A deep dive into the finances of thousands of producers reveals trends
A major study has found the average age of beef and sheep farmers is rising at a time when financial returns are lifting.
If you are a sheep cockie reading this, chances are you are now 62 years of age.
And if you’re a beef producer, you will probably be a tad older, at 64.
These are the average ages for farmers in the two sectors, according to the latest ABARES data.
In the past 20 years, the average ages have risen from 53, or by nine years, for sheep farmers and from 58, or by six years, in the beef industry.
The statistics come from a major benchmarking study surveying 37,000 livestock farmers across Australia, conducted by ABARES in conjunction with Meat & Livestock Australia.
The study reveals a fascinating set of numbers, which points to improved returns for livestock producers across much of Australia, but, declining returns on assets managed over the two decade period.
In 2019–20, an estimated 72 per cent of Australian broadacre farms were classified as livestock farms (37,210).
The financial performance of these farms improved in 2020–21, with better seasonal conditions resulting in reduced expenditure on fodder, higher receipts from beef cattle but lower receipts for sheep, lambs and wool because of a focus on flock rebuilding due to improved seasonal conditions. At the national level, farm cash income increased by around $32,000 to average $123,000 per farm which is about 14 per cent above the longer-term average for the 10 years to 2019–20.
MLA market analyst Stephen Bignell said the average areas farmed for beef lifted 8.2 per cent.
While beef producers in 2000 made, on average, a net profit before tax of $75,000, their return on assets was 3.3 per cent.
Travel forward 20 years and the profit figure has lifted to $115,000 but the return has declined to 1.9 per cent.
A similar pattern is true for sheep. Net profit before tax has moved from $73,000pa to $107,000, but returns on assets managed have decline from 3.8 per cent to 2.3pc.
The average producer in 2000 was running 779 cattle at a value of $946/head and now, the numbers are 789 at $1272.
Sheep producers meanwhile are running fewer sheep on average; going from 3790 to 2444 in the same period but values have risen from $39/head to $159, largely thanks to development of the export lamb markets.
Cattle Council of Australia president Markus Rathsmann said the improvement in the financial position of many producers was welcome, but for those rebuilding their herds, it made conditions harder.
“For many people in Northern Australia they’ve had six or eight years of drought, which has been a terrible time, but it is great to see good seasons and commodity price now which is good for the next generation,” he said.
While the ageing profile of the industry was “not a good sign” he suggested the restructure of the dairy industry may have increased the average age of beef producers as downsizing dairy farmers moved across to beef.
Mr Rathmann said the declining rates of returns on assets was critical from a business decision point of view, but not a figure he personally took into consideration.
“That because the farm is also my home, and my lifestyle,” he said.
He attributed the decline in returns down to “the huge increases in the value of pastoral land or farms”, and while he said that made it harder for new entrants to buy land, there were still “many opportunities for people to lease land or contract”.
Reflecting on his time in the industry over the past 20, or even 40 years, Mr Rathmann said the industry was “fundamentally a much better place”.
Australia’s beef industry was much better regarded on the international stage, producing products to a high standard with integrity systems and diverse markets developed by MLA and processors.
Biosecurity had also been improved to “adequately meet the task” and ensure the diseases-free reputation Australia enjoyed, and the role of women was now more prominent and recognised, he said.
MORE
GOVT FAILING INDUSTRY ON METHANE RESEARCH
How one of Australia’s oldest beef producing families is hitting carbon markets
One of the Western District’s oldest farming families is taking bold leaps into some of the newest and constantly evolving markets of branded carbon-neutral beef and soil carbon.
Duxton Water announce record half-year profit
Corporate water holder Duxton Water Limited has announced its highest ever half-year net profit, as the federal government continues its water recovery efforts.