Farm performance: broadacre and dairy farms, 2019–20 to 2021–22

• For cropping farms (see Box 1), average farm incomes are projected to be much higher in 2021–22 due to increased crop production and prices. Strong increases in crop receipts are expected in all states, although some parts of central and northern New South Wales were affected by rainfall during harvest.
• On average, farm cash income for cropping farms is expected to increase by around 40% in 2021–22 to $572,000 per farm. Substantial increases in incomes are expected on cropping farms in Queensland and Western Australia.
• Higher prices for beef cattle, sheep, wool and lambs are expected to contribute to increased incomes for livestock farms in 2021–22. However, the increase in incomes will be moderated by slightly reduced sales of cattle and sheep on average as many producers in some regions continue herd and flock rebuilding.
• On average, farm cash income for livestock farms  is expected to increase by around 24% in 2021–22 to around $163,000 per farm. The increase in incomes is expected to be mainly because of higher beef receipts, with receipts from sheep, lambs and wool remaining relatively unchanged from the previous year.

Box 1 ABARES farm survey industry definitions

• Map 1 shows farms incomes in 2021–22 relative to the longer-term average (10 years to 2020–21).
• Higher incomes in 2021–22 are expected to result in most regions across Australia outperforming the longer-term average. Incomes remained below the longer-term average in South East Queensland, Far Western New South Wales and parts of the New South Wales central and northern tablelands.
• In Far Western New South Wales this was mostly climate driven, with below average rainfall slowing flock rebuilding efforts, leading to wool production below the longer-term average.
• Increases in crop production because of higher rainfall were the main driver of increased incomes for many farms in the cropping regions of New South Wales, Queensland and South Australia.
• Results were mixed in regions dominated by livestock production. Some regions benefited from higher beef cattle prices—including parts of Queensland and the Northern Territory—while farm cash incomes were lower than average in other regions as producers continue rebuilding herds and flocks.

Map 1 Farm cash income, broadacre farms, Australia, 2021–22

• The financial performance of Australian dairy farms improved in 2020–21 and is projected to increase further in 2021–22.
• At the national level, average farm cash income in 2020–21 is estimated to have increased by 34% to around $249,300 per farm. This increase was driven by higher milk production per farm and lower fodder costs as seasonal conditions improved from the previous drought-affected years. The increase in average milk production per farm also reflects ongoing adjustment in the industry with a number of smaller farms exiting the industry.
• In 2021–22 higher farmgate milk prices are expected to result in average farm cash income increasing by a further 35% to average $338,000 per farm. The extent of the increase in incomes is expected to be moderated by higher fuel and fertiliser costs due to higher global energy prices.
• In 2021–22 average dairy farm incomes are projected to increase in all states, ranging from 6% in South Australia (where average incomes have been at historically high levels in recent years), to 96% in Queensland (where dairy farmers are benefitting from higher milk prices, lower fodder costs, and much improved seasonal conditions).

The 2021–22 projections were generated using farmpredict (see Box 2) based on AAGIS data up to 2019–20, ABARES forecasts of commodity prices for 2021–22 (as at March 2022) and observed weather data up to February 2022 with a ‘climatological’ ensemble forecast of March to June 2022 weather conditions (based on the last 20 years). Given the late stage of season, the uncertainty in climate conditions for the remainder of 2021–22 has limited implications for the 2021–22 farm performance projections (see the shaded areas in Figure 2 and Figure 3).

Box 2 Model-based approach using farmpredict

Farmpredict is a data driven micro-simulation model developed using historical farm data from ABARES Australian Agricultural and Grazing Industry Survey (AAGIS). The model links information on the characteristics of farm businesses, commodity prices and climate data to produce farm-level predictions of the production of outputs, the use of inputs and changes in stocks (Figure 1). Full details of the model are provided in the working paper by Hughes et al. (2019).

Figure 1 An overview of farmpredict: ABARES broadacre farm microsimulation model

Figure 2 Farm cash income, cropping farms, 2011–12 to 2021–22

Figure 3 Farm cash income, livestock farms, 2011–12 to 2021–22

In the short term, farm incomes are affected by seasonal conditions, input prices, commodity prices and the ability of farmers to make decisions based on changes in—and expectations of—these factors. But in the longer-term, changes in average incomes are also determined by industry structure and the economic factors allowing for economies of size and increased productivity. As shown in Figure 4 and Figure 5 below, there has been a trend towards more larger farms and less small farms over the past 20 years.

The change in the distribution of farms is much clearer for cropping farms. For cropping farms, the percentage of farms with a turnover greater than $2,000,000 has increased from around 2% in 1999–00 to 22% in 2020–21. For livestock farms the increase has been much more modest, from around 1% to around 3%. The relative growth in farm size for the cropping industry is in part due to the relative availability of technologies and management practices which have encouraged increases in scale.

Figure 4 Percentage of farms by turnover, cropping farms, 1999–00 and 2020–21

Figure 5 Percentage of farms by turnover, livestock farms, 1999–00 and 2020–21

Hughes, N, Soh, W, Lawson, K, Boult, C, Donoghoe, M, Valle, H & Chancellor, W 2019, farmpredict: A microsimulation model of Australian farms, ABARES working paper, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra, November.

Farm surveys data
Detailed ABARES farm survey data available through interactive tools and spreadsheets.

Farm surveys definitions and methods
Further information about our survey definitions and methods.

Previous reports

Farm performance: broadacre and dairy farms, 2018–19 to 2020–21
See our publications page for previous versions of the report Australian farms surveys results.

About my region
ABARES has produced a series of individual profiles of the agricultural, forestry and fisheries industries in your region. Each regional profile presents an overview of the agriculture, fisheries and forestry sectors in the region, and the recent financial performance of the broadacre and dairy industries.

Farm performance: broadacre and dairy farms, 2019–20 to 2021–22 - PDF
Farm performance: broadacre and dairy farms, 2019–20 to 2021–22 - XLSX