Extract from Australian farm survey results 2008–09 to 2010–11, produced by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) See full report here

Farm performance: broadacre and dairy farms

Peter Martin and Paul Phillips

• The average financial performance of Australian broadacre farms is projected to improve markedly in 2010–11.
• At the national level, average farm cash income for broadacre farms is projected to increase from $58 900 a farm in 2009–10 to $82 000 a farm in 2010–11.
• Farm cash incomes are projected to increase in all eastern states because of increased crop and livestock production and higher prices for broadacre commodities. The largest projected increase in farm cash income is in South Australia, driven in part by record winter crop production.
• In contrast, reduced farm cash incomes are expected for broadacre farms in Western Australia as a consequence of severe drought in southern Western Australia.
• High rainfall and flooding in some areas damaged fences, roads, irrigation structures and farm buildings and are expected to result in increased expenditure on repairs.
• Abundant pasture growth and higher sheep, lamb and wool prices have increased farm cash incomes for sheep farms. Farm cash income for sheep industry farms are projected to average $80 000 a farm, the highest farm cash income recorded since 1989–90, in real terms.
• Farm cash income is projected to improve for dairy farms in southern regions in 2010–11 in response to a small increase in milk prices and increases in on-farm fodder production.
• Overall, broadacre and dairy farms had strong farm equity at 30 June 2010 and new investment in machinery, vehicles, plant and improvements was the highest recorded in more than 20 years in 2008–09 and 2009–10.

The financial performance of broadacre farms in eastern Australia is expected to improve in 2010–11, according to
estimates for broadacre farms in the ABARES Australian agricultural and grazing industries survey.

Well above average rainfall across most of eastern and northern Australia, accompanied by higher prices for most
broadacre commodities, are projected to result in average farm cash incomes in 2010-11 being the highest recorded in real terms since 2004-05. For broadacre farms, farm cash income is projected to increase to average $82 000 a farm in 2010-11, and for dairy farms, farm cash income is projected to increase to average $100,000 a farm.

However, extremely wet conditions in the eastern states and drought in southern Western Australia have resulted in wide variations in the financial performance of farms across states and industries.

In the eastern states, the combination of increased crop production, excellent pasture growth allowing increased livestock production, and higher prices for grains, sheep, lamb, wool and beef cattle is expected to result in increases in average farm cash incomes in 2010-11. Farm cash incomes projected for the eastern states in 2010–11 would have been higher were it not for the substantial reductions in grain quality as a result of the effect on winter crops of high and untimely rainfall at harvest, particularly in Queensland, New South Wales and Victoria. These reductions have been taken into account in ABARES forecasts.

Improvement in broadacre farm financial performance is projected for all states except Western Australia in 2010-11.
Crop and livestock production in Western Australia has been sharply reduced by drought conditions and, despite higher commodity prices, farm cash incomes are projected to decline in that state in 2010-11.

Farm cash incomes for sheep farms are projected to improve in 2010-11 and to be the highest recorded since 1989-90, in real terms. Higher wool, sheep and lamb prices are expected to be the main drivers of this increase in farm cash income, given production remains constrained by low sheep numbers.