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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Performance of broadacre farms

In 2018–19, the financial performance of Western Australian broadacre farms was the highest recorded in 40 years. Higher grain prices in 2018–19 and a large winter crop resulted in increased average farm cash incomes on most broadacre farms in the North and East Wheat Belt and the Central and South Wheat Belt regions. Farm cash incomes of sheep industry farms improved with higher wool and lamb prices in 2018–19. Beef industry farms in the pastoral regions of the Kimberley and Pilbara and Southern Rangelands regions recorded higher average farm cash incomes. This was as a result of increased turn-off of beef cattle in 2018–19 in response to dry seasonal conditions. In contrast, small beef industry farms located mainly in the South West region recorded lower average farm cash incomes in 2018–19, with reduced turn-off of cattle as farms rebuilt numbers after relatively high turn-off in 2017–18.

In 2019–20, the average farm cash income of Western Australian broadacre farms is projected to decline to $405,000 in 2019–20 as a result of reduced grain, oilseed and grain legume production, together with lower grain and wool prices (Figure 1, Table 1). This will be still around 34% above the average for the 10 years to 2018–19. Overall winter crop production declined by due to below average winter and spring rainfall together with well above average spring temperatures and frost events in southern cropping areas. Production of wheat, barley, canola and lupins fell substantially.

Farm cash incomes are expected to be lower in both the North and East Wheat Belt and the Central and South Wheat Belt regions due to lower crop and wool receipts (Table 2). In the beef cattle dominant regions of the Kimberley, Pilbara and Southern Rangelands, increased farm cash incomes are expected as a consequence of increased turn-off of beef cattle for both slaughter and live export and higher prices for beef cattle. Similarly, farm cash incomes are projected to increase in the South West region, mainly as a result of increased turn-off of beef cattle and higher prices.

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, Western Australia, 2017–18 to 2019–20
average per farm
Performance measure Unit 2017–18 2018–19p RSE 2019–20y
Total cash receipts $ 1,117,470 1,260,200 (5) 1,115,100
Total cash costs $ 689,230 762,600 (5) 710,100
Farm cash income $ 428,240 497,600 (7) 405,000
Farm business profit $ 248,540 325,930 (12) 133,300
Profit at full equity
 -  excluding capital appreciation $ 312,596 392,960 (10) 193,200
 -  including capital appreciation $ 448,308 555,870 (10) na
Farm capital at 30 June a $ 5,878,240 6,192,700 (6) na
Farm business debt at 30 June b $ 946,780 904,540 (11) 898,900
Change in debt - 1 July to 30 June b $ 25,340 –32,300 (96) 24,700
Farm business equity at 30 June bc $ 4,931,460 5,288,160 (7) na
Equity ratio bd %    84 85 (2) na
Farm liquid assets at 30 June b $ 265,610 315,200 (13) na
Rate of Return e
 -  excluding capital appreciation % 5.1 6.0 (9) 2.9
 -  including capital appreciation % 7.3 8.5 (10) na
Off-farm income of owner manager and partner b $ 30,030 16,800 (20) 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 Farm cash income, Western Australia, broadacre farms, by region, 2017–18 to 2019–20
average per farm
ABARES region a Unit 2017–18 2018–19p RSE 2019–20y
Kimberley $ 1,047,800 1,363,000 (24) 1,974,000
Pilbara and Southern Rangelands $ 616,400 737,000 (35) 918,000
Central and South Wheat Belt $ 544,000 570,000 (8) 434,000
North and East Wheat Belt $ 360,400 605,000 (15) 460,000
South West $ 126,600 110,000 (25) 136,000

a See Farm surveys definitions and methods web page for ABARES Australian Agricultural and Grazing Industries Survey (AAGIS) zones and regions map. p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 3 Financial performance, Western Australia, 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 428,200 498,000 (7) 405,000 100
Wheat and other crops 751,500 977,000 (9) 749,000 34
Mixed livestock–crops 407,200 337,000 (9) 235,000 23
Sheep a 140,240 158,200 (32) 143,000 30
Beef industry 264,000 304,000 (22) 407,000 12

a Sheep industry in Western Australia includes sheep farming (ANZIC code 0141) and sheep-beef cattle farming (ANZIC code 0144).Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of wheat and other crops industry farms

Farm cash income of wheat and other crops industry farms in Western Australia increased by 30% to average $977,000 per farm in 2018–19 (Table 3). Higher grain prices in 2018–19 and large winter crop production led to an increase in total cash receipts by 22% offsetting increases in all major cost components responding to increased winter crop production.

Farm cash income of wheat and other crops farms is projected to decline by 23% to average $749,000 per farm in 2019–20 reflecting projected reductions grain production and lower grain prices (Figure 2). Carry-over payments on grain delivered in 2018–19 will partially offset the impact of lower grain production on farm cash incomes. Total cash costs projected to decline by 7% as a result of decline in grain production. Average farm cash income of Western Australian wheat and other crops industry farms is projected to be around 35% above the 10–year average to 2018–19 of $556,000 per farm.

Figure 2 Farm cash income, wheat and other 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 mixed livestock–crops industry farms

Average farm cash income of mixed livestock–crops industry farms declined by 17% to an estimated $337,200 per farm in 2018–19 (Figure 3). Total cash receipts declined by 5% mainly as a result of reduced receipts from grain legumes and oilseeds, sheep and wool. Total cash costs increased by 4% as a result of large increases in seed, fodder, fertiliser and crop and pasture chemicals. Average farm cash income estimated for 2018–19 is around 43% above the 10–year average to 2017–18 of $240,000 per farm.

Average incomes of mixed livestock–crops industry farms are projected to decline by a further 30% to $235,000 per farm as a result of reduced receipts for grain due to drought, and lower receipts for wool due to lower wool prices. Total cash costs are projected to decline by 11% as a result of projected reductions in major cost components due to reduced production.

Figure 3 Farm cash income, mixed livestock–crops industry, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of sheep industry farms

Farm cash incomes of sheep industry farms in Western Australia increased by 13% in 2018–19 to average $158,200 per farm (Figure 4). Total cash receipts increased slightly to $384,900 as reduced receipts from the sale of sheep and beef as a result of reduced turn-off of sheep and beef cattle partly offsetting increased receipts from wool and crop sales. Average total costs also declined by 5% to around $226,700 per farms as a result of reduced expenditure on livestock purchases, seed and fodder.

Farm cash income of sheep industry farms in 2019–20 is projected to fall by a further 9% to average $143,000 per farm as a result of a projected decline in wool receipts due to lower prices for wool. Average farm cash income estimated for 2019–20 is projected to be around 44% above the 10–year average to 2018–19 of $100,000 per farm.

Figure 4 Farm cash income, sheep industry, 1999–2000 to 2019–20
average per farm
blank
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance of beef industry farms

Average farm cash income of beef industry farms increased by 15% to $304,000 per farm in 2018–19 (Figure 5). Total cash receipts increased by 10% mainly as a result of increased off-farm contracts and receipts from sales of sheep. Receipts from sales of beef cattle declined slightly due to reductions in beef cattle turn-off. Total cash costs also increased by 7% to average $498,500 per farm. Reductions in expenditure on beef cattle purchases partly offset the increases in other costs, mainly expenditure on fodder. Average farm cash income estimated for 2018–19 is around 66% above the 10–year average to 2017–18 of $186,000 per farm.

Farm cash income of beef farms is projected to increase by a further 34% in 2019–20 to average $407,000 per farm. Receipts from beef cattle sales are projected to increase by 20%, mainly as a result of increased turn-off of beef cattle and higher prices. Total cash costs are projected to increase by 6% in 2019–20.

Figure 5 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 dairy farms

Average farm cash income of Western Australia dairy farms declined by 19% to $243,000 per farm in 2018–19 (Figure 6). This was mainly a result of increased costs as drier seasonal conditions and higher feed grain prices resulted in increased fodder expenditure. Total cash receipts remained relatively unchanged. Farm cash income in 2018–19 is just below the 10-year average to 2017–18 of $251,000 per farm.

On average, dairy farmers in Western Australia are expected to record a further decrease in farm cash incomes in 2019–20 of around 6%. Receipts from milk are projected to decline slightly to $1,137,000 in 2019–20 as a result of lower milk production and reductions in milk prices received by some farms (Table 4). Farm costs are expected to increase, with expenditure on purchased fodder expected to remain high. Average farm business profit is expected to fall by more than the decrease in farm cash income as a result of a large decline in trading stocks.

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 4 Financial performance, dairy farms, Western Australia, 2017–18 to 2019–20
average per farm
Performance measure Unit 2017–18 2018–19p RSE 2019–20y
Total cash receipts $ 1,391,108 1,401,180 (7) 1,393,700
Total cash costs $ 1,092,873 1,158,200 (7) 1,165,600
Farm cash income $ 298,235 242,980 (12) 228,100
Farm business profit $ 171,309 84,100 (31) 48,900
Profit at full equity
 -  excluding capital appreciation $ 259,807 188,450 (14) 144,900
 -  including capital appreciation $ 292,504 131,130 (22) na
Farm capital at 30 June a $ 8,555,666 8,769,940 (6) na
Farm business debt at 30 June b $ 1,172,990 1,126,080 (12) 1,461,600
Change in debt - 1 July to 30 June b $ 47,523 22,430 (69) 106,600
Farm business equity at 30 June bc $ 7,382,676 7,643,860 (6) na
Equity ratio bd %    86 87 (2) na
Farm liquid assets at 30 June b $ 162,117 184,480 (41) na
Rate of Return e
 -  excluding capital appreciation % 2.7 2.0 (15) 1.5
 -  including capital appreciation % 3.1 1.4 (22) na
Off-farm income of owner manager and partner b $ 14,469 14,300 (47) 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 growing farms

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

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: 7 May 2020
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