Farm performance: broadacre and dairy farms, 2017–18 to 2019–20

​​Peter Martin and Vernon Topp

Summary

  • In 2019–20 climate conditions (rather than commodity prices) remain the dominant driver of broadacre and dairy farm performance in Australia.
  • In New South Wales average farm business profit on broadacre farms in 2019–20 is projected to be the lowest recorded by ABARES in over 40 years, reflecting low production, reduced livestock numbers and high fodder costs. The compounding impact of drought conditions over a number of years is expected to result in record-low average farm cash incomes in northern New South Wales.
  • Drier seasonal conditions are also driving reductions in average farm incomes in both Western Australia and the Northern Territory in 2019–20, but income levels are projected to remain relatively high in historical terms.
  • Average farm cash incomes are projected to improve for Victorian broadacre farms in 2019–20, mostly as a result of increased broadacre crop production.
  • In Queensland and Tasmania average broadacre farm cash incomes are also projected to increase slightly in 2019–20, but largely at the expense of reductions in livestock numbers. As a result, average farm business profit in these states is expected to decline.
  • In the dairy industry, average farm cash incomes are projected to increase moderately in 2019–20 in New South Wales, Victoria, South Australia and Tasmania. This is largely due to higher milk prices. In all states, the recovery in dairy farm incomes is being constrained by high purchased feed costs, high water costs in irrigation districts, and reductions in milk production due to drought.

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Overview

This article presents results from ABARES most recent surveys of Australian broadacre and dairy farms (see Box 1). The surveys collected detailed information on the physical and financial performance of broadacre and dairy farms in 2018–19, as well as farm managers' estimates of key production, receipts, costs and farm debt variables for the 2019–20 financial year. ABARES uses these estimates to generate projected values of key financial performance indicators for 2019–20. Final ABARES survey results for 2017–18 are also reported. Unless otherwise noted, all financial data in the text and tables are in nominal dollars. Time-series graphs are used to illustrate longer-term trends in key financial performance variables. Financial variables shown in these graphs are displayed in real terms (2019–20 dollars). Map 1 shows the regions used by ABARES to disaggregate state-level results.

Box 1 ABARES farm surveys

Each year, as part of its annual farm survey program, ABARES interviews operators of around 1,600 broadacre farm businesses in its Australian Agricultural and Grazing industries Survey (AAGIS) and 300 dairy farm businesses in its Australian Dairy Industry Survey (ADIS). The AAGIS is targeted at commercial-scale broadacre farms—those that grow grains or oilseeds or run sheep or beef cattle and have an estimated value of agricultural output exceeding $40,000. Broadacre industries covered in this survey include wheat and other crops, mixed livestock–crops, sheep, beef and sheep–beef industries. The ADIS is targeted at commercial-scale milk-producing farms.

Further information about ABARES survey definitions and methods is available at Farm surveys definitions and methods.

Farm performance in 2019–20 heavily influenced by drought

In 2019–20 the compound effects of drought across much of southern Australia over the last few years remains the dominant influence on the financial performance of broadacre and dairy farms.

Crop production in southern Australia in 2019–20 is projected to again be well below average due to drought. This is expected to reduce cropping farm incomes and contribute to the continuation of high prices for hay and feed-grains across the country, which will keep fodder costs for livestock producers at comparatively high levels. However, significant reductions in beef cattle and sheep numbers have reduced fodder expenditure overall.

For cropping farms in drought-affected regions, average farm incomes are projected to be much lower in 2019–20 due to lower crop areas and yields. In regions that have been less affected by drought and received timely in-season rainfall, high prices for most grain, oilseed, grain legume and fodder crops are helping to keep incomes for cropping farms close to historically high levels.

For Australia as a whole, the average farm cash income for all broadacre farms is projected to fall by 8% between 2018–19 and 2019–20—from $165,700 per farm in 2018–19 to $153,000 per farm in 2019–20 (Table 1, Figure 1). This would take average farm cash income in 2019–20 to around 4% below the longer-term average of $158,000 per farm in real terms for the 10 years to 2018–19.

Average farm business profit (farm cash income adjusted for changes in livestock and grain inventories, as well as capital depreciation and the imputed value of family labour) is projected to fall by much more—from an average of just $2,400 per farm in 2018–19 to negative $19,000 per farm in 2019–20. This would be the lowest farm business profit recorded since the end of the millennium drought in 2009–10, and well below the longer-term average of $43,000 per farm.

Regional differences pronounced in 2019–20

Overall, the adverse impact of the drought on average broadacre farm profitability has not been as severe as that recorded in previous droughts, but the impact has been severe in some regions and average results mask important regional and industry differences. For New South Wales, average farm business profit is projected to be the lowest recorded in the 42 years ABARES has been monitoring broadacre farm financial performance via the Australian Agricultural and Grazing Industries Survey. For example, in the North West Slopes and Plains region of New South Wales, a major grain growing region, the average farm cash income is projected to be negative $90,000 per farm in 2019–20. Similarly, in the Far West region of New South Wales, the average farm cash income is projected to be negative $14,000 per farm in 2019–20. This follows substantial declines in average farm incomes in these regions in 2017–18 and 2018–19 (Table 8). The drought has severely reduced crop production, reduced beef cattle and sheep numbers, and substantially increased expenditure on purchased feed for livestock.

High prices for most broadacre commodities are supporting cash incomes in drought-affected regions, but the run-down in grain and livestock inventories has reduced farm business profits. Across much of southern Australia, the Northern Territory and Western Australia, dry conditions in 2018–19 and the first half of 2019–20 resulted in high rates of turn-off of beef cattle and sheep. Increased prices for beef cattle, sheep and lambs in 2019–20 have boosted farm receipts, contributing to maintaining or increasing average farm cash incomes in many regions. Increases in cash flow from livestock sales has come at the expense of reduced livestock numbers and livestock inventory values in many regions of southern Australia, resulting in lower farm business profits.

Relatively high grain, oilseed and grain legume prices are projected to contribute to increases in average farm cash incomes in regions fortunate enough to receive timely spring rainfall, such as northern Victoria and much of the South Australian wheat-sheep zone. In Western Australia dry conditions through winter and spring reduced the winter crop in 2019–20. However high grain prices and payments made in 2019–20 on the large crop delivered in the previous year cushioned the decline in average farm cash incomes. Average farm cash income for broadacre farms in Western Australia is projected to decline to $405,000 per farm in 2019–20, a decrease of 19% on the previous year but still around 34% above the 10-year average to 2018–19.

Table 1 Financial performance, all broadacre industries, Australia, 2017–18 to 2019–20
average per farm

Financial performance measure

Unit

2017–18

 

2018–19p

 

RSE

 

2019–20y

 

Total cash receipts $ 588,140 550,600 (3) 518,000
Total cash costs $ 380,640 384,900 (4) 365,000
Farm cash income $ 207,500 165,700 (4) 153,000
Farms with negative farm cash income % 15 26 (8) 31
Farm business profit $ 69,130 2,400 (ns) –19,000
Profit at full equity
– excluding capital appreciation $ 108,310 42,100 (19) 20,000
– including capital appreciation $ 313,410 267,100 (13) na
Farm capital at 30 June a $ 5,547,200 6,052,400 (4) na
Net capital additions $ 63,480 66,900 (31) na
Farm debt at 30 June b $ 623,500 619,800 (5) 673,000
Change in debt—1 July to 30 June b % 6 6 (31) 4
Equity at 30 June bc $ 4,632,260 4,923,400 (3) na
Equity ratio bd % 88 89 (1) na
Farm liquid assets at 30 June b $ 252,000 220,300 (6) na
Farm management deposits (FMDs) at 30 June b $ 86,550 83,700 (8) na
Share of farms with FMDs at 30 June b % 31 29 (6) na
Rate of return e
– excluding capital appreciation % 2.0 0.7 (18) 0.3
– including capital appreciation % 5.9 4.6 (11) na
Off-farm income of owner manager and partner b $ 43,580 37,400 (14) na

a Excludes leased plant and equipment. b Average per responding farm. 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 estimates. y Provisional estimates. na Not available. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Figure 1 Financial performance, all broadacre industries, Australia, 1999–00 to 2019–20
y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Farm equity remains strong in 2019–20

If the ABARES farm income projections for 2019–20 are realised, there are a number of possible effects that may begin to emerge in farm business debt data over time. It is possible that farmers begin to draw down their farm management deposits, to compensate for declining cash incomes. Farmers may also need to borrow to cover working capital expenses, and working capital commitments may increase over time. Debt serviceability challenges may emerge as levels of farm debt rise. The full effects of the drought and fire events in 2019–20 may take time to become evident. Some farmers will undoubtedly be experiencing difficulty servicing debt; however, systemic or broad-based impacts on farm debt are not yet observed in the ABARES data.

Family farms in Australia rely on maintaining high farm equity to provide the capacity to borrow to meet cash flow needs during periods of reduced farm income and for new investment. Despite increases in farm debt over the long term, average farm equity for broadacre and dairy farms remains strong because of increases in the value of agricultural land. The average equity ratio at 30 June 2019 is estimated at 89% for broadacre farms (Table 1). For the majority of broadacre farms, farm equity has strengthened in the 5 years ending 2018–19. This is due to increases in land values (capital appreciation) and reductions in debt for many farms as a result of high farm cash incomes.

The cost of servicing farm debt in Australia is also relatively low at present. For broadacre farms, historically low interest rates mean that the average interest bill as a proportion of net farm income in 2018–19 is around 20%—compared with over 30% (on average) a decade ago.

Industry results mixed due to drought

Between 2018–19 and 2019–20 average farm cash income and average farm business profit is projected to decline for the wheat and other crops industry, the mixed livestock–crops industry and the sheep industry, but remain largely unchanged for the beef and sheep–beef industries (Table 2, Figure 2 and Figure 3).

In the beef and sheep–beef industries, higher farmgate prices for beef cattle are helping to offset the adverse effects on farm incomes of reduced turn-off of beef cattle and sheep and continued high expenditure on purchased feed by farms in drought. In addition, particularly for sheep–beef industry farms, total farm costs are projected to decline in 2019–20. Expenditure on purchased fodder is expected to decline as a result of the reduction in beef cattle and sheep numbers during 2018–19 and 2019–20.

In 2019–20 the financial performance of the sheep industry is projected to decline as a result of lower wool prices and lower wool production, and reduced turn-off of sheep and lambs. High turn-off of sheep and lambs and reduced lamb-marking percentages in 2018–19 and 2019–20 have reduced sheep numbers. The decline in wool and sheep receipts in 2019–20 is projected to be partly offset by higher prices for lambs and by reduced expenditure on purchased fodder.

In the wheat and other crops industry and the mixed livestock–crops industry, lower farm incomes are expected in 2019–20 compared with the previous year. Large decreases for farms in drought regions are projected to more than offset the generally higher incomes on cropping farms in regions where timely spring rains resulted in an increased winter crop production in 2019, particularly in Victoria and South Australia.

In the wheat and other crops industry, the average farm cash income in 2019–20 is projected to fall by $55,000 per farm, from $429,300 per farm in 2018–19 to $374,000 per farm in 2019–20 (Table 2). This reflects the net outcome of very different underlying changes for this industry at the state level, such as a reduction in average farm cash income of around $212,000 per farm in New South Wales (Table 8) and an increase of around $362,000 per farm in Victoria (Table 9).

The projected change in the financial performance of the mixed livestock–crops industry between 2018–19 and 2019–20 also reflects the impact of increased receipts from the sale of beef cattle and sheep in regions impacted by drought in 2019–20. Average farm cash income in this industry is projected to decline by around $18,000 per farm. However, average farm business profit is projected to fall by around $42,000 per farm, reflecting a further reduction in livestock numbers on farms in drought-affected regions (Table 2).

The financial performance of dairy farms in 2019–20 reflects the net effects of higher farmgate milk prices, and the negative impacts of ongoing exposure to drought and associated high prices for feed grains, hay and water. Nationally, the average farm cash income on dairy farms is projected to increase by around $43,000 per farm between 2018–19 and 2019–20—from $120,100 per farm in 2018–19 to $165,000 in 2019–20 (Table 6 and Figure 5). This represents an increase of 36%.

Table 2 Financial performance, broadacre industries, Australia, 2017–18 to 2019–20
average per farm
Broadacre industries Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 207,500 165,700 (4) 153,000 69,130 2,400 (ns) –19,000
Wheat and other crops $ 446,390 429,300 (7) 374,000 209,230 198,800 (15) 78,000
Mixed livestock–crops $ 232,110 203,200 (9) 185,000 70,690 8,200 (ns) –34,000
Sheep $ 134,150 125,900 (9) 110,000 25,250 –900 (ns) –7,000
Beef $ 132,100 91,600 (11) 93,000 40,160 –50,500 (23) –43,000
Sheep–beef $ 209,340 90,300 (37) 91,000 38,050 –87,700 (35) –80,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 3 Rate of return, broadacre industries, Australia, 2017–18 to 2019–20
average per farm
Broadacre industries Unit Rate of return excluding capital appreciation a Rate of return including capital appreciation a
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries % 2.0 0.7 (18) 0.3 5.9 4.6 (11) na
Wheat and other crops % 4.2 3.8 (10) 2.1 9.2 8.6 (9) na
Mixed livestock–crops % 2.1 1.0 (25) 0.3 5.2 5.2 (14) na
Sheep % 1.2 0.5 (56) 0.3 8.2 4.6 (17) na
Beef % 1.2 –0.5 (45) –0.3 3.0 2.6 (29) na
Sheep–beef % 1.3 –0.8 (73) –0.8 7.8 3.0 (ns) na

a Excludes leased plant and equipment. p Preliminary estimates. y Provisional estimates. na Not available. RSE Relative standard error. ns Not supplied—exceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Figure 2 Farm cash income, grain industries, Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Figure 3 Farm cash income, sheep and beef industries, Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Performance, by state and region

At the state level, changes in farm financial performance between 2018–19 and 2019–20 mainly reflect the effect of seasonal conditions. In 2018–19 drought conditions were experienced in southern and eastern Queensland, northern New South Wales, northern Victoria, north-eastern South Australia, northern Western Australia and central and southern Northern Territory.

Rainfall between July and November 2019 was the lowest on record (BOM 2019) and the geographic reach of drought expanded in the southern half of Australia in 2019–20. Extremely dry conditions and well above average temperatures resulted in expansion of drought in New South Wales, south-east Queensland, South Australia, parts of the Northern Territory, southern Western Australia and Tasmania. Crop production was severely reduced and sales of beef cattle and sheep increased as pasture, fodder and water supplies dwindled.

In New South Wales, Western Australia and the Northern Territory average broadacre farm incomes are projected to decline in 2019–20 (Figure 4, Table 4 and Table 5).

Region and industry-level differences are even greater. This largely reflects the geographic reach of drought, which has been felt most strongly in the wheat sheep and high rainfall zones of southern Queensland, New South Wales, northern South Australia, the wheat sheep zone in Western Australia and much of the Northern Territory.

Figure 4 Change in average farm cash income between 2018–19 to 2019–20, all broadacre industries, by state (%)
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 4 Financial performance, all broadacre industries, by state, 2017–18 to 2019–20
average per farm
State Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
New South Wales $ 179,490 80,900 (12) 21,000 6,400 –120,600 (8) –143,000
Victoria $ 134,600 100,900 (9) 173,000 42,850 –5,700 (ns) 52,000
Queensland $ 185,690 104,700 (13) 130,000 56,350 –38,200 (52) –53,000
Western Australia $ 428,240 497,600 (7) 405,000 248,540 325,900 (12) 133,000
South Australia $ 239,550 234,800 (9) 235,000 107,930 77,400 (22) 58,000
Tasmania $ 150,980 166,600 (12) 183,000 97,850 116,700 (17) 100,000
Northern Territory $ 1,000,480 2,784,500 (25) 1,109,000 1,234,950 413,700 (67) 199,000
Australia $ 207,500 165,700 (4) 153,000 69,130 2,400 (ns) –19,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not supplied—exceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 5 Rate of return, all broadacre industries, by state, 2017–18 to 2019–20
average per farm

State

Unit

Rate of return excluding capital appreciation a

Rate of return including capital appreciation a

2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
New South Wales % 0.8 –1.4 (12) –1.8 6.5 1.8 (30) na
Victoria % 1.9 0.5 (46) 1.7 6.3 5.5 (14) na
Queensland % 1.5 0.0 (ns) –0.2 3.7 3.4 (22) na
Western Australia % 5.1 6.0 (9) 2.9 7.3 8.5 (10) na
South Australia % 2.9 2.1 (14) 1.7 6.7 7.3 (14) na
Tasmania % 3.0 3.1 (14) 2.4 4.5 16.6 (49) na
Northern Territory % 5.0 1.5 (53) 0.9 6.9 4.0 (37) na
Australia % 2.0 0.7 (17) 0.3 5.9 4.6 (8) na

a Excludes leased plant and equipment. p Preliminary estimates. y Provisional estimates. na Not available. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Dairy industry

In 2018–19 dry seasonal conditions were mainly responsible for a reduction in average farm cash incomes for dairy farms in all states except South Australia. In 2019–20 dry seasonal conditions continue to adversely affect dairy farm financial performance, leading to increased purchased feed and water costs for dairy farms. However, despite the effects of drought, higher farmgate milk prices are projected to result in higher average farm cash incomes on dairy farms in all states except Western Australia. Increases range from 51% in Tasmania to 10% in Queensland (Figure 5, Figure 6, Table 6 and Table 7).

Figure 5 Financial performance, dairy farms, Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey
Figure 6 Change in average farm cash income between 2018–19 to 2019–20, dairy farms, by state (%)
Source: ABARES Australian Dairy Industry Survey
Table 6 Financial performance, dairy farms, by state, 2017–18 to 2019–20
average per farm
State Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
New South Wales $ 178,170 130,900 (20) 162,000 45,920 –34,500 (88) –2,000
Victoria $ 144,620 107,700 (17) 159,000 85,760 –30,900 (65) 25,000
Queensland $ 137,850 80,500 (26) 89,000 18,310 –59,000 (44) –57,000
Western Australia $ 298,240 243,000 (12) 211,000 171,310 84,100 (31) 38,000
South Australia $ 152,120 253,200 (8) 292,000 79,890 78,300 (35) 134,000
Tasmania $ 282,170 135,500 (41) 205,000 215,830 27,300 (ns) 113,000
Australia $ 162,380 120,100 (11) 165,000 88,290 –21,300 (70) 28,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Dairy Industry Survey

Table 7 Rate of return, dairy farms, by state, 2017–18 to 2019–20
average per farm

State

Unit

Rate of return excluding capital appreciation a

Rate of return including capital appreciation a

2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
New South Wales % 2.2 0.6 (71) 1.0 5.6 0.7 (ns) na
Victoria % 3.2 0.8 (57) 1.8 4.8 3.1 (30) na
Queensland % 1.2 –0.3 (ns) –0.5 0.2 –0.3 (ns) na
Western Australia % 2.7 2.0 (15) 1.5 3.1 1.4 (22) na
South Australia % 2.5 2.0 (15) 2.7 7.3 7.7 (30) na
Tasmania % 5.5 2.4 (41) 3.7 3.8 3.4 (37) na
Australia % 3.1 1.0 (30) 1.7 4.6 2.7 (22) na

a Excludes leased plant and equipment. p Preliminary estimates. y Provisional estimates. na Not available. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Dairy Industry Survey

New South Wales

Broadacre farms in New South Wales recorded substantial declines in profitability in 2018–19, with average farm cash incomes declining in all regions and for all industries. In 2019–20 the financial position of these farms is projected to be even worse (Table 8).

In 2019–20 farm cash income for broadacre farms in New South Wales is projected to average $21,000 per farm—the lowest recorded since 2006–07, in real terms (Figure 7). Farm business profit, which also accounts for changes to livestock and crop inventories, is projected to be the lowest recorded for New South Wales in the 42 years of the Australian Agricultural and Grazing Industries Survey.
In 2019–20 the Far West (region 111) and North-West Slopes and Plains (region 121) regions of New South Wales are expected to record the largest proportionate declines in farm incomes compared with the previous year. This follows substantial declines in average farm incomes in these regions between 2017–18 and 2018–19.

The projected reductions in average farm incomes at the region level reflect two main drivers. First, there was very low crop production and pasture growth in northern New South Wales in 2019 due to continued severe rainfall deficiencies. Second, there was an expansion of the drought footprint to include all of southern New South Wales.

In 2019–20 all 5 broadacre industries in New South Wales are projected to record lower average farm incomes compared with 2018–19. These reductions follow on from large reductions for all 5 industries in 2018–19 (Table 8). The biggest reduction is expected for farms in the beef industry, mainly as a result of reduced beef cattle turn-off compared with historically high turn-off in 2018–19. Beef herd sizes were reduced by an average of 15% on broadacre farms in 2018–19 and a further 8% reduction is projected for 2019–20. Reductions in herd sizes are expected in all regions, with the largest percentage reductions occurring in the Coastal (region 132), down 16%, and the North West Slopes and Plains region (region 131), down 15%.

For sheep industry farms in New South Wales, average farm incomes are projected to be 30% lower in 2019–20 compared with the previous year. The drivers are lower wool prices, reduced wool production as a result of smaller flock sizes, and lower wool cuts per head combined with lower receipts as a result of reduced turn-off of sheep and lambs. On average, sheep numbers on broadacre farms were reduced by 12% in 2018–19. A further reduction of around 7% is projected for 2019–20. Average farm cash income for sheep–beef industry farms—many of which are located in the Tablelands region of New South Wales—are projected to decline by around 40% in 2019–20.

For livestock farms in general, farm cash incomes in 2019–20 continue to be adversely affected by high purchased fodder costs. However, total fodder expenditure is projected to decline as a result of the further reductions in herd and flock numbers and a small reduction in fodder prices.

Fires in eastern New South Wales between October 2019 and February 2020 will have affected some production and farm costs in the Coastal and Tablelands regions. ABARES estimates of financial performance in 2019–20 were based on surveys conducted prior to most of these major fire events. However, the affected farmland is a relatively small proportion of total farm area in these regions.

Cropping farm incomes in 2019–20 are projected to decline in New South Wales due to two main factors. First, winter crop production in 2019 in the North West Slopes and Plains was much reduced due to drought. And second, there is likely to be markedly reduced production of summer crops (including grain sorghum, rice and cotton) due to low rainfall and low availability of irrigation water. Average farm cash income for wheat and other crops industry farms is projected to decline to negative $16,000 per farm, driven mainly by very low farm cash incomes for cropping farms in the North West Slopes and Plains and Far West regions, and by low summer crop production state-wide.

For the New South Wales dairy industry, average farm cash income is projected to increase by 24% from $131,000 per farm in 2018–19 to $162,000 in 2019–20. This is still around 5% below the average for the 10 years to 2018–19 (Figure 8). Overall, farmgate milk prices are expected to be higher this year—leading to an increase in milk receipts and more than offsetting a reduction in average milk production per farm. Overall New South Wales milk production is projected to fall in 2019–20, mostly the result of the exit of farms from dairying. However, a reduction in milk production is also expected on some farms remaining in dairying. In addition, continued dry seasonal conditions and high prices for hay, silage and feed grains have maintained purchased feed costs at a high level—a major expense for this industry—and have constrained the overall increase in average farm cash income.

Figure 7 Financial performance, all broadacre industries, New South Wales, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 8 Financial performance, by region and industry, New South Wales, 2017–18 to 2019–20
average per farm
Industry/region Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 179,500 81,000 (15) 21,000 6,400 –121,000 (10) –143,000
Wheat and other crops $ 416,800 146,000 (33) –66,000 96,000 –144,000 (27) –306,000
Mixed livestock–crops $ 225,300 127,000 (23) 41,000 10,500 –148,000 (14) -183,000
Sheep $ 116,200 98,000 (17) 70,000 –20,700 –70,000 (30) –73,000
Beef $ 90,500 27,000 (ns) –12,000 –6,300 –139,000 (19) –133,000
Sheep–beef $ 230,700 78,000 (34) 44,000 9,900 –124,000 (18) –134,000
All broadacre industries by region
111: Far West $ 265,600 27,000 (ns) –14,000 –105,800 –283,000 (15) –233,000
121: North West Slopes and Plains $ 256,000 –3,000 (ns) –90,000 –8,000 –290,000 (10) –302,000
122: Central West $ 172,500 63,000 (29) 21,000 –30,800 –132,000 (16) –161,000
123: Riverina $ 209,000 196,000 (13) 93,000 47,200 –23,000 (93) –72,000
131: Tablelands $ 146,900 70,000 (30) 24,000 37,400 –89,000 (21) –93,000
132: Coastal $ 14,500 10,000 (82) 36,000 –37,700 –68,000 (18) –98,000
Dairy industry $ 178,200 131,000 (20) 162,000 45,900 –35,000 (88) –2,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Figure 8 Financial performance, dairy farms, New South Wales, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey
Map 1 Broadacre zones and regions, Australia
Note: Each region is identified by a unique code of three digits. The first digit indicates the state or territory, the second digit identifies the zone and the third digit identifies the region.
Source: ABARES

Victoria

For broadacre farms in Victoria, average farm cash incomes were slightly below longer-term averages in 2018–19 in all regions—particularly for cropping farms. Dry seasonal conditions reduced broadacre crop production by around 40% relative to the average for the previous 10 years. The dry conditions also resulted in increased turn-off of beef cattle at lighter weights and increased expenditure on purchased fodder. This lead to lower farm cash incomes for beef farms and reduced herd sizes (Table 9 and Figure 9).

In 2019–20 average farm cash incomes are projected to increase in all regions. Increased crop production in the Mallee (region 221), Wimmera (region 222) and Central North (region 223) is projected to result in higher receipts for wheat, barley, oilseeds and grain legumes, contributing to significantly higher average farm cash incomes. This is despite a small reduction in wheat prices expected in 2019–20. In response to high fodder prices, some crops were cut for hay in early 2019–20—including those affected by dry conditions in spring or late frosts. This assisted in increasing crop receipts, particularly in northern Victoria.

In Southern and Eastern Victoria (region 231) average farm cash incomes are also projected to increase in 2019–20 compared with the previous year, with increased receipts from lambs and beef cattle as a result of higher prices offsetting lower receipts for wool. Fires in eastern Victoria in December 2019 and January 2020 will have affected production and farm costs in this region. ABARES estimates of financial performance in 2019–20 were based on surveys conducted prior to these major fire events. However, farmland affected by these fires is a relatively small proportion of total farm area in Southern and Eastern Victoria (region 231).

At the industry level, cropping specialists (wheat and other crops industry farms) in Victoria are expected to record a large increase in average farm incomes in 2019–20. This is because of a substantial increase in receipts from cropping as a result of increased production.
The projected improvement in farm performance in Victoria’s livestock industries is more modest compared with cropping farms. Lower receipts from wool (due to lower wool prices) are projected to be partly offset by increased receipts from sales of sheep and lambs. Receipts from beef cattle are projected to increase due to higher beef prices, while expenditure on purchased fodder is expected to fall due to lower fodder prices. These developments are contributing to higher average farm cash incomes for beef, sheep and sheep–beef industry farms.

Dairy farms in Victoria are projected to return to profitability in 2019–20 as a result of increased milk prices. In 2018–19 average farm cash income fell by 26% and average farm business profit was negative (Figure 10). Markedly higher expenditure on purchased feed and water were the main drivers, which more than offset slightly higher farmgate milk prices in 2018–19.

Farmgate milk prices are projected to increase further in 2019–20, leading to an increase in milk receipts. However, overall state milk production is projected to fall, mainly as a result of the exit of farms from dairying. A small reduction in milk production is also expected on some farms remaining in dairying, particularly in northern Victoria.

Continued dry seasonal conditions in 2019 in northern Victoria and high prices for hay, silage and feed grains have maintained purchased feed and water costs at a high level, constraining the increase in average farm cash income. Average farm cash income is projected to increase from $108,000 per farm in 2018–19 to $159,000 in 2019–20 (Table 9 and Figure 10).

Figure 9 Financial performance, all broadacre industries, Victoria, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 9 Financial performance, by region and industry, Victoria, 2017–18 to 2019–20
average per farm
Industry/region Unit Farm cash income >Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 134,600 101,000 (13) 173,000 42,900 –6,000 (ns) 52,000
Wheat and other crops $ 333,400 203,000 (18) 567,000 164,900 –22,000 (ns) 277,000
Mixed livestock–crops $ 131,000 150,000 (42) 263,000 34,900 31,000 (ns) 90,000
Sheep $ 153,100 134,000 (13) 135,000 61,900 45,000 (38) 45,000
Beef $ 52,600 30,000 (35) 41,000 –8,700 –48,000 (26) –28,000
Sheep–beef $ 125,300 182,000 (25) 279,000 34,700 76,000 (62) 146,000
All broadacre industries by region
221: Mallee $ 214,700 151,000 (21) 374,000 85,200 –70,000 (49) 122,000
222: Wimmera $ 263,200 184,000 (19) 378,000 117,500 34,000 (ns) 202,000
223: Central North $ 117,800 82,000 (14) 152,000 38,700 –45,000 (34) 19,000
231: Southern and Eastern Victoria $ 99,900 81,000 (14) 104,000 21,400 9,000 (ns) 19,000
Dairy industry $ 144,600 108,000 (17) 159,000 85,800 –31,000 (65) 25,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Figure 10 Financial performance, dairy farms, Victoria, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey

Queensland

Average farm cash income for Queensland broadacre farms declined in 2018–19 due to drought. Reduced grain production resulted in crop receipts falling by 50%, and beef cattle receipts declining by 20%. Drought increased the proportion of lower-weight, lower-value cattle sold in southern Queensland. In northern and central Queensland beef cattle turn-off slowed, reducing receipts as producers commenced rebuilding herds after several years of high turn-off. Average farm cash income in 2018–19 was estimated to be $105,000 per farm—21% below the longer-term average of $132,000 (Table 10 and Figure 11). Farm business profit declined further as grain stocks on Queensland cropping farms were reduced, cattle herds on farms in south-eastern Queensland were reduced, and flooding resulted in large losses of beef cattle in northern Queensland. Parts of Cape York and the Gulf (region 311), West and South West Queensland (region 312) and Central North Queensland (region 313) suffered high losses of mainly young cattle (as well as some sheep losses) in a major flooding and cold weather event in February 2019. Severely impacted properties were located in the shires of Burke, Carpentaria, Cloncurry, Flinders, McKinlay, Richmond and Winton. Some younger cattle lost in the flooding had been transferred into this region in 2018–19, particularly from the Northern Territory.

In 2019–20 average farm cash income for Queensland broadacre farms is projected to increase to $130,000 per farm. Farm cash income is projected to increase most in northern and north-western regions of Queensland that predominantly graze beef cattle, reflecting higher beef cattle prices and increased beef cattle turn-off. Regions expected to have higher farm cash income include Cape York and the Gulf (region 311), West and South West Queensland (region 312), Central North Queensland (region 313) and Charleville–Longreach (region 314). Rainfall in early 2020 is likely to slow beef cattle turn-off in many regions, particularly in southern and central Queensland.

Receipts from grain crops are projected to decline in 2019–20. In 2019 rainfall was well below average in most cropping regions except parts of central Queensland. As a result, winter grain production fell for the third consecutive year since record high production was achieved in 2016–17. The overall area planted to summer crops in Queensland is forecast to decline in 2019–20, resulting in lower summer crop production and receipts compared with 2018–19. Widespread rain in Queensland cropping regions in January and February 2020 revived prospects for summer crops, resulting in an increase in late planted grain sorghum. However, income from late sown sorghum crops is likely to be received in 2020–21. Average farm incomes in the Eastern Darling Downs (region 321) are expected to be much lower in 2019–20 as a result of lower overall crop production. In the Darling Downs and Central Highlands (region 322) small reductions in winter crop receipts and an increase in summer grain sorghum receipts are projected to result in slightly higher average farm cash income and farm business profit in 2019–20. However farm profitability in the region will still be well below the level recorded in 2017–18 (Table 10).

Dairy farms in Queensland are predominantly located in the south-eastern corner of the state, although pockets of dairy farms can be found along the Queensland coast as far north as the Atherton Tablelands. Average farm cash income for Queensland dairy farms declined by 42% in 2018–19 due to higher purchased feed costs (which increased by around $50,000 per farm on average) as a result of dry seasonal conditions and high fodder prices. Slightly higher milk prices were offset by lower milk production, and milk receipts per farm remained largely unchanged.

In 2019–20 the financial performance of dairy farms in Queensland is expected to improve slightly (Figure 12). Overall state milk production is projected to fall sharply, partly a result of the exit of farms from dairying. On farms remaining in dairying, milk production is projected to decline due to continued dry seasonal conditions in 2019 and purchased feed costs. Reduced milk production is expected to result in lower average milk receipts, despite a small increase in milk prices. The reduction in milk receipts is expected to be more than offset by a small reduction in purchased feed costs—resulting in average farm cash income increasing to $89,000 per farm in 2019–20, compared with $81,000 in 2018–19.

For the second successive year, average farm business profit in the dairy industry is expected to be negative. In 2019–20 average losses are projected to be $63,000 per farm—reflecting a further run-down in holdings of dairy cattle.

Figure 11 Financial performance, all broadacre industries, Queensland, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 10 Financial performance, by region and industry, Queensland, 2017–18 to 2019–20
average per farm
Industry/region Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 185,700 105,000 (14) 130,000 56,300 –38,000 (56) –53,000
Wheat and other crops $ 246,000 142,000 (34) –102,000 20,400 –5,000 (ns) –361,000
Mixed livestock–crops $ 125,400 94,000 (36) 64,000 10,900 –113,000 (30) –183,000
Beef $ 187,100 108,000 (14) 159,000 68,300 –29,000 (80) –10,000
Sheep–beef $ 131,400 8,000 (ns) 52,000 41,400 –259,000 (49) –212,000
All broadacre industries by region
311: Cape York and the Gulf $ 1,219,900 620,000 (20) 1,125,000 870,100 483,000 (65) 793,000
312:West and South West $ 400,600 –18,000 (ns) 149,000 84,700 –88,000 (ns) –109,000
313: Central North $ 297,100 89,000 (92) 308,000 272,900 81,000 (ns) 309,000
314: Charleville–Longreach $ 137,600 62,000 (53) 163,000 31,400 –170,000 (34) –133,000
321: Eastern Darling Downs $ 106,700 97,000 (33) –9,000 –29,800 –46,000 (61) –206,000
322: Darling Downs and Central Highlands $ 243,300 150,000 (17) 166,000 95,000 –66,000 (71) –59,000
331: South Queensland Coastal $ 97,900 80,000 (22) 97,000 –15,300 –12,000 (ns) –46,000
332: North Queensland Coastal $ 52,300 59,000 (32) 48,000 24,300 0 (ns) –49,000
Dairy industry $ 137,800 81,000 (26) 89,000 18,300 –59,000 (44) –57,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Figure 12 Financial performance, dairy farms, Queensland, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey

South Australia

In 2018–19 South Australian broadacre farms experienced a small decline in financial performance from the record high income achieved in 2016–17 (Figure 13). Drought conditions developed in the central and eastern portion of the Northern Pastoral region (region 411), the eastern and mid-north portion of the Murray Lands and Yorke Peninsula (region 422) and the northern part of the Eyre Peninsula (region 421). Increased numbers of beef cattle and sheep were sold for lower prices, and the size of herds and flocks was reduced. These developments put downward pressure on farm incomes. In the Murray Lands and Yorke Peninsula (region 422) average farm cash income declined in 2018–19. Higher grain prices and carry-over payments on grain delivered in 2017–18 were not sufficient to offset the effects of dry seasonal conditions on crop production and the increased costs of feeding livestock. In regions less affected by drought, including the lower Eyre Peninsula and South East (region 431), higher grains, wool, sheep and lamb prices resulted in increases in average farm cash income.

In 2019–20 farm cash income for South Australian broadacre farms is projected to remain largely unchanged, at an average of $235,000 per farm—around 10% above the average for the 10 years to 2018–19. Despite the expansion in the area affected by drought in 2019, timely spring rains resulted in an increase of around 19% in winter crop production—leading to higher crop receipts. As a result, average farm cash income for both the wheat and other crops industry and the mixed livestock–crops industry is expected to increase slightly in 2019–20. However, some reduction is expected in inventories of grain and livestock on farms in the northern part of the Murray Lands and Yorke Peninsula region. In the broadacre livestock industries, beef cattle turn-off rates in the Northern Pastoral region are expected to decline from the very high rates recorded in 2018–19—leading to lower average farm cash income for this region and for beef farms at the state level. Seasonal conditions in the South East and southern Murray Lands and Yorke Peninsula region were more favourable, and turn-off of beef cattle is expected to increase—boosting incomes for sheep–beef farms. For sheep industry farms, average farm cash income is projected to be lower due to reduced wool prices and lower wool production, and reduced turn-off of sheep and lambs. In the sheep and beef industries, reductions in sheep and beef cattle numbers are projected to result in lower inventory values and reduced farm business profits in 2019–20 compared with 2018–19.

Fires on the Yorke Peninsula, Kangaroo Island and in the Adelaide Hills will have affected production and farm costs in the Murray Lands and Yorke Peninsula region. ABARES estimates of financial performance in 2019–20 were based on surveys conducted prior to these major fire events of November 2019 and January 2020. However, farmland affected by these fires is a relatively small proportion of total farm area in the Murray Lands and Yorke Peninsula region.

In 2019–20 dairy farmers in South Australia are expected to record an average increase in farm cash income of around 15% (Table 11 and Figure 14). Farmgate milk prices are projected to increase, contributing to an increase in average milk receipts per farm. Overall milk production in South Australia is projected to fall, mainly as a result of the exit of farms from dairying. A small reduction in production is also expected on farms remaining in the industry. Continued dry seasonal conditions in 2019 and high prices for hay, silage and feed grains have maintained purchased feed costs, constraining the increase in average farm cash income.

In addition to producing milk and dairy cattle, many South Australian dairy farms now earn receipts from other farm enterprises—including beef cattle, pigs and wine grapes. These receipts have contributed to the rising trend in dairy farm cash incomes in recent years (Figure 14). Income from the sale of temporary water entitlements has also increased in recent years.

Figure 13 Financial performance, all broadacre industries, South Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 11 Financial performance, by region and industry, South Australia, 2017–18 to 2019–20
average per farm
Industry/region Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 239,500 235,000 (9) 235,000 107,900 77,000 (23) 58,000
Wheat and other crops $ 355,000 364,000 (12) 370,000 161,700 188,000 (19) 153,000
Mixed livestock–crops $ 268,900 332,000 (18) 343,000 94,000 111,000 (45) 94,000
Sheep $ 170,700 154,000 (16) 128,000 75,600 11,000 (ns) 7,000
Beef $ 64,400 57,000 (77) 41,000 27,600 –41,000 (79) –70,000
Sheep–beef $ 285,000 109,000 (65) 165,000 236,400 23,000 (ns) 22,000
All broadacre industries by region
411: North Pastoral $ 399,000 326,000 (37) 142,000 154,900 –111,000 (67) –265,000
421: Eyre Peninsula $ 148,500 333,000 (12) 480,000 –20,200 156,000 (26) 298,000
422: Murray Lands and Yorke Peninsula $ 310,200 213,000 (15) 181,000 132,100 32,000 (86) –9,000
431: South East $ 172,400 205,000 (16) 201,000 130,700 123,000 (24) 74,000
Dairy industry $ 152,100 253,000 (8) 292,000 79,900 78,000 (35) 134,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Figure 14 Financial performance, dairy farms, South Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey

Western Australia

In 2018–19 the financial performance of Western Australian broadacre farms was the highest recorded since the commencement of ABARES’s annual AAGIS survey in 1977–78. It continued the strong upward trend in broadacre farm incomes in Western Australia that began in 2013–14 (Figure 15 and Table 12). Higher grain prices in 2018–19 and a large winter crop (estimated to be only slightly less than the record 2016–17 crop) resulted in increased average farm cash incomes on most broadacre farms in the North and East Wheat Belt (region 522) and the Central and South Wheat Belt (region 521). Farm cash incomes for sheep industry farms improved with higher wool and lamb prices in 2018–19. Beef industry farms in the pastoral regions of the Kimberley (region 511) and Pilbara and Southern Rangelands (region 512) 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 531) 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 for Western Australian broadacre farms is projected to decline as a result of reduced grain, oilseed and grain legume production, together with lower grain and wool prices. Farm cash income is projected to decline from an average of $497,000 per farm in 2018–19 to $405,000 in 2019–20—still around 34% above the average for the 10 years to 2018–19. Overall winter crop production declined by just over one third compared with 2018–19. This was 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.

At the industry level, the decline in the financial performance of farms in the wheat and other crops industry in 2019–20 reflects reduced grain production and lower grain prices (Table 12). Carry-over payments on grain delivered in 2018–19 will partially offset the impact of lower grain production on farm cash incomes. Average incomes for mixed livestock–crops industry farms are projected to decline as a result of reduced receipts for grain (due to drought), and lower receipts for wool (due to lower wool prices). Farm cash income for sheep industry farms is also is projected to decline in 2019–20 as a result of lower prices for wool.

Regional differences in farm performance are expected in 2019–20. Farm cash incomes are expected to be lower in both the North and East Wheat Belt (region 522) and the Central and South Wheat Belt (region 521) due to lower crop and wool receipts (Table 12). 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 (region 531), mainly as a result of increased turn-off of beef cattle and higher prices.

On average, dairy farmers in Western Australia are expected to record a decrease in farm cash incomes in 2019–20 of around 6% (Table 12 and Figure 16). Receipts from milk are projected to decrease in 2019–20 by around 2% on average, as a result of lower milk production and reductions in milk prices received by some farms. 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. This is because farmers are expected to sell more beef cattle in 2019–20 to augment farm receipts, leading to a comparatively large decline in trading stocks.

Figure 15 Financial performance, all broadacre industries, Western Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 12 Financial performance, by region and industry, Western Australia, 2017–18 to 2019–20
average per farm
Industry/region Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 428,200 498,000 (7) 405,000 248,500 326,000 (12) 133,000
Wheat and other crops $ 751,500 977,000 (9) 749,000 468,100 712,000 (14) 320,000
Mixed livestock–crops $ 407,200 337,000 (9) 235,000 263,500 202,000 (16) –12,000
Sheep $ 128,800 169,000 (30) 133,000 43,100 74,000 (53) 40,000
Beef $ 264,000 304,000 (22) 407,000 118,900 173,000 (45) 117,000
Sheep–beef $ 161,700 125,000 (ns) 174,000 22,800 –36,000 (ns) 17,000
All broadacre industries by region
511: Kimberley $ 1,047,800 1,363,000 (24) 1,974,000 1,009,800 1,283,000 (42) 1,100,000
512: Pilbara and Southern Rangelands $ 616,400 737,000 (35) 918,000 277,100 353,000 (81) 162,000
521: Central and South Wheat Belt $ 544,000 570,000 (8) 434,000 379,600 383,000 (12) 194,000
522: North and East Wheat Belt $ 360,400 605,000 (15) 460,000 95,400 413,000 (29) 44,000
531: South West $ 126,600 110,000 (25) 136,000 13,600 28,000 (ns) 20,000
Dairy industry $ 298,200 243,000 (12) 228,000 171,300 84,000 (31) 49,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not suppliedexceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Figure 16 Financial performance, dairy farms, Western Australia, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey

Tasmania

Farm cash incomes increased for Tasmanian broadacre farms in 2018–19 (Table 13 and Figure 17), mainly due to increased turn-off of sheep, higher prices for sheep, lambs and wool, and increased production of grain. An increase in receipts from non-broadacre crops, particularly potatoes, was also recorded.

In 2019–20 farm cash income for Tasmanian broadacre farms is projected to increase, due to higher beef cattle and sheep turn-off in response to drier seasonal conditions during 2019 (Figure 17). The run-down in livestock numbers means that average farm business profit is expected to fall in 2019–20 (compared with the previous year). This represents the first year-on-year decrease since 2015–16.

At the industry level, increased sheep turn-off is projected to lead to an increase in average farm cash incomes for sheep industry farms in 2019–20, but a decrease in average farm business profit compared with 2018–19. Farm cash income for sheep–beef industry farms is expected to increase as a result of increased beef cattle turn-off.

In 2019–20 increased crop receipts together with higher lamb prices is projected to result in higher farm cash income for Tasmanian mixed livestock–crops industry farms, on average (Table 13). Reduced planting and production of oilseed poppies is projected to be offset by higher receipts from fodder and vegetables.

Average farm cash income on dairy farms fell substantially between 2017–18 and 2018–19 (Figure 18) due to a surge in fodder costs. Some recovery in farm incomes is expected in 2019–20 as a result of higher milk prices and a small increase in milk production. However, fodder costs are expected to remain high due to the lingering effects of the mainland drought on hay and feed grain prices.

Figure 17 Financial performance, all broadacre industries, Tasmania, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 13 Financial performance, by region and industry, Tasmania, 2017–18 to 2019–20
average per farm
Industry/region Unit Farm cash income Farm business profit
2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 151,000 167,000 (13) 183,000 97,800 117,000 (17) 100,000
Mixed livestock–crops $ 302,600 378,000 (18) 514,000 241,700 302,000 (24) 369,000
Sheep $ 141,100 208,000 (13) 215,000 118,500 164,000 (18) 137,000
Beef $ 113,300 112,000 (31) 85,000 56,700 61,000 (55) 23,000
Sheep–beef $ 230,300 99,000 (70) 169,000 131,200 52,000 (92) 60,000
Dairy industry $ 282,200 135,000 (41) 205,000 215,800 27,000 (ns) 113,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not supplied—exceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey and Australian Dairy Industry Survey

Figure 18 Financial performance, dairy farms, Tasmania, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Dairy Industry Survey

Northern Territory

Northern Territory beef industry farms had historically high financial performance in the 3 years ending 2017–18 due to favourable seasonal conditions, high prices for beef cattle and strong demand for live export cattle (Table 14 and Figure 19).

In 2018–19 drought conditions in the Alice Springs District (region 711), Barkly Tablelands (region 712) and Victoria River District–Katherine (region 713) resulted in increased turn-off of beef cattle for sale and transfer of cattle to other properties by entities operating multiple and interstate properties. Many cattle were transferred to Queensland, and some of these cattle subsequently died in the severe flooding event that occurred in north-western Queensland in February 2019. Increased sale and transfer numbers resulted in farm cash incomes increasing markedly in the Barkly Tablelands and (to a lesser extent) in the Alice Springs District. Farm cash income increased, but high turn-off resulted in an average reduction of around 12% in beef cattle numbers, lower cattle inventory value and lower farm business profit in the Alice Springs District, Barkly Tablelands and Victoria River District–Katherine regions.

In 2019–20 a late start to the northern wet season is projected to result in beef cattle turn-off rates remaining relatively high. Higher cattle prices are projected to result in receipts from the sale of beef cattle remaining similar to 2017–18. However, the number of cattle transferred off properties by entities operating multiple properties is projected to decline—reducing total cash receipts. The number of cattle transferred in from other properties, particularly in the Barkly Tablelands (where seasonal conditions in 2019–20 have improved), is projected to increase—leading to higher average total cash costs. As a result, farm cash income for the Northern Territory beef industry is projected to decline to $1.1 million per farm in 2019–20—still around 8% above the average for the 10 years to 2018–19. A decline in beef cattle numbers and the value of cattle inventories is expected to reduce farm business profit further. Farm business profit for the Northern Territory beef industry is projected to average around $199,000—about 70% below the average for the 10 years ending 2018–19.

Figure 19 Financial performance, all broadacre industries, Northern Territory, 1999–00 to 2019–20
average per farm
y Provisional estimates.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 14 Financial performance, by region and industry, Northern Territory, 2017–18 to 2019–20
average per farm

Industry/region

Unit

Farm cash income

Farm business profit

2017–18 2018–19p RSE 2019–20y 2017–18 2018–19p RSE 2019–20y
All broadacre industries $ 1,000,500 2,784,000 (23) 1,109,000 1,235,000 414,000 (63) 199,000
Beef $ 1,000,500 2,784,000 (23) 1,109,000 1,235,000 414,000 (63) 199,000
All broadacre industries by region
711: Alice Springs District $ 988,300 1,130,000 (25) 696,000 956,900 –59,000 (ns) –459,000
712: Barkly Tablelands $ 2,016,500 15,484,000 (30) 3,382,000 3,777,100 1,052,000 (ns) 357,000
713: Victoria River District–Katherine $ 970,800 954,000 (42) 903,000 925,700 458,000 (53) 551,000
714: Top End Darwin and the Gulf $ –173,500 –585,000 (ns) 216,000 133,400 603,000 (77) –17,000

p Preliminary estimates. y Provisional estimates. RSE Relative standard error. ns Not supplied—exceeds 99%.
Source: ABARES Australian Agricultural and Grazing Industries Survey

References

BOM 2019, Tracking Australia's climate through 2019, Bureau of Meteorology, Canberra, accessed 10 February 2020.

Data and other resources

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, 2016–17 to 2018–19
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.

Download this Farm Performance paper

Last reviewed: 4 August 2020
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