Farm financial performance – Western Australia

​Estimates of financial performance are available for all broadacre, dairy and vegetable farms in Western Australia.

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Overall financial performance of Western Australian broadacre farms remained strong in 2017–18, declining slightly compared with 2016–17 but maintaining the trend of high farm cash incomes that began in 2013–14 (Figure 1 and Table 1). Higher grain prices and carry-over payments on grain delivered in 2016–17 mostly offset the impact on farm cash incomes of lower grain production in 2017–18 compared with the record 2016–17 crop. Farm cash incomes were also maintained by higher wool prices in 2017–18.

In 2018–19 the financial performance of Western Australian broadacre farms is projected to increase further as a result of increased wheat production compared with 2017–18, high grain prices (particularly for barley) and higher wool prices. Overall, average farm cash income for Western Australian broadacre farms is projected to increase to $490,000 in 2017–18—the highest recorded for Western Australian broadacre farms in real terms since ABARES commenced the AAGIS survey in 1977–78.

Regional differences in farm performance are expected in 2018–19. Farm cash incomes are expected to be higher in the North and East Wheat Belt and the Central and South Wheat Belt due mainly to higher overall crop receipts (Table 2). Increased farm cash incomes are also expected in the beef cattle dominant regions of the Kimberly, Pilbara and Southern Rangelands, largely as a consequence of increased turn-off of beef cattle for both slaughter and live export. In contrast, farm cash incomes are projected to decline slightly in the South West region, mainly as a result of lower prices for beef cattle and increased purchased feed costs.

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, Western Australia, 2016–17 to 2018–19
average per farm
  Unit 2016–17 2017–18p RSE 2018–19y
Total cash receipts $ 1,090,440 1,081,200 (6) 1,259,000
Total cash costs $ 711,540 712,400 (6) 769,000
Farm cash income $ 378,900 368,800 (9) 490,000
Farms with negative farm cash income %   7   12 (31)   9
Farm business profit $ 233,140 184,500 (17) 304,000
Profit at full equity
    - excluding capital appreciation $ 301,400 251,300 (13) 373,000
    - including capital appreciation $ 417,660 422,000 (15) na
Farm capital at 30 June a $ 5,959,170 6,316,400 (5) na
Farm debt at 30 June b $ 985,260 996,800 (10) na
Change in debt - 1 July to 30 June b % 0 3 (89) na
Equity at 30 June bc $ 4,623,300 4,867,200 (6) na
Equity ratio bd %   82   83 (2) na
Farm liquid assets at 30 June b $ 243,510 237,500 (14) na
Farm management deposits (FMDs) at 30 June b $ 100,140 134,400 (18) na
Share of farms with FMDs at 30 June b %   31   41 (12) na
Rate of return e
    - excluding capital appreciation % 5.3 4.2 (11) 5.9
    - including capital appreciation % 7.4 7.0 (13) na
Off-farm income of owner manager and partner b $ 25,120 29,600 (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 Western Australia broadacre farms, by region, 2016–17 to 2018–19
average per farm
ABARES region Unit 2016–17 2017–18p RSE 2018–19y
511: Kimberley $ 1,514,700 902,000 (44) 1,771,000
512: Pilbara and Southern Rangelands $ 738,700 613,000 (24) 683,000
521: Central and South Wheat Belt $ 421,000 460,000 (12) 556,000
522: North and East Wheat Belt $ 423,200 335,000 (18) 630,000
531: South West $ 128,900 106,000 (24) 93,000

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 Western Australia, by industry, 2016–17 to 2018–19
average per farm
Industry/region Farm cash income ($) Proportion of farms (%)
2016–17 2017–18p RSE 2018–19y 2016–17 2017–18p 2018–19y
All broadacre industries 378,900 368,800 (9) 490,000 100 100 100
Wheat and other crops 697,800 573,100 (14) 829,000 32 36 38
Mixed livestock–crops 322,700 392,600 (13) 363,000 22 25 23
Sheep 136,150 126,300 (30) 187,000 32 26 23
Beef 300,300 254,800 (19) 257,000 14 13 15

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

Farm cash income of wheat and other crops farms declined by 18 per cent to an estimated $573,100 per farm in 2017–18 (Figure 2). Total cash receipts declined as a result of lower crop production. Receipts from selling grain legumes partially offset the decline in other crop receipts. Total cash costs also declined as a result of reduced areas planted to wheat and other crops.

The financial performance of farms in the wheat and other crops industry in 2018–19 is projected to increase reflecting high grain prices and increased wheat production, particularly in the North and East Wheat Belt regions. Total cash costs are projected to increase marginally due to increased expenditure on oil, fuel and grease, and repairs and maintenance.

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

Average farm cash income of mixed livestock–crops industry farms increased to an estimated $392,600 per farm in 2017–18 mainly as a result of increased crop and livestock receipts (Figure 3). Total cash costs increased by 22 per cent as a result of large increases in major cost items, partly offsetting increases in receipts.

Average incomes for mixed livestock–crops industry farms are projected to decline slightly to $351,000 as a result of reduced grain legume and oilseed production and lower turn-off of sheep, particularly for live export.

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 declined by 7 per cent to average $126,300 per farm despite higher sheep, lamb and wool prices. Total cash costs increased considerably as a result of increases in expenditure on purchased feed, fertiliser, shearing, and handing and marketing.

In 2018–19 farm cash income for Western Australian sheep industry farms is projected to increase to average $187,000 per farm (Figure 4) as a result of further increases in wool, lamb and sheep prices combined with increased production despite a reduction in sheep turn-off. This is projected to be the highest average farm cash income for Western Australian sheep industry farms in 20-years, around 108 per cent higher than 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 income of beef industry farms declined to $254,800 per farm in 2017–18 mainly as a result of higher purchased feed, despite a slight increase in the number of cattle sold and receipts from sale of beef cattle.

In 2018–19 farm cash income of beef industry farms is projected to increase marginally to average $257,000 per farm (Figure 5) as a result of a fall in total cash costs. Average farm cash income estimated for 2018–19 is still around 41 per cent above the 10–year average to 2017–18 of $182,800 per farm.

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

Average farm cash income of Western Australia dairy farms declined by 21 per cent to $301,000 per farm in 2017–18 (Table 4). This was mainly a result of increased costs as drier seasonal conditions and higher feed grain prices resulted in increased fodder expenditure. Farm cash income in 2017–18 is estimated to be around 40 per cent above the 10-year average to 2016–17 of $219,000 per farm.

On average, farm cash income of dairy farmers in Western Australia is expected to record a further 29 per cent decline in 2018–19 (Figure 6). Milk production and milk receipts are projected to decrease slightly in 2018–19 (by around 1 per cent on average), while costs are expected to increase by around 2 per cent. Most of this increase is due to higher expenditure on purchased feed.

Average farm business profit is expected to fall by more than the decrease in farm cash income. This is because farmers are not expected to expand their dairy herds in 2018–19 (on average), so the projected change in trading stocks is close to zero. This is in contrast to both 2016–17 and 2017–18, when increases in dairy cattle numbers led to relatively large positive values for the change in trading stocks, adding substantially to average farm business profit in those years.

Figure 6 Real farm cash income, dairy industry, 1998–99 to 2018–19
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 4 Financial performance, Western Australia dairy industry 2016–17 to 2018–19
average per farm
  Unit 2016–17 2017–18p RSE 2018–19y
Total cash receipts $ 1,424,330 1,393,900 (7) 1,325,000
Total cash costs $ 1,050,340 1,092,900 (8) 1,110,000
Farm cash income $ 373,980 301,000 (11) 215,000
Farms with negative farm cash income %   1   5 (75)   14
Farm business profit $ 262,750 174,000 (22) 56,000
Profit at full equity
    - excluding capital appreciation $ 364,030 262,500 (14) 144,000
    - including capital appreciation $ 399,530 431,400 (43) na
Farm capital at 30 June a $ 9,869,480 9,301,300 (6) na
Farm debt at 30 June b $ 1,171,720 1,173,800 (15) na
Change in debt - 1 July to 30 June b % –4 4 (90) na
Equity at 30 June bc $ 8,308,600 7,506,500 (5) na
Equity ratio bd %   88   87 (2) na
Farm liquid assets at 30 June b $ 192,680 162,100 (41) na
Farm management deposits (FMDs) at 30 June b $ 68,910 64,600 (39) na
Share of farms with FMDs at 30 June b %   28   28 (33) na
Rate of return e
    - excluding capital appreciation % 3.7 2.8 (15) 1.6
    - including capital appreciation % 4.0 4.5 (37) na
Off-farm income of owner manager and partner b $ 13,490 14,500 (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

Western Australia had an estimated 193 vegetable-growing farms in 2017–18. Most farms were located near Perth, Busselton and Pemberton with some further north near Geraldton and Carnarvon. The highest value vegetables were carrots, potatoes, onions and melons (ABS 2019).

Farm cash income for Western Australian vegetable-growing farms declined by 28 per cent to around $237,700 per farm in 2017–18 (Table 5). Total vegetable receipts declined by 13 per cent as a result of declines in receipts for lettuce, tomatoes and potatoes. Total cash costs decreased by around 10 per cent, driven by a decline in expenditure on packing materials and charges, freight, hired labour and interest paid.

Average farm cash income is estimated to have declined by 17 per cent to $198,000 per farm in 2018–19 (Figure 7). Total vegetable receipts are expected to have declined slightly because of a projected fall in total vegetable production. A number of farms in Western Australia had significantly reduced vegetable production in 2018–19. Many of these farms were either exiting vegetable production completely or were in the process of shifting to other horticultural crops.

Table 5 Selected physical and financial results, vegetable-growing farms, Western Australia, 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 ($) 937,800 (55) –13 916,000 –2
Area planted to vegetables (ha) 39 (54) 31 34 –14
Quantity of vegetables produced (t) 1,393 (59) 51 1,159 –17
Farm cash income ($) 237,700 (48) –28 198,000 –17

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
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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