2019–20 to 2021–22
- An estimated 38% of Australian farm businesses are classified as broadacre livestock farms (34,000 farms), of which 19,500 were beef specialists, 10,000 were sheep specialists, and around 4,500 produced a mix of beef cattle and sheep (see Methodology).
- High commodity prices in 2021–22, particularly for beef cattle, and good seasonal conditions were the major drivers of continued strong farm financial performance of livestock farms across Australia.
- At the national level, average farm cash income for livestock farms is estimated to have increased by 10% in 2021–22 to $202,000 per farm. High prices for beef cattle and sheep are projected to have offset fewer sales of finished livestock, with many farmers continuing to rebuild herds and flocks since the drought (Figure 1). The timing of purchases of inputs and sales of livestock 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 livestock farms in 2021–22 is estimated to have been around 49% above the long-term average of $136,000 per farm in real terms for the 10 years to 2020–21.
- The percentage of livestock farms with negative net income in 2021–22 is estimated to have been around 12% (Figure 2).
- The average rate of return (excluding capital appreciation) for livestock farms is estimated to have been 2.0% per farm in 2021–22, above the 10-year average of 0.7%.
- In 2021–22, average farm cash incomes declined for livestock farms in Tasmania (–16%) and Victoria (–7%), but increased in the Northern Territory (99%), New South Wales (28%), Western Australia (19%), South Australia (11%) and Queensland (3%).
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Specialist beef farms
- The average farm cash income for beef specialist farms at the national is estimated to have been around $255,000 per farm in 2021–22, around 90% above the average in real terms for the previous 10 years (Map 1).
- Despite higher incomes overall, a number of farms in south-east Queensland, the Alice Springs region of the Northern Territory and the Pilbara of Western Australia recorded incomes below the longer-term average. This appears to have mainly been a result of herd rebuilding and reduced sales of cattle.
- The average rate of return (excluding capital appreciation) for beef specialist farms is estimated to have been 2.5% in 2021–22, higher than the 10-year average of 0.6% per farm.
Specialist sheep farms
- Farm cash income for sheep specialist farms is estimated to have decreased slightly in 2021–22 to $115,000 per farm but remained 3% above the average in real terms for the previous 10 years. Relatively high sheep and lamb prices offset fewer lambs sold for slaughter.
- The average rate of return (excluding capital appreciation) for sheep specialist farms is estimated to have been 1.0% in 2021–22, in line with the long-term average.
- Debt is an important source of funds for farm investment and ongoing working capital for many livestock farms. At the national scale, average livestock farm debt declined by 7% from 2019–20 to 2020–21 (Figure 3). Higher incomes increased the capacity of farms to reduce debt for working capital and the proportion of livestock farms purchasing land declined in 2020–21 due to high land prices.
- Farm equity ratios increased to an average of 94% in 2020–21 (Figure 4). Improvements in farmers equity position is partly due to increases in average land values in 2020–21.
- Among a range of factors, the viability of a farm business 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 livestock farms declined to a record low in 2020–21 to 9% (Figure 4) due to continued low interest rates, reduced debt and high farm incomes.
- Livestock farms with 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 livestock farms in this category was estimated to have been around 1.5%, down from an average of 2.5% over the previous 10 years.
Liquid assets and non-farm income
- Many livestock 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 livestock 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 on farm was substantially lower for larger farms.
- Farm Management Deposits (FMDs) are an important financial risk management tool for many livestock farms and forms part of their liquid assets. At 30 June 2021, an estimated 28% of livestock farms held FMD accounts, at an average value of $218,000 per farm.
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)):
- 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.
- 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.
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.
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.