Australian beef: financial performance of beef farms, 2014-15 to 2016-17

Overview  
 This report presents the detailed financial performance of beef cattle producing farms in 2014-15, 2015-16 and 2016-17, and discusses incomes, investment, farm debt, and costs of beef production in a historical context. The report draws on data from the ABARES annual Australian Agricultural and Grazing Industries Survey (AAGIS). The report was commissioned by Meat & Livestock Australia (MLA) 

 This report is a collation of chapters that have been previously published online. 

Farm financial performance (published 18 May 2017) 
 This chapter presents estimates of the incomes, profits, costs and rates of return for beef farms. 
 Key Issues  
 Average farm cash income of Australian beef farms is projected to increase by around 10 per cent in 2016-17 to $204,000 per farm. Farm cash income in 2016-17 is projected to be the highest in over 20 years, an estimated 108 per cent higher than the average between 2000-01 and 2015-16 (in real terms*). The expected increase in incomes is a result of higher beef cattle prices. 

 * Note: real dollar values are adjusted to remove the effect of inflation. 

Farm debt and equity (published 12 July 2017) 
 This chapter presents estimates of the debt, equity, and debt-servicing capacity for beef farms. 
 Key Issues  
 Average farm debt of Australian beef farms is estimated to have increased by around 9 per cent to $497,000 in 2015-16 (in 2016-17 dollars). Average farm debt for beef farms is projected to decrease slightly in 2016-17. The average equity ratio of beef farms has remained steady at around 90 per cent from 2000-01 to 2015-16. The proportion of farm receipts needed to fund interest payments is projected to be around 6 per cent in 2016-17. 

Farm capital and investment (published 8 August 2017) 
 This chapter presents estimates of farm capital and farm investment for beef farms. 
 Key Issues  
 The total value of capital for Australian beef farms increased by around 55 per cent in real terms from 2000-01 to 2015-16. On a per farm basis, total capital increased by 98 per cent to an estimated $5.4 million per farm in 2015-16. The average value of land and fixed improvements per hectare for beef farms increased by 105 per cent from 2000-01 to 2015-16, with an average annual return on land appreciation of 5.2 per cent. 

Physical characteristics (published 9 November 2017) 
 This chapter presents estimates of physical characteristics for beef farms. 
 Key Issues  
 From 2000-01 to 2015-16 the total number of Australian beef farms fell by 22 per cent. Most of the decline was in the Southern region with the number of beef farms in the Northern region remaining relatively unchanged. Over the period, the total number of beef cattle in the Northern region increased while the number of cattle in the Southern region remained relatively steady. 

Cost of production (published 28 September 2017) 
 This chapter presents and discusses cost of production estimates for beef farms. 
 Key Issues  
 Over the three years to 2015-16 the average total cost of beef production was similar in northern and southern Australia, at 193 cents per kilogram live weight in northern Australia and 199 cents in southern Australia. The on-farm per kilogram live weight cost of beef production increased between 2013-14 and 2015-16. Higher beef cattle prices in 2014-15 and 2015-16 resulted in operating margins increasing relative to the very low margins recorded in 2013-14. Total costs of production per kilogram in southern and northern Australia declined as herd size increased. Small beef farms (with less than 400 beef cattle) generally covered their cash operating costs. However, most did not cover capital depreciation or the value of unpaid owner-manager, partner and family labour. 

 Average on-farm per kilogram live weight cost of beef production declined over the three years to 2016–17. 

Tags: Australia, Farming, agricultural commodities, beef, costs, farms, financial performance, income, profit, receipts
Organization: Australian Bureau of Agricultural and Resource Economics and Sciences