Farm incomes are set to plunge by an average 41 per cent across the nation's broadacre farms this financial year.
A looming drought and diving livestock prices are expected to push farm cash incomes down to an average of $197,000 in 2023-24, from $332,000 last year, according to the Australian Bureau of Agricultural and Resource Economics and Sciences, which today released its first income estimate for this financial year.
And farm business profit is expected to fall even further, from $240,000 per farm in 2022-23 to just $56,000 this financial year. However, ABARES said this profit figure did not take into account the debt position of farmers.
The ABARES Farm Performance Forecast revealed:
- Cropping farm incomes are forecast to decline by 45 per cent to average about $627,000 nationally.
- Incomes for beef farms are tipped to come down 27 per cent to $132,000.
- Sheep farm incomes could drop 38 per cent to $36,000, due to declines in sheep and lamb prices and wool returns remaining low.
The ABARES report said the falls would come off the back of record incomes in 2021-22 and 2022-23, and income levels are not expected to be as bad as during the drought periods of 2004-2010 and 2018-2020.
"Forecast farm incomes and profits for 2023-24 are still expected to be above those observed during recent drought years at a national average level," the report said.
In the cropping sector, declines in national production of wheat (36 per cent), barley (26 per cent) and oilseeds (38 per cent) would push down revenue.
"However, strong soil moisture to start the season means that crop production is predicted to remain around the long-term average," the report said.
For beef farmers, the 27 per cent drop for the sector would be due to "large decreases in prices for beef cattle and sheep," but ABARES said beef incomes would "remain in line with the long-term average for beef farms, after record incomes in 2020-21 and 2021-22".
Declining sheep and lamb prices, and continued low wool prices would drive a 38 per cent income drop, with the hardest hit areas for sheep and wool incomes expected to be parts of southern Victoria and South Australia, and western Western Australia.
Meat and Livestock Australia last month predicted sheep producers would move back to wool production in response to falling lamb and sheep prices.
The released income figures did not include dairy or horticulture.
ABARES executive director Jared Greenville said the predicted drop took incomes close to the levels of about three years ago, when farmers were coming out of drought.
"It is a fair bit of a drop-off (but) in real terms it is not sitting too bad across the last 20 years," Dr Greenville said.
"If we go back about 10 years ago, it is about the income we were averaging."
However, he noted this current drop had come off a period where commodity prices had been relatively high.
He also said the income drop was not uniform across Australia.
"Some areas are holding up in terms of production. We have good cropping production outcomes in Victoria and South Australia, and that is helping with the total production volume."
Dr Grenville said some areas, such as livestock regions in South Australia and Western Australia, were seeing income drops due to price declines, while other areas such as cropping-focussed parts of northern NSW and southern Queensland would see incomes slide mainly because of a drier climate.
However, a favourable recent weather pattern near the Victoria, NSW and South Australian border has also led to a forecast of stronger incomes in that region.
