreased from $128,700 to $100,000 per farm in 2017–18, as a result of declined receipts for beef cattle. Receipts from the sale of cattle declined because of decreases in saleyard prices for beef cattle. Despite this reduction, average farm cash income of Tasmanian beef industry farms was around 22 per cent above the 10–year average to 2016–17 of $83,500 per farm.

In 2018–19 farm cash income of Tasmanian beef industry farms is projected to increase slightly to an average of $111,000 per farm (Figure 4) as a result of increased beef cattle turn-off and a decline in total cash costs.

Farm cash income of Tasmanian sheep-beef farms increased by 31 per cent in 2017–18 to average $197,000 (Figure 5). Total cash receipts increased as a result of increased number of beef cattle sold and wool produced combined with higher prices for sheep, lamb and wool. Total cash costs declined slightly mainly as a result of decline in expenditure on hired labour and interest paid.

Farm cash income is projected to increase further to $263,000 per farm in 2018–19 as a result of higher sheep, lamb and wool prices and a projected decline in total cash costs.

Average farm cash income of Tasmanian dairy farms increased from an average of $97,460 per farm in 2016–17 to $282,200 in 2017–18 (Table 3). The increase in farm cash income was driven by increases in average farmgate milk prices and average milk production per farm. Higher milk receipts were partly offset by increased costs, mainly expenditure on fodder as a result of higher feed grain prices and expenditure on hired labour and repairs and maintenance.

Tasmania is the only state that produced more milk in 2017-18 than it did in 2001–02 when national milk production was at its peak. Tasmania is also the only state where the average farm cash income on dairy farms is projected to increase in 2018–19 compared with 2017–18 (Table 3). The projected increase is comparatively small however, from $282,000 per farm in 2017–18 to $301,000 in 2018–19 (Figure 6). If achieved this would be the highest farm cash income recorded by Tasmanian dairy farmers in 20 years. Increased milk production in 2018–19, a small increase in milk price and increased receipts from the sale of cattle are expected to more than offset higher costs, particularly increased expenditure on purchased feed as a result of higher feed grain prices and increased demand due to dry seasonal conditions in Tasmania in mid 2018–19.

In 2018–19 average farm business profit on Tasmanian dairy farms is projected to be lower than in 2017–18, but still strongly positive and well above the average for the 10 years ending 2017–18. The decline in average farm business profit in Tasmania (despite a modest increase in farm cash income) is caused by year-on-year differences in the absolute size of the ‘change in trading stocks’ component. For dairy farms, the size (and sign) of the change in trading stocks each year largely reflects differences between the opening and closing numbers of dairy cattle on hand. In 2017–18 the change in trading stocks on dairy farms in Tasmania was large and positive, reflecting a build-up in dairy cattle numbers during that year. This added substantially to the size of average farm business profit. In contrast, dairy cattle numbers are not expected to change much (on average) during 2018–19. As a result, the change in trading stocks (and its contribution to farm business profit) is much smaller than in the previous year.

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

Tasmania had an estimated 243 vegetable-growing farms in 2017–18. Most farms were located in the north of the state, along the coastal fringe, and the northern midlands. The highest value vegetables were potatoes, onions and carrots (ABS 2019).

Farm cash income for Tasmanian vegetable-growing farms declined by 31 per cent to $111,900 per farm in 2017–18 (Table 5). Total vegetable receipts decreased by 7 per cent as a result of lower vegetable prices. Lower potato, tomato and onion receipts were the main contributors to the decline in vegetable receipts. Total cash costs were relatively steady, mainly because of increased expenditure on interest paid, fuel, oil and grease and fertiliser partly offsetting increases in other expenditure items.

Average farm cash income is estimated to have increased by around 92 per cent to $215,000 in 2018–19 (Figure 7). Total vegetable receipts are estimated to have risen by around 25 per cent, primarily because of increases in potato receipts due to improved yields and prices. Average total cash costs are estimated to have increased by around 4 per cent in 2018–19.

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

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.