October 9, 2006

Australian beef producers suffer steep drop in income for 2005-06

Average farm cash incomes for Australian beef producers with more than 300 head of beef cattle fell a startling 70 percent to just AUS$26,500 (US$19,700) for 2005-06, according to the latest ABARE report, Australian Beef Industry - Financial performance to 2005-06.

The results were perplexing as cattle prices have been high during this period.

Despite this being the case, farm business profits have fallen, down AUS$7,547 (US$5609) to AUS$13,678 (US$10,166).

Over the period, the average rate of return for the top 25 percent of large, specialist beef producers was 5.3 percent, compared with -3.6 percent for the poorest performing farms.

Farms that did better during the period had large areas and more productive herds. They were also farms less affected by the drought or those which implemented better drought measures. 

Better performing farms also forked out more on beef cattle purchases to rebuild herds or finishing them for resale.