ABARES Australian Agricultural and Grazing Industries Survey (AAGIS) projects an overall decline in average incomes of Australian broadacre farms in 2014-15. Reductions in grain production are projected to result in a decline in income for Victorian, Western Australian and South Australian farms. In New South Wales, taken as a whole, farm cash income is projected to decline only slightly compared with that recorded in 2013-14. In contrast, an increase is projected for income in Queensland and the Northern Territory, mainly as a result of higher beef cattle prices. In Tasmania higher beef cattle, sheep and lamb prices are projected to result in increases in farm incomes.
Financial pressure increased on farm businesses in several industries and regions during 2012-13 as a result of the combination of low beef cattle and milk prices, dry seasonal conditions, high farm debt and the erosion of farm equity through reductions in land values. Those most affected included the beef industry in northern Australia, grain producers in the Western Australian wheat belt and dairy farmers in western Victoria.
Higher farm incomes in 2013-14 reduced some pressure, particularly in Western Australia and the southern dairy industry. Pressure was also reduced more broadly by reduction in broadacre farm debt and a decline in interest rates. However, financial pressure continued in regions highly reliant on beef cattle production and in the northern New South Wales and Queensland regions subject to prolonged drought conditions.
In 2014-15 incomes are projected to increase for beef industry farms in all states as a result of higher cattle prices. The increase in income will reduce financial pressure in some regions but may have only a small effect in regions constrained by the reduced availability of saleable cattle after two years of high turn-off. Financial pressure is likely to continue in 2014-15 as herds and flocks are rebuilt. Further, incomes are projected to remain low for cropping farms that were subject to dry conditions well into 2014-15.