Disaggregating farm performance statistics by size, 2018–19

Christopher Boult

48%. Output from the largest 10% of broadacre farms. Farm performance varied significantly for farms of different sizes

Overview

Size is an important determinant of farm business performance. Larger farms tend to be more profitable, invest more, and generate a higher rate of return on capital than smaller farms. Moreover, larger farms have more capacity to reduce their marginal costs through scale, and a greater ability to invest in productivity-enhancing capital additions. These factors have driven a trend in Australian agriculture in recent decades towards fewer, but larger farm businesses. An important consequence of this trend is that industry level farm performance is increasingly driven by the performance of the largest farms.

This article presents farm performance statistics for different farm business sizes based on farm revenue. Each category or ‘decile’ represents 10% of the farm population in each industry or region, ranked from smallest to largest based on farm revenue.

The statistics presented in the tables below include the following variables:

  • Share of total output produced
  • Total cash receipts
  • Total cash costs
  • Profit at full equity
  • Total capital as at the beginning of the financial year
  • Net capital additions
  • Rate of return on capital, including capital appreciation
  • Farm business equity ratio

The statistics in this article are intended to complement the publication of ABARES farm performance statistics. Farm survey definitions and methods used to produce these statistics are available on the ABARES website. For further analysis and information about the design of these statistics see Boult and Jackson (2019).

This article provides statistics sourced from the following ABARES farm surveys:

  • Australian Agricultural and Grazing Industries Survey (AAGIS)
  • Australian Dairy Industry Survey (ADIS)
  • Survey of Australian Vegetable Growing Farms

Farms in the broadacre, dairy and vegetable industries are separated into size deciles based on farm total cash receipts—a measure of total revenue received by the business in a given financial year. Statistics for the broadacre industry are further split into the sub-industries of wheat and other crops, beef, sheep, mixed cropping–livestock, and sheep–beef. The cropping industry is separated into the Grains Research and Development Corporation Western, Northern and Southern regions (Map 1) and the beef industry into the Meat & Livestock Australia Northern and Southern regions (Map 2). Data are presented in 13 tables according to classification by industry and region.

Farm performance varies significantly from year to year, reflecting volatility in seasonal conditions and commodity prices. Therefore, data are averaged over 2016–17 to 2018–19 to provide a more meaningful measure of farm performance than would be provided by a single year.

Key points for 2016–17 to 2018–19

  • The largest 10% of broadacre farms produced 48% of total output, while the smallest 50% of farms produced 11% of total output.
  • The average rate of return including capital appreciation by the largest 10% of broadacre farms was 8.3%, while the average for the smallest 10% of farms was –4.2%.
  • The beef industry was the most concentrated broadacre industry, with the largest 10% of farms producing over half of total industry output in the 3 years to 2018–19. This is especially pronounced for beef farms in northern Australia, where farms in the top decile are over twice as large, and around 7 times as profitable as their counterparts in southern Australia.
  • Farm size differences were largest in the vegetables industry. Those in the largest decile produced around 150 times more output than farms in the smallest decile.
  • Output was most equally distributed in the dairy industry. Nonetheless, the largest 10% of farms used more than 5 times the capital to produce more than 13 times the output of the smallest 10% of farms.

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Statistical Tables

Broadacre industries

Table 1 Broadacre farms, Australia, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 0.7 41,474 53,984  –65,427 1,345,251 3,944 –4.2 94.9
2 1.2 69,414 63,049 –52,180 2,227,478 24,492 –0.9 97.6
3 1.9 111,489 79,776 –38,450 2,773,894 –7,379 0.1 96.1
4 2.8 169,210 132,849 –36,257 2,843,207 3,773 1.8 94.1
5 4.0 238,198 168,327 –19,598 3,341,539 16,271 3.7 94.7
6 5.5 325,459 227,557 –12,227 4,354,915 40,664 4.1 92.9
7 7.5 448,517 307,088 32,695 5,310,450 96,698 3.2 89.7
8 11.1 663,221 442,646 107,018 6,819,593 95,817 5.9 89.4
9 17.7 1,059,733 709,906 257,352 9,865,974 153,512 7.8 86.8
10 47.7 2,852,116 1,922,877 770,777 18,056,829 399,011 8.3 81.3

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 2 Wheat and other crops farms, Australia 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 0.6 69,596 66,475 –53,678 1,479,797 116,450 –3.8 93.0
2 1.5 205,312 146,530 –24,316 2,641,397 –20,298 1.9 91.2
3 2.6 339,268 235,634 –15,006 3,689,472 –61,764 6.3 94.5
4 3.7 494,699 338,089 78,623 3,915,284 84,883 7.0 84.8
5 5.3 663,721 457,277 119,140 5,433,815 5,409 7.0 82.0
6 6.9 932,386 663,905 185,459 7,073,254 94,403 5.8 85.5
7 9.9 1,306,507 886,505 290,783 8,716,070 435,084 8.8 82.8
8 13.9 1,832,033 1,248,191 506,475 11,693,148 392,564 8.7 79.3
9 19.6 2,512,948 1,583,443 713,309 12,009,451 450,237 10.9 81.2
10 36.1 4,885,327 3,140,397 1,673,363 20,785,196 393,247 11.8 76.9

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 3 Beef farms, Australia, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 1.1 34,107 48,893 –52,989 1,469,713 2,979 –2.8 93.9
2 1.3 52,152 62,270 –76,672 1,607,628 8,974 –3.4 99.7
3 1.8 67,545 46,543 –36,949 2,336,641 8,622 –0.7 98.8
4 2.3 87,455 69,262 –33,766 2,071,404 4,270 0.0 97.2
5 3.0 111,788 69,808 –32,114 3,568,983 4,001 0.4 98.9
6 4.2 151,912 127,401 –27,845 3,230,666 –14,009 1.3 93.8
7 6.0 226,689 171,667 –45,709 4,223,610 18,723 2.7 94.5
8 8.8 330,465 250,484 –40,649 5,470,164 52,070 2.0 92.8
9 14.5 537,209 370,297 58,939 8,177,284 69,643 3.6 90.8
10 57.1 2,121,126 1,462,713 511,798 20,668,604 388,879 5.4 86.2

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 4 Sheep farms, Australia, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 1.3 44,380 64,168 –86,532 941,377 4,810 –11.2 88.2
2 2.3 90,151 72,684 –58,014 2,662,005 1,020 2.3 96.3
3 3.2 128,231 106,100 –57,634 2,003,969 13,965 –1.1 92.9
4 4.9 176,955 132,146 –11,009 2,533,979 12,479 2.6 90.8
5 6.4 236,121 155,380 19,426 2,691,745 27,215 9.4 94.6
6 6.8 274,326 175,259 10,853 3,318,720 37,724 3.3 94.4
7 9.8 345,695 224,241 13,961 3,863,741 83,225 7.0 93.4
8 11.2 454,704 298,017 38,964 5,715,266 162,444 2.9 91.4
9 17.4 651,962 420,314 84,718 5,690,127 61,216 5.8 92.9
10 36.7 1,392,205 875,683 382,963 12,385,841 104,977 8.7 88.3

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 5 Mixed cropping–livestock farms, Australia, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 1.2 80,241 70,572 –48,763 1,597,070 28,765 –4.4 96.5
2 2.1 180,389 150,566 –55,029 2,501,783 –36,205 0.6 94.3
3 3.8 288,790 178,560 –5,947 3,767,752 45,955 4.3 91.5
4 4.7 376,479 258,099 5,656 4,183,873 93,098 2.8 88.1
5 7.3 487,290 315,319 81,141 5,541,597 47,251 5.0 91.5
6 7.0 644,527 428,408 97,688 4,325,892 277,606 6.6 83.2
7 10.5 792,742 517,185 160,366 7,062,572 69,312 6.9 88.2
8 13.3 1,008,348 669,010 216,221 8,205,207 209,050 7.1 86.4
9 17.4 1,397,180 917,785 388,603 10,176,931 138,141 8.9 85.5
10 32.8 2,556,760 1,797,437 630,895 17,272,730 360,575 9.2 79.8

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 6 Sheep–beef farms, Australia, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 2.1 116,393 92,116 –85,438 2,963,865 –121,094 0.6 99.3
2 4.3 182,929 142,526 –40,715 2,932,353 13,693 1.3 89.7
3 3.4 218,153 173,451 –68,835 3,371,114 18,780 0.7 96.5
4 3.8 248,584 157,573 –47,098 3,080,640 –30,165 2.0 98.0
5 5.1 292,165 226,781 –39,051 3,367,075 16,115 2.0 96.7
6 7.4 391,730 302,933 –35,275 3,863,384 126,861 1.8 91.2
7 8.2 484,368 325,505 67,798 6,541,049 17,033 4.8 91.2
8 12.0 660,919 437,799 60,271 7,208,928 23,228 6.4 90.5
9 16.9 918,519 669,926 169,804 11,646,646 252,698 9.2 88.0
10 36.8 2,131,436 1,687,119 304,607 19,884,019 –8,420 7.9 85.5

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Broadacre regions

Map 1 Grains Research and Development Corporation regions, Australia
This map shows three regions – Northern, Southern and Western. The Northern region encapsulates all of New South Wales, the Australian Capital Territory, and most of the Eastern half of Queensland. The Southern region encapsulates all of Tasmania and Victoria, as well as the coastline and south-east of South Australia. The Western region includes the southernmost quarter of Western Australia
Source: Grains Research and Development Corporation
Table 7 Wheat and other crops farms, Western region, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 1.2 173,674 112,725 –25,343 1,584,709 7,308 0.8 99.6
2 2.5 354,451 232,016 69,507 4,508,313 94,830 3.7 90.3
3 4.1 493,741 301,467 130,585 3,780,123 6,078 5.1 94.5
4 3.4 631,289 408,964 76,949 4,251,844 –124,632 3.3 88.1
5 5.4 770,840 439,656 229,339 5,497,571 48,637 8.3 94.3
6 6.2 949,263 628,998 261,460 6,114,760 193,757 4.7 85.1
7 10.4 1,424,911 937,619 400,116 7,584,474 228,722 7.1 85.4
8 13.2 1,995,838 1,332,145 528,270 10,147,911 281,138 7.4 79.4
9 19.1 2,817,365 1,813,585 908,746 10,172,871 318,056 11.1 75.5
10 34.6 5,058,861 3,157,454 1,811,732 18,002,175 –146,263 14.3 77.6

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 8 Wheat and other crops farms, Southern region, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 0.8 52,432 46,904 –59,888 1,397,062 18,818 –5.3 96.1
2 1.5 91,094 75,899 –51,622 2,413,050 7,697 1.6 97.7
3 2.7 169,122 138,044 –14,977 2,744,236 43,046 5.5 93.0
4 3.6 236,798 158,559 11,158 2,945,685 17,935 5.4 90.6
5 5.0 302,059 214,881 –7,709 3,899,345 38,690 2.7 91.1
6 6.2 400,535 270,313 49,028 4,687,147 139,650 4.8 93.7
7 9.0 571,741 370,502 120,409 6,188,108 141,938 4.9 89.8
8 13.4 841,866 568,652 177,164 8,708,919 157,749 5.4 89.5
9 19.3 1,210,025 821,769 352,850 10,100,886 171,399 10.1 85.4
10 38.4 2,428,266 1,565,148 823,694 17,403,253 627,952 10.0 84.8

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 9 Wheat and other crops farms, Northern region, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 0.9 62,046 102,137 –93,478 2,785,442 59,846 –1.3 92.9
2 2.1 147,606 120,295 –59,964 2,244,009 –20,477 –1.9 94.0
3 3.6 227,280 176,874 –59,233 3,293,782 1,739 1.9 93.4
4 4.1 288,389 219,254 –77,895 4,410,311 98,050 1.6 96.2
5 4.8 362,272 272,593 –52,695 4,686,092 –47,004 5.3 92.1
6 6.8 473,723 361,011 –31,351 5,770,516 90,439 3.1 85.6
7 8.9 627,341 435,092 32,461 6,182,205 53,815 6.3 86.7
8 11.9 809,944 581,462 101,782 8,729,216 182,763 6.6 86.4
9 16.9 1,220,150 901,726 178,594 11,791,985 220,849 8.4 85.0
10 40.0 2,800,975 2,088,446 467,262 21,109,585 460,827 7.5 77.5

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Map 2 Australian beef cattle industry, Northern and Southern regions, Australia
This map shows two regions – Northern and Southern. The Northern region encapsulates almost all of Queensland, much of the Northern Territory, and the north and north-west regions of Western Australia. The Southern region includes the south-west of Western Australia, the north, south and east of South Australia, eastern Tasmania, almost all of Victoria, and almost all of New South Wales
Source: Meat & Livestock Australia
Table 10 Beef farms, Southern region, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 1.9 37,428 47,220 –44,578 1,518,494 4,159 –1.7 98.6
2 2.2 51,191 73,162 –85,597 1,421,835 8,178 –4.0 99.7
3 2.5 64,521 40,222 –34,079 2,390,953 1,481 –1.4 99.4
4 3.3 81,596 61,221 –30,044 1,963,651 278 1.6 97.9
5 4.3 99,466 73,832 –58,931 2,096,183 9,244 0.9 97.6
6 5.2 122,123 85,457 –14,503 4,212,307 –9,014 0.6 96.8
7 6.8 163,837 136,177 –45,533 3,432,564 –26,189 0.7 98.1
8 10.8 241,741 171,748 –7,095 3,948,126 23,924 3.8 95.8
9 15.3 375,041 308,052 –59,702 6,205,504 115,251 1.6 93.2
10 47.7 1,117,624 848,297 127,514 13,012,400 233,938 4.5 88.5

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 11 Beef farms, Northern region, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 0.5 27,758 48,639 –67,678 1,338,484 6,937 –4.5 87.6
2 1.0 57,334 48,008 –48,097 2,239,823 24,437 –1.7 97.0
3 1.2 76,202 67,489 –43,825 1,937,572 8,358 –2.1 92.4
4 1.9 111,593 67,659 –11,540 3,195,114 –8,823 0.0 95.3
5 2.9 176,310 154,421 –52,948 4,048,341 24,828 1.9 91.6
6 4.4 258,829 169,547 –25,027 4,315,018 22,306 1.5 97.0
7 6.0 354,021 224,416 16,443 6,349,328 36,034 2.4 92.8
8 8.2 503,075 338,980 101,308 7,202,982 108,939 5.2 88.1
9 14.2 851,309 515,746 247,464 12,261,679 105,078 5.9 88.9
10 59.7 3,550,091 2,417,462 896,467 30,907,481 515,416 5.1 84.3

Note: Per farm averages for each size decile
Source: ABARES Australian Agricultural and Grazing Industries Survey

Dairy industry

Table 12 Dairy farms, 2016–17 to 2018–19
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 2.3 184,142 183,820 –133,305 2,084,285 –8,285 –4.1 97.7
2 3.1 274,789 284,182 –93,540 3,454,566 –72,950 1.7 93.4
3 4.9 419,218 346,805 3,777 3,346,730 21,406 1.8 90.5
4 5.9 508,605 467,498 17,151 3,147,667 20,783 3.1 75.1
5 7.6 570,117 479,727 41,849 3,716,880 81,810 1.5 83.6
6 7.5 727,226 559,854 103,865 4,548,485 194,206 5.0 82.9
7 10.2 867,044 732,062 88,888 5,725,415 69,680 1.9 78.2
8 12.3 1,056,987 858,568 187,113 5,549,562 88,788 5.3 75.5
9 17.1 1,426,463 1,189,595 233,210 7,864,532 86,639 5.8 76.7
10 29.1 2,519,687 2,169,585 386,611 11,583,563 351,437 5.0 74.6

Note: Per farm averages for each size decile
Source: ABARES Australian Dairy Industry Survey

Vegetables industry

Table 13 Vegetable farms, 2015–16 to 2017–18
Size Decile Output share (%) Cash receipts ($) Cash costs ($) Farm business profit ($) Capital ($) Net capital additions ($) Rate of return (%) Equity ratio (%)
1 0.5 64,071 80,560 –95,328 1,198,656 4,819 –7.4 93.2
2 0.6 95,362 106,030 –69,417 1,289,724 38,728 –2.4 89.8
3 1.1 158,296 118,739 –39,183 2,032,728 –781 –0.8 96.9
4 1.7 246,562 183,780 –20,591 2,339,961 23,137 –0.2 93.4
5 2.3 321,762 234,251 –1,171 2,646,265 427 1.1 97.4
6 3.1 439,615 313,209 32,014 3,198,893 1,814 3.4 94.0
7 4.4 632,196 444,415 79,274 3,806,635 79,468 3.2 92.1
8 6.3 911,922 652,899 158,359 4,896,331 53,595 6.9 89.9
9 12.7 1,825,947 1,390,915 307,550 8,224,979 101,468 6.9 85.7
10 67.3 9,607,401 7,859,748 1,653,799 16,073,224 295,140 12.1 81.6

Note: Per farm averages for each size decile
Source: ABARES Survey of Australian Vegetable Growing Farms

References

Boult, C & Jackson, T 2019, ‘Disaggregating farm performance statistics by size, 2017–18’, in Agricultural Commodities: March quarter 2019, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

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Last reviewed: 3 March 2020
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