Farm financial performance - Victoria

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

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Average farm cash incomes of broadacre farms in Victoria were at or above longer-term average levels in all regions and across all broadacre industry groups in 2017–18 (Table 1). Increases in receipts from sale of crops, sheep and wool offset the increases in total cash costs leading to a 17 per cent increase in farm cash income to an estimated $141,400 per farm.

In 2018–19 average farm cash incomes are projected to have declined in the main cropping regions of Mallee and Wimmera due to drought. In the Central North and Southern and Eastern Victoria, average farm cash incomes are projected to be largely unchanged in 2018–19 (Table 2). Higher revenues from sheep, lambs and wool are projected to offset higher purchased feed costs. Overall in 2018–19, average farm cash income for broadacre farms in Victoria is projected to have declined by 14 per cent to 122,000 per farm.

Figure 1 Real farm cash income, broadacre industries, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 1 Financial performance, all broadacre industries, Victoria, 2016–17 to 2018–19
average per farm
  Unit 2016–17 2017–18p RSE 2018–19y
Total cash receipts $ 365,570 405,900 (5) 379,000
Total cash costs $ 244,640 264,600 (5) 257,000
Farm cash income $ 120,930 141,400 (7) 122,000
Farms with negative farm cash income %   16   14 (28)   18
Farm business profit $ 76,830 44,100 (22) 10,000
Profit at full equity
    - excluding capital appreciation $ 105,190 75,100 (14) 41,000
    - including capital appreciation $ 314,650 220,900 (11) na
Farm capital at 30 June a $ 4,096,350 4,187,900 (4) na
Farm debt at 30 June b $ 383,680 411,600 (11) na
Change in debt - 1 July to 30 June b % 7 4 (57) na
Equity at 30 June bc $ 3,602,460 3,544,300 (5) na
Equity ratio bd %   90   90 (1) na
Farm liquid assets at 30 June b $ 161,610 173,300 (15) na
Farm management deposits (FMDs) at 30 June b $ 42,710 53,900 (15) na
Share of farms with FMDs at 30 June b %   25   25 (13) na
Rate of returne
    - excluding capital appreciation % 2.8 1.9 (12) 1.1
    - including capital appreciation % 8.4 5.6 (10) na
Off-farm income of owner manager and partner b $  64,920  61,400 (37) 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

Table 2 Farm cash income of Victorian broadacre farms, by region, 2016–17 to 2017–18
average per farm
ABARES region Unit 2016–17 2017–18p RSE 2018–19y
221: Mallee $ 211,500 226,000 (14) 162,000
222: Wimmera $ 188,100 263,000 (12) 136,000
223: Central North $ 60,000 114,000 (19) 121,000
231: Southern and Eastern Victoria $ 113,400 110,000 (13) 114,000

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Note: Each region is identified by a unique code of three digits. The first digit identifies the state or territory, the second digit identifies the zone and the third digit identifies the region. Source: ABARES
Table 3 Financial performance in Victoria, by industry, 2016–17 to 2018–19
average per farm
Industry Farm cash income ($) Proportion of farms (%)
2016–17 2017–18p RSE 2018–19y 2016–17 2017–18p 2018–19y
All broadacre industries 120,900 141,400 (7) 122,000 100 100 100
Wheat and other crops 308,800 335,100 (11) 131,000 12 14 15
Mixed livestock–crops 139,200 135,800 (22) 176,000 20 18 19
Sheep 104,000 157,300 (14) 163,000 22 26 27
Beef 67,290 50,800 (18) 51,000 40 35 35
Sheep–beef 101,400 150,500 (17) 171,000 6 7 5

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm cash income of wheat and other crops farms increased by 9 per cent to $335,100 in 2017–18 (Figure 2). Increased prices received for grains, legumes and oilseeds led to an increase in crop receipts despite a decline in areas planted. Total cash costs also increased in 2017–18 mainly as a result of increases in expenditure on fertiliser and crop and pasture chemicals.

Wheat and other crops farms in Victoria are expected to record a large reduction in average farm incomes in 2018–19 to an estimated $131,000 per farm. This is because of a substantial decrease in revenue as a result of drought.

Figure 2 Real farm cash income, wheat and other crops industry, 1998–99 to 2018–19
average per farm

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm cash income of mixed livestock–crops industry farms in Victoria declined to an estimated $135,800 per farm in 2017–18 (Figure 3). Incomes declined mainly because of reduced crop receipts as a result of lower crop production and reduced sales of beef cattle.

In 2018–19 the financial performance of mixed livestock–crops industry farms is projected to have increased by 29 per cent as a result of higher prices for wool and sheep together with projected declines in major cost items. Projected farm cash income is 62 per cent above the 10-year average to 2017–18.

Figure 3 Real farm cash income, mixed livestock–crops industry, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

In 2017–18 farm cash income for sheep industry farms increased by around 50 per cent to average $157,300 per farm as a result of increased receipts from sales of sheep, lambs and wool. Total cash costs also increased mainly as a result of substantial increases in purchased feed costs.

In 2018–19 farm cash income for Victorian sheep industry farms is projected to have increased further to average $163,000 per farm (Figure 4) as a result of projected increases in wool receipts due to higher wool prices, despite further increases in expenditure on fodder. Farm cash income is projected to be around 80 per cent above the 10-year average to 2017–18.

Figure 4 Real farm cash income, sheep industry, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Average farm cash incomes of Victorian beef industry farms decreased to $50,800 per farm in 2017–18. Total cash receipts declined mainly as a result of lower average beef cattle prices and a decline in the number of beef cattle sold.

In 2018–19 farm cash income of beef industry farms is projected to have been around $51,000 per farm (Figure 5). Receipts from the sale of cattle are projected to have increased outweighing a small increase in total cash costs. Average farm cash income is projected to be around 16 per cent above the 10–year average to 2017–18.

Figure 5 Real farm cash income, beef industry, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm cash income of sheep–beef farms in Victoria increased by 49 per cent in 2017–18 to average $150,500 (Figure 6). Total cash receipts increased as a result of increased number of beef cattle and sheep sold, higher wool production, and higher prices for sheep, lambs and wool. Total cash costs increased slightly, mainly as a result of increases in expenditure on rent, rates, fodder and fertiliser.

Farm cash income is projected to have increased further to $171,000 per farm in 2018–19 as a result of increased sheep, wool and beef receipts due to higher sheep, lamb and wool prices and projected increases in number of beef cattle sold, offsetting a projected increase in total cash costs.

Figure 6 Real farm cash income, sheep-beef industry, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Average farm cash income of Victorian dairy farms more than doubled to an average of $142,400 per farm (Figure 7) in 2017–18. This was driven by increases in farmgate milk prices and milk production.

For dairy farms in Victoria, the return to profitability in 2017–18 is expected to be short-lived. In 2018–19 average farm cash income is projected to have fallen by around half to an estimated $73,000 per farm (Table 4). Reduced milk production and markedly higher expenditure on purchased feed and water are the main drivers of the decline in farm cash income.

Figure 7 Real farm cash income, dairy industry, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Dairy Industry Survey
Table 4 Financial performance, Victorian dairy industry 2015–16 to 2017–18
average per farm
  Unit 2016–17 2017–18p RSE 2018–19y
Total cash receipts $ 626,090 747,700 (6) 705,000
Total cash costs $ 572,410 605,300 (5) 632,000
Farm cash income $ 53,680 142,400 (18) 73,000
Farms with negative farm cash income %   39   13 (47)   31
Farm business profit $ –43,710 90,400 (23) –68,000
Profit at full equity
    - excluding. capital appreciation $ 27,520 157,700 (13) -8,000
    - including capital appreciation $ 99,800 316,100 (17) na
Farm capital at 30 June a $ 4,478,040 5,004,700 (4) na
Farm debt at 30 June b $ 893,350 1,015,500 (8) na
Change in debt - 1 July to 30 June b % –4 0 (1691) na
Equity at 30 June bc $ 3,454,580 3,964,300 (5) na
Equity ratio bd %   80   80 (2) na
Farm liquid assets at 30 June b $ 125,080 95,000 (25) na
Farm management deposits (FMDs) at 30 June b $ 29,200 23,600 (65) na
Share of farms with FMDs at 30 June b %   18   15 (51) na
Rate of return e
    -  excluding. capital appreciation % 0.6 3.3 (14) –0.2
    - including capital appreciation % 2.3 6.5 (19) na
Off-farm income of owner manager and partner b $ 15,510 15,100 (24) 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 Dairy Industry Survey

Victoria had an estimated 446 vegetable-growing farms in 2017–18. Most farms were located around Greater Melbourne, Gippsland and the irrigated regions along the Murray River. The highest value vegetables were tomatoes, mushrooms, potatoes and lettuce (ABS 2019). Victorian vegetable-growing farms had the largest average area of vegetables cropped (63 hectares), with many large farms being located in the north of the state.

Farm cash income for Victorian vegetable-growing farms fell by 3 per cent to average $448,000 per farm in 2017–18 (Table 5). Total vegetable receipts declined due to lower yields for most vegetables reducing production. Decreased receipts from carrots contributed most to the decline in total vegetable receipts. Average total cash costs decreased by 10 per cent to $1,653,500 per farm. Reduced expenditure on contracts paid, packing materials and charges, freight, and repairs and maintenance contributed most to the decline in cash costs.

Average farm cash income is estimated to have declined by a further 7 per cent to $419,000 per farm in 2018–19 (Figure 8). This is because total cash costs are estimated to have increased by more than the small increase in total cash receipts.

Table 5 Selected physical and financial results, vegetable-growing farms, Victoria, 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 ($) 1,889,800 (19) –13 1,880,000 –0.5
Area planted to vegetables (ha) 63 (12) 0 62 –2
Quantity of vegetables produced (t) 2,174 (21) –10 2,170 –0.2
Farm cash income ($) 448,000 (22) –3 419,000 –7

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

p Preliminary estimate. y Provisional 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.

Last reviewed: 24 January 2020
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