Australian farms expected to treble profits in 2021

Key points:

  • ABARES has released the results of their farm performance survey
  • The ROI for Australian farms is expected to triple this financial year to 1.6%
  • Livestock purchases make up the biggest expense for the average Australian broadacre farm, as feed and fodder prices fall.

ABARES (The Australian Bureau of Agricultural and Resource Economics and Sciences) has released its annual farm performance survey results. The results predict good profitability for livestock, grain and mixed farming enterprises on the back of improved seasonal conditions that have driven increased farm receipts. The average Australian farm is expected to record a profit of $167,000 in 2021. The results are positive for farmers, especially given they follow two years of negative returns.

Regarding inputs, livestock purchases make up the biggest expense for the average Australian farm this year. However, fodder costs are expected to drop in the 2020–21 financial year, as the increased rain has reduced the reliance on fodder and supplementary feed. Other inputs have not been significantly impacted by COVID-19, except for labour, which has been harder to source.

This year, broadacre farm returns are expected to exceed the 10-year average by 9%. This builds on producer confidence that is underpinning both the national herd and flock rebuilds.

It is hoped that the 2021–22 financial year will bring another productive season, which will allow farms to build on the predicted profitability for 2021.

The ABARES farm performance data allows producers to analyse farm profitability based on industry and locations and provides a thorough breakdown of costs and income sources.

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