Farm cash incomes are expected to decline for around half of Australia’s broadacre farms in 2017–18 as a result of reduced grain production in most regions and lower prices for beef cattle.
In 2016-17 farm cash income averaged $212, 600 per farm. This was the highest farm cash income recorded in the past 20 years and resulted from record winter grain production and high prices for beef cattle.
Farm cash income for broadacre farms is projected to decline to average $191, 000 per farm in 2017–18. If achieved, this would be the second highest farm cash income recorded nationally and would be 32 per cent above the average for the previous 10 years.
This was according to ABARES Chief Commodity Analyst, Peter Gooday, who addressed the ABARES Outlook 2018 conference in Canberra.
“For beef farms, average incomes in 2017–18 are expected to decline from $150,000 per farm in 2016-17 to $132, 000 in 2017–18. Beef prices fell globally but remain well above average. Farmers in many regions have offset lower prices through increased turnoff following herd rebuilding efforts over the past couple of years,” Mr Gooday said.
“The sheep industry continues to be a shining light. In 2017-18, farm cash incomes are expected to average $170, 000 per farm. This is the highest we’ve seen on sheep farms in at least 20 years in real terms and is driven by solid prices for wool and lamb and greater production of sheep meat and wool.
“The dairy industry has also seen big turnaround in farm cash income, up from $89, 600 in 2016-17 to $137, 000 in 2017-18, mainly as a result of improved milk prices. However, global supply remains high so there are some risks on the downside in the next couple of years.
“In the grains industry, farm cash incomes have declined in 2017-18, with yields returning to more normal levels and prices remaining soft. Grain growing regions in Queensland, North Western New South Wales and the Eyre and Yorke Peninsulas in South Australia are projected to record much reduced farm cash incomes due to lower grain production.”
Mr Gooday also told delegates that ABARES has recently surveyed over 2,200 farmers to find out about their use of information and communication technologies.
“Preliminary results indicate that the type and value of ICT assets varies across industries, mainly reflecting the availability of technologies to suit particular production systems,” Mr Gooday said.
“The most striking example of this is the widespread use of GPS guided tractors and harvest monitoring technologies on cropping farms, which is the main reason this industry has the highest overall value of ICT assets. Wheat and other crop farms held ICT assets with an estimated replacement value of $33,000 with around 80 per cent of this value in GPS equipment.
“Confirming some well-known issues, the survey also collected information about farmers’ access to the internet and barriers they face in adopting new technologies.
“Broadacre farmers reported that on average 45 per cent of their farm area can access fixed internet or mobile data. This is lower than dairy and vegetable farms, which were both at around 65 per cent of farm area, and likely reflects where these farms tend to be located.
“For broadacre farms, the most commonly reported barrier to adopting new ICT-based technologies was telecommunication problems. Over 55 per cent of broadacre farms, 40 per cent of dairy farms and 35 per cent of vegetable farms reported their business operations were impaired because of mobile phone or internet issues.”
Mr Gooday indicated that ABARES plans to use these data in future research to establish the links between farm performance and the use of ICT.