Farm financial performance – Tasmania

Estimates of financial performance are available for all broadacre, beef, sheep, dairy and vegetable farms in Tasmania.

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Performance of broadacre farms

Farm cash incomes of Tasmanian broadacre farms increased in 2018–19 by 10% to average $166,600 per farm, mainly due to increased turn-off of sheep, higher prices for sheep, lambs and wool, and increased production of grain (Figure 1). An increase in receipts from non-broadacre crops, particularly potatoes, was also recorded. Total cash costs also increased by 23% to $389,400 per farm mainly as a result of increased expenditure on sheep purchases and fertiliser (Table 1).

In 2019–20 farm cash income of Tasmanian broadacre farms is projected to increase to $183,000 per farm, due to higher beef cattle and sheep turn-off in response to drier seasonal conditions during 2019 (Table 2). Average farm business profit is expected to fall in 2019–20 as a result of a run-down in livestock numbers.

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, Tasmania, 2017–18 to 2019–20
average per farm
Performance measure Unit 2017–18 2018–19p RSE 2019–20y
Total cash receipts $ 467,832 555,960 (7) 571,400
Total cash costs $ 316,858 389,380 (7) 388,500
Farm cash income $ 150,975 166,570 (12) 182,900
Farm business profit $ 97,849 116,660 (17) 99,700
Profit at full equity
 -  excluding capital appreciation $ 133,082 161,220 (13) 143,800
 -  including capital appreciation $ 202,237 863,240 (52) na
Farm capital at 30 June a $ 4,629,086 6,002,110 (13) na
Farm business debt at 30 June b $ 639,266 857,090 (13) 947,500
Change in debt - 1 July to 30 June b $ 83,206 82,640 (62) 85,700
Farm business equity at 30 June bc $ 3,989,820 5,145,020 (15) na
Equity ratio bd %    86 86 (3) na
Farm liquid assets at 30 June b $ 187,241 196,740 (17) na
Rate of Return e   
 -  excluding capital appreciation % 3.0 3.1 (14) 2.4
 -  including capital appreciation % 4.5 16.6 (49) na
Off-farm income of owner manager and partner b $ 31,519 36,000 (23) 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 Financial performance, Tasmania, 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 151,000 167,000 (13) 183,000 100
Mixed livestock–crops 302,600 378,000 (18) 514,000 11
Sheep 141,100 208,000 (13) 215,000 29
Beef industry 113,300 112,000 (31) 85,000 42
Sheep-beef 230,300 99,000 (70) 169,000 17

p Preliminary estimate. y Provisional estimate. 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 mixed livestock–crops industry farms

Farm cash income of Tasmanian mixed livestock–crops industry farms increased from $302,600 in 2017–18 to $378,000 in 2018–19 (Table 2). Total cash receipts declined by 19% as a result of declines in receipts from selling crops and sheep. Receipts from selling beef cattle increased as a result of increased beef cattle turn-off partly offsetting declines in total cash receipts. A decline in total cash costs due to reduced crop production contributed to this increase in farm cash income.

In 2019–20, projected increases crop receipts together with higher lamb prices are projected to result in higher farm cash income of Tasmanian mixed livestock–crops industry farms, on average (Figure 2). Reduced planting and production of oilseed poppies is projected to be offset by higher receipts from fodder and vegetables.

Figure 2 Farm cash income, mixed livestock–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 sheep industry farms

Farm cash income of Tasmanian sheep industry farms increased by 47% to $208,000 in 2018–19, mainly due to increased turn-off of sheep, higher prices for sheep, lambs and wool, and increased production of grain (Figure 3). Total cash costs also increased by 81% as a result of increased crop and sheep production.

Average farm cash incomes for sheep industry farms in 2019–20 is projected to increase slightly as a result of projected increases in sheep turn-off and lamb prices. However, average farm business profit is projected to decrease in 2019–20.

Figure 3 Farm cash income, sheep 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 beef industry farms

Average farm cash incomes of Tasmanian beef industry farms remained relatively unchanged at $112,400 per farm in 2018–19 (Figure 4). Average total cash receipts increased by 7% as a result of increased sale of cattle. Average total cash costs also increased by 11% as a result of increased expenditure on fertiliser, interest and freight offsetting increases in total receipts.

In 2019–20, farm cash income of Tasmanian beef industry farms is projected to decline by a further 24% to $85,000 per farm. Average total cash receipts are projected to increase by 3% as a result of increases in beef cattle turn-off. Average total cash costs are also projected increase by 16%. Average farm cash income of Tasmanian beef industry farms is projected to be around 12% below the 10–year average to 2018–19 of $97,000 per farm.

Figure 4 Farm cash income, beef 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 sheep-beef industry farms

Farm cash income of Tasmanian sheep-beef farms declined by 57% in 2018–19 to average $99,000 (Figure 5). Total cash receipts declined by 30% as a result of the decline in the number of sheep and beef cattle sold. Total cash costs declined by 17% as a result of a decline in all major cost components due to reduced production.

In 2019–20, farm cash income of sheep–beef industry farms is projected to increase by 71% to $169,000 per farm as a result of projected increases in total cash receipts due to increased beef cattle and sheep turn-off and a projected decline in total cash costs.

Figure 5 Farm cash income, sheep-beef 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 dairy farms

Average farm cash income of dairy farms fell substantially to $135,000 in 2018–19 as a result of an increase in expenditure on fodder (Figure 6). Total cash receipts increased slightly by 3% as a result of a small increase in milk price. Average farm cash income of Tasmanian dairy farms is around 52% below the 10–year average to 2018–19 of $164,000 per farm. Average farm business profit also declined as a result of the decline in farm cash income and trading stocks.

Average farm income is projected to increase in 2019–20 as a result of higher milk prices and a small increase in milk production. Total cash receipts are projected to increase by 3%. Total cash costs are projected to decline by around 2% (Table 3). However, fodder costs are expected to remain high due to the persistent effects of the mainland drought on hay and feed grain prices.

Figure 6 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 3 Financial performance, dairy farms, Tasmania, 2017–18 to 2019–20
average per farm
Performance measure Unit 2017–18 2018–19p RSE 2019–20y
Total cash receipts $ 1,198,606 1,254,850 (6) 1,318,300
Total cash costs $ 916,438 1,119,400 (7) 1,113,100
Farm cash income $ 282,168 135,450 (41) 205,100
Farm business profit $ 215,825 27,300 (99) 112,800
Profit at full equity
 -  excluding capital appreciation $ 316,659 150,830 (41) 232,000
 -  including capital appreciation $ 219,767 214,540 (39) na
Farm capital at 30 June a $ 5,553,272 6,149,880 (6) na
Farm business debt at 30 June b $ 1,631,439 2,224,490 (13) 2,306,700
Change in debt - 1 July to 30 June b $ –50,538 285,360 (76) 112,600
Farm business equity at 30 June bc $ 3,921,833 3,925,390 (11) na
Equity ratio bd %    71 64 (7) na
Farm liquid assets at 30 June b $ 37,055 18,310 (48) na
Rate of Return e
 -  excluding capital appreciation % 5.5 2.4 (41) 3.7
 -  including capital appreciation % 3.8 3.4 (37) na
Off-farm income of owner manager and partner b $ 12,179 25,520 (68) 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

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.

Table 5 Selected physical and financial results, vegetable-growing farms, Tasmania, 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 ($) 400,700 (63) –7 501,000 25
Area planted to vegetables (ha) 30 (8) 1 33 9
Quantity of vegetables produced (t) 1,510 (12) –2 1,689 12
Farm cash income ($) 111,900 (55) –31 215,000 92

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 7 Farm cash income, vegetable-growing farms, 2007–08 to 2018–19
average per farm
Shows farm cash income for vegetable industry farms in Australia and Tasmania from   2005–06 to 2015–16 in 2015–16 dollars. Farm cash income has been consistently positive. The figure is discussed in the previous paragraphs.
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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