According to the recently released report "Australian beef, financial performance of beef cattle producing farms, 2010-11 to 2012-13" by ABARES, average farm cash incomes for both northern and southern producers declined, year-on-year, during 2012-13.

Despite a significant increase in beef cattle turnoff, underpinning the decline was weaker cattle prices due to poor seasonal conditions across the majority of regions.

Northern farms are segregated into categories by cattle herd size, which are “small” (100-400 head), “medium” (400-1600 head), “large” (1,600-5,400 head) and “very large” (>5,400 head). Interestingly, higher average farm cash incomes during 2012-13 were estimated for the “medium” and “large” herd size groups, as larger increases in turn off are estimated to have more than offset the reductions in average prices received. The “medium” category rose 21pc year-on-year, to an estimated $94,360 per farm, while “large” enterprise farm cash receipts increased 17pc, to $223,579 per farm.

However, the “very large” category estimated farm cash income declined 30pc year-on-year, to $464,134 per farm. Overall, taking all categories into account, average beef farm cash incomes for northern Australia are estimated to have declined slightly in 2012-13, to $100,000 per farm.

Like the northern beef industry, average southern beef cattle receipts are estimated to have declined 2pc year-on-year during 2012-13, due to lower cattle prices and despite increased beef cattle turnoff. The significant difference between the northern and southern beef industry is the greater enterprise diversification in the south, with a combination of sheep, wool, grain and cattle incomes from the one business much more common.

For all beef cattle producing farms, farm cash income declined 15pc in 2012-13, to an estimated $84,000 per farm, while for specialist cattle producers, the decline was much less, down 4pc year-on-year, to $52,000 per farm.

In summary, the declines in farm cash incomes have eroded the gains made during 2011-12, and with the very high slaughter, and expected lower branding rates for 2013-14, farm cash incomes are likely to remain tough, particularly in the north.

This certainly highlights the impact that a sudden swing in seasonal conditions has on farm cash incomes, and ultimately, profitability.   

The ABARES report can be viewed on the ABARES website here

Source: MLA