2019–20 to 2021–22
- An estimated 18% of Australian farm businesses are classified as cropping farms (16,000 farms), of which 7,500 are specialist cropping farms and around 8,900 are mixed livestock-cropping farms (see Methodology).
- Very good seasonal conditions and high commodity prices in 2021–22 were the major drivers of strong farm financial performance for cropping farms across Australia, with timely rainfall in 2021 leading to a near record winter crop in most regions.
- At the national level, farm cash income for cropping farms is estimated to have increased by around 28% to average $619,000 per farm in 2021–22. The increase in income is mainly due to higher receipts from wheat, barley and oilseeds. Increased expenditure on fuel and fertiliser is estimated to have partially offset record gains in crop receipts, but the full effect of higher input costs is likely to be felt in 2022–23 (Figure 1). The timing of purchases of inputs and sales of crops during the year is likely to have influenced the results observed on individual farms given the fluctuations occurring in the market.
- The average farm cash income for cropping farms in 2021–22 is estimated to have been around 76% above the long-term average of $352,000 per farm in real terms for the 10 years to 2020–21.
- The percentage of cropping farms with negative net income in 2021–22 is estimated to have been around 10% (Figure 2).
- In 2021–22, the average rate of return for cropping farms (excluding capital appreciation) is estimated to have been 4.3%, above the 10-year average of 3.3%.
- Farm cash incomes for cropping farms are expected to have increased in 2021–22 in Western Australia (125%) and South Australia (5%), but to have declined in Tasmania (–60%), New South Wales (–13%), Victoria (–3%) and Queensland (–2%).
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Figure 1 Farm cash income, cropping farms, Australia, 2010–11 to 2021–22
average per farm
Source: ABARES Australian Agricultural and Grazing Industries Survey
Figure 2 Distribution of farm cash income by quartile, cropping farms, Australia, 2017–18 to 2021–22
Source: ABARES Australian Agricultural and Grazing Industries Survey
Specialist cropping farms
- The average farm cash income for specialist cropping farms at the national level is estimated to have been around $897,000 per farm in 2021–22, around 89% above the average in real terms for the previous 10 years (Map 1).
- Although remaining strong, incomes in 2021–22 for specialist cropping farms in Queensland, southern New South Wales and parts of South Australia were below the long term average.
- The average rate of return (excluding capital appreciation) for specialist cropping farms at 5.7% in 2021–22 is estimated to have been well above the 10-year average of 4.2% per farm.
Map 1 Farm cash income, specialist cropping farms, Australia, 2021–22
Source: ABARES Australian Agricultural and Grazing Industries Survey
Mixed livestock-cropping farms
- The average farm cash income for mixed livestock-cropping farms is estimated to have been around $396,000 per farm in 2021–22, around 63% above the average in real terms for the previous 10 years.
- The average rate of return (excluding capital appreciation) for mixed livestock-cropping farms at 3.0% in 2021–22 is estimated to have been above the 10-year average of 2.2%.
- Debt is an important source of funds for farm investment and ongoing working capital for many cropping farms. At the national scale, average cropping farm debt increased by 7% from 1 July 2020 to 30 June 2021, with most of the increase going towards land purchases (Figure 3).
- Despite increased debt, farm equity ratios increased slightly to average 87% in 2020–21 (Figure 4). Improvements in farmers’ equity position was mainly due to a rise in average land values in 2020–21.
Figure 3 Farm debt by purpose, cropping farms, Australia, 2008–09 to 2020–21
average per farm
Source: ABARES Australian Agricultural and Grazing Industries Survey
Debt servicing
- Among a range of factors, the viability of a farm is affected by its capacity to service debt. The servicing of debt consists of making interest payments and paying down the principal. The proportion of net farm income spent on interest payments (interest coverage ratio) is a useful indicator of short-term capacity to service debt. The average interest coverage ratio for cropping farms has improved over the last decade due to continued low interest rates and rising farm incomes.
- Cropping farms with both low equity (equity ratio less than 70%) and that pay a high proportion of income on interest payments (interest coverage ratio higher than 40%) are likely to be particularly sensitive to increases in interest rates. In 2020–21, the percentage of cropping farms in this category was estimated to have been around 2%, down from an average of 6% over the previous 10 years.
Figure 4 Farm equity and interest coverage, cropping farms, Australia, 2008–09 to 2020–21
average per farm
Source: ABARES Australian Agricultural and Grazing Industries Survey
Liquid assets and non-farm income
- Many cropping farms have substantial holdings of liquid assets relative to farm household income that makes them well placed to withstand short-term downturns in income, although there is wide distribution across farm sizes (Figure 5).
- Non-farm income increases business resilience to shocks to farm financial performance for many farms. In particular, small cropping farms sourced the majority of their household incomes (net farm income plus non-farm income) from non-farm sources in 2020–21. The proportion of income sourced off farm was substantially lower for larger farms.
- Farm Management Deposits (FMDs) are an important financial risk management tool for many cropping farms and forms part of their liquid assets. At 30 June 2021, an estimated 38% of cropping farms held FMD accounts, at an average value of $342,000 per farm. The average value of FMDs in 2021 was lower than the peak the previous year as some farmers made draw-downs after drought in 2019–20.
Figure 5 Farm household income and liquid assets by farm size, livestock farms, 2020–21
average per farm
Source: ABARES Australian Agricultural and Grazing Industries Survey
The data in this report is drawn from ABARES Australian Agricultural and Grazing Industries Survey (AAGIS). AAGIS covers broadacre farms with an estimated value of agricultural operations (EVAO) greater than $40,000. Broadacre farms account for around 60% of all Australian farm businesses and they include the following industries (defined by Australian and New Zealand Standard Industrial Classification (ANZSIC)):
Cropping farms
- Wheat and Other Crops Farming: Specialised producers of cereal grains, coarse grains, pulses, and oilseeds.
- Mixed Livestock-Crops Farming: Farm businesses engaged in producing sheep and/or beef cattle in conjunction with substantial activity in broadacre crops such as wheat, coarse grains, pulses and oilseeds.
Livestock farms
- Beef Cattle Farming: Specialised producers of beef cattle.
- Sheep Farming: Specialised producers of prime lambs, sheep, or wool.
- Sheep-Beef Cattle Farming: Producers who have a mix of sheep and beef cattle. Farms classified to sheep-beef industry combine sheep and beef enterprises such that neither enterprise dominates the other.
AAGIS provides a wide range of information on the current and historical economic performance of farm business units, including farm costs, receipts, income and profit, debt, assets, farm capital and labour, industry and farm size.
To reduce respondent burden and complexity of the survey ABARES developed a model-based approach to producing its projections of key estimates. Data in this report for 2021–22 is derived from this model.
Further information on ABARES farm surveys and survey methodology can be found on the ABARES website.
Previous versions of this and related reports.
Farm surveys definitions and methods
Further information about our survey definitions and methods.
The Farm Data Portal is an interactive tool containing all data from ABARES surveys of broadacre and dairy farms, and outputs from those surveys, all in the one location.