June 22, 2009

Average beef farm cash incomes are anticipated to increase sharply in 2008-09, assisted by improved seasonal conditions and higher cattle turnoff, particularly across northern Australia, according to a recent report by the Australian Bureau of Agriculture and Resource Economics (ABARE).

Continued growth in cattle herd across northern Australia in 2008-0 and an improvement in overall seasonal conditions underpinned ABARE's forecast increase for northern farm cash incomes. Despite a 14-percent growth in farm cash costs, higher turnoff rates in 2008-08 contributed to increased cash receipts, with average farm cash incomes projected to soar 47 percent on-year to A$105,200.

Farm cash incomes are expected to significantly increase in 2008-09 for small, medium and large northern beef farms, while average cash income for very large farms is expected to drop from 2007-08 levels.

The 59-percent decline in farm cash incomes for very large farms across northern Australia, to A$288,900 in 2008-09, is mainly due to rising costs, including cattle purchases, fodder, fuel and labour. Beef cattle purchase costs faced by larger operators in northern Australia alone are forecast to have increased 97 percent in 2008-09, to A$482,200, compared to an increase of 36 percent across all northern beef farms, averaging A$62,900.

Across southern Australia, farm cash incomes are forecast to also increase in 2008-09. Average farm cash incomes for southern beef farms are forecast to increase 59 percent on 2007-08 to A$65,900, with increases across all farm sizes. Contributing to the higher farm cash incomes for southern beef producers for 2008-09 is a forecast 32-percent rise in beef cattle receipts and a 38-percent increase in crop receipts, along with lower fodder, fuel and finance. However, partly offsetting the higher sales and crops receipts is a forecast 77-percent increase in beef cattle purchases.

US$1 = A$1.24913 (Jun 22)