Victoria’s farm profit slump revealed
Farm profits have plummeted to a 20-year low with almost half of surveyed farmers recording losses amid drought conditions. See the latest figures.
Farm profits in Victoria have hit a 20-year low, as high input costs in the midst of drought take their toll.
That’s according to the latest Farm Monitor project results, with the large-scale benchmarking program including comprehensive data from 134 farms collated by Agriculture Victoria.
The results showed negative profits were recorded by 49 per cent of surveyed farms for the 2024-25 financial year, with average earnings before interest and tax (EBIT) decreasing to well below the 10-year average in each region.
This compares to 2023-24 when 48 per cent of surveyed farms showed negative profits.
Drought feeding led to the regional average variable costs in southwest Victoria hitting $726 per hectare - the highest recorded in the project’s 55-year history.
Consecutive years of dry conditions and poor pasture growth led to an increased reliance on supplementary feed, which increased costs, while farmers attempted to minimise these costs by reducing stocking rates.
“Improved red meat prices increased income from stock sales but decreases in stock inventories meant that the increase in farm incomes were not enough to offset the large increases in costs,” the report stated.
The increased supplementary feeding in 2024-25 resulted in the highest purchased feed costs in six years. On average, supplementary feed comprised 30 per cent of the diet on southwest Victoria farms, 22 per cent in northern Victoria and 14 per cent in Gippsland in 2024-25.
As a result, southwest Victoria had the highest purchased feed costs of all the regions at $296/ha – up from $183/ha in 2023-24.
Beef producer Stephen Branson from Mortlake said until the end of June, they had had the driest 24-month period ever recorded on their property.
“So you would expect those kinds of results (from the farm monitor project),” Mr Branson said.
“We are fortunate it wasn’t worse, because commodity prices were relatively OK.”
Mr Branson said the season has completely turned around and there was plenty of grass.
After finishing their main silage in October, Mr Branson said they were raking extra silage.
“We try to have two years of silage ahead of us and this will put us back in front, having a plan (for drought) is important.”
Overall, Gippsland farms recorded a 65 per cent drop in their wool gross margins compared to the five-year average, a 24 per cent increase in prime lamb gross margins and a 38 per cent drop in beef. Meanwhile, gross farm income in Gippsland was $1195/ha, down on the $1358 in 2023-24, and lower than the 10-year average of $1293/ha.
Southwest Victorian farms recorded a 95 per cent fall for wool gross margins compared to the five-year average, 56 per cent fall for prime lamb and 64 per cent fall for beef, while the gross farm income for southwest farms was $1088/ha in 2024-25, up slightly from the previous year when it was $1018/ha, but below the 10-year average of $1309/ha.
In northern Victoria wool gross margins were 55 per cent lower than the five-year average, prime lamb margins were equal and beef was down 40 per cent. Gross farm income was $913/ha for 2024-25 in northern Victoria, compared to the 10-year average of $967.
Victorian Farmers Federation livestock group president Scott Young said the results were “definitely not surprising”.
“All farmers over the past two years have experienced some of the most challenging times in their agriculture careers,” Mr Young said.
“There is a positive turnaround in the season now, so hopefully farmers won’t need to spend as much on hay and supplementary feed, but livestock numbers are also lower, so although prices are higher many won’t be able to take advantage.”
Meanwhile, nearly 60 per cent of south west farms increased their debt in 2024-25, which contrasted with 24 per cent of farms in northern Victoria and 31 per cent in Gippsland.
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