Agriculture and Fisheries in the Greater Melbourne region of Victoria, 2015 ABARES
Agriculture and Fisheries in the Greater Melbourne region of Victoria, 2015
Research by the Australian Bureau of Agricultural
and Resource Economics and Sciences
About my region 15.15
March 2015
Agriculture and Fisheries in the Greater Melbourne region of Victoria, 2015 ABARES
© Commonwealth of Australia 2015
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Cataloguing data
ABARES 2015, Agriculture and Fisheries in the Greater Melbourne region of Victoria, 2015, About my region 15.15, Canberra, March. CC BY 3.0.
ISBN 978-1-74323-075-6
ABARES project 43009
Internet
Agriculture and Fisheries in the Greater Melbourne region of Victoria 2015is available at agriculture.gov.au/abares.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)
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The Australian Government acting through the Department of Agriculture, represented by the Australian Bureau of Agricultural and Resource Economics and Sciences, has exercised due care and skill in preparing and compiling the information and data in this publication. Notwithstanding, the Department of Agriculture, ABARES, its employees and advisers disclaim all liability, including for negligence and for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying upon information or data in this publication to the maximum extent permitted by law.
Acknowledgements
ABARES relies on the voluntary cooperation of farmers participating in the annual Australian Agricultural and Grazing Industries Survey, Australian Dairy Industry Survey, and Australian Vegetable Growing Farms Survey to provide data used in the preparation of this report. Without their help, these surveys would not be possible. ABARES farm survey staff collected most of the information presented in this report through on-farm interviews with farmers.
This regional profile was updated by Therese Thompson, Haydn Valle, Timothy Connolly, Lucy Randall and Kasia Mazur.
Contents
1Regional overview
Employment
2Agriculture sector
Value of agricultural production
Number and type of farms
Farm financial performance—Victoria
3Fisheries sector
References
Tables
Table 1 Number of farms, by industry classification, 2012–13
Table 2 Financial performance, Victoria broadacre industries, 2011–12to 2013–14, average per farm
Table 3 Farm cash income of Victoria broadacre farms, by region, 2012–13to 2013–14, average per farm
Table 4 Financial performance, Victoria dairy industry, 2011–12to 2013–14, average per farm
Table 5 Physical and financial performance, vegetable growing farm businesses, Victoria, 2012–13and 2013–14
Figures
Figure 1 Employment profile, Greater Melbourne region, November 2014
Figure 2 Value of agricultural production, Greater Melbourne region, 2012–13
Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Melbourne, 2012–13
Figure 4 Real farm cash income, broadacre industries, average per farm
Figure 5 Real farm cash income, grains industry, average per farm
Figure 6 Real farm cash income, sheep industry, average per farm
Figure 7 Real farm cash income, beef industry, average per farm
Figure 8 Real farm cash income, dairy industry, average per farm
Figure 9 Real farm cash income, vegetable growing farm businesses, Victoria, 2005–06to 2013–14
Maps
Map 1 Broad agricultural land use of the Greater Melbourne region of Victoria
Map 2 Agricultural industries of the Greater Melbourne region of Victoria
1
Agriculture and Fisheries in the Greater Melbourne region of Victoria, 2015 ABARES
1Regional overview
The Greater Melbourne region comprises 29local government areas and parts of five others. It includes Melbourne and the major centres of Bacchus Marsh, Cockatoo, Frankston, Healesville, Macedon, Sandringham and Werribee. The region covers a total area of around 10000square kilometres or 4per cent of Victoria’s total area and is home to approximately 4000000people (ABS 2011).
Agricultural land in the Greater Melbourne region occupies 4310square kilometres, or 43per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 1930square kilometres, or 19per cent of the region. The most common land use by area is grazing modified pasture, which occupies 3230square kilometres or 32per cent of the Greater Melbourne region.
Map 1Broad agricultural land use of the Greater Melbourne region of Victoria
Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)
Map 2 Agricultural industries of the Greater Melbourne region of Victoria
Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)
Employment
Australian Bureau of Statistics (ABS) data from the 2014 Labour Force Surveyindicate that around 2.22million people were employed in the Greater Melbourne region. The Greater Melbourne region accounts for 77per cent of total employment in Victoria and 14per cent of all people employed in the Victoria agriculture, forestry and fishing sector.
Health care and social assistance was the largest employment sector with 265200people followed by with retail trade 243000people (Figure 1). Other important employment sectors in the region weremanufacturing (220700people), professional scientific and technical services (217500people) construction (180400people) and education and training (177300people).The agriculture, forestry and fishing sector employed 12400people, representing less than 1per cent of the region’s workforce.
Figure 1 Employment profile, Greater Melbourne region, November 2014
Note: Annual average of the preceding 4quarters.
Source: Australian Bureau of Statistics, cat. no. 6291.0, Labour Force, Australia
2Agriculture sector
Value of agricultural production
In 2012–13, the gross value of agricultural production (GVAP) in the Greater Melbourne region was $1.3billion, which was 11per cent of the total gross value of agricultural production in Victoria ($11.6billion). This is the most recent year for which ABS data are available.
The Greater Melbourne region has a diverse agricultural sector. The most important commodity in the Greater Melbourne region based on the gross value of agricultural production was vegetables (Figure 2). In 2012–13, vegetables contributed 32per cent ($400million) to the value of agricultural production in the region. The main vegetable crops were mushrooms ($61million), lettuce ($50million) and potatoes ($26million). Poultry accounted for 21per cent ($262million) and nurseries, cut flowers and turf contributed 19per cent ($240million). Fruit and nuts (excluding grapes) contributed 12per cent ($146million), with the main crops being strawberries ($86million), apples ($40million) and cherries ($6million).
In 2012–13, the Greater Melbourne region accounted for around 98per cent of the total value of Victorian strawberries, 87per cent of the total value of lettuce, and 76per cent of the total value of mushrooms.
Figure 2 Value of agricultural production, Greater Melbourne region, 2012–13
Source: Australian Bureau of Statistics, cat. no. 7503.0, Value of agricultural commodities produced, Australia
Number and type of farms
ABS data indicate that in 2012–13there were 3031farms in the Greater Melbourne region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 10per cent of all farm businesses in Victoria.
Table 1 Number of farms, by industry classification, 2012–13
Industry Classification / Greater Melbourne region / Victoriano. / % / no. / %
Beef Cattle / 915 / 30 / 8219 / 27
Fruit and nuts / 335 / 11 / 2275 / 7
Vegetable / 304 / 10 / 691 / 2
Nurseries, Cut Flowers and Turf / 221 / 7 / 330 / 1
Other livestock / 197 / 7 / 918 / 3
Poultry / 162 / 5 / 294 / 1
Dairy / 96 / 3 / 4733 / 15
Sheep / 50 / 2 / 3774 / 12
Mixed livestock / 36 / 1 / 1395 / 5
Mixed grains and livestock / 22 / 1 / 2224 / 7
Grain growing / 21 / 1 / 2388 / 8
Other / 671 / 22 / 3642 / 12
Total Agriculture / 3031 / 100 / 30884 / 100
Note: Estimated value of agricultural operations greater than $5000.
Source: Australian Bureau of Statistics
Farms are classified in Table 1 according to the activities that generate most of their value of production. Beef cattle farms (915farms) were the most common, accounting for 30per cent of all farms in the Greater Melbourne region, and 11per cent of all beef cattle farms in Victoria.
There is a large percentage of small farms in the region in terms of their value of agricultural output. Estimated value of agricultural operations (EVAO) is a measure of the value of production from farms and a measure of their business size. Around 53per cent of farms in the Greater Melbourne region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 3per cent of the total value of agricultural operations in 2012–13. In comparison, 19per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 85per cent of the total value of agricultural operations in the region.
Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Melbourne, 2012–13
Source: Australian Bureau of Statistics
Farm financial performance—Victoria
Each year, ABARES interviews Australian broadacre, dairy and vegetable producers as part of its annual survey program. Broadacre industries covered in this survey include the grains, grains–livestock, sheep, beef and sheep–beef industries. The information collected is a basis for analysing the current financial position of farms in these industries and expected changes in the short term. This paper uses data from the ABARES Australian agriculture and grazing industries survey (AAGIS), Australian dairy industry survey (ADIS), and Australian vegetable growing industry survey to report estimates of financial performance indicators (Box 1) for broadacre, dairy and vegetable farms in Victoria.
Box 1 Definitions
Major financial performance indicators
- Total cash receipts: total revenues received by the business during the financial year.
- Total cash costs: payments made by the business for materials and services and for permanent and casual hired labour (excluding owner manager, partner and family labour).
- Farm cash income:total cash receipts – total cash costs
- Farm business profit:farm cash income + changes in trading stocks – depreciation – imputed labour costs
- Profit at full equity: return produced by all the resources used in the business, farmbusinessprofit + rent + interest + financeleasepayments – depreciation on leased items
- Rate of return: return to all capital used, profit at full equity * 100 / total opening capital
- Equity ratio: Farm capital minus farm debt expressed as a percentage of farm capital
Industry types
- Grains: farms mainly engaged in producing broadacre crops such as wheat, coarse grains, oilseeds and pulses, and including farms running sheep and/or beef cattle in conjunction with substantial broadacre crop activity.
- Sheep: farms mainly engaged in running sheep.
- Beef: farms mainly engaged in running beef cattle.
- Dairy: farms mainly engaged in milk production.
- Vegetable: farms mainly engaged in growing vegetables.
Performance of broadacre farms—Victoria
Farm cash income for Victorian broadacre farms declined from an estimated average of $92310per farm in 2011–12to an average of $85600per farm in 2012–13, mainly as a result of lower livestock prices and reduced grain production (Table 2).
In 2013–14, receipts from sheep, lambs and wool are projected to increase as a result of higher prices. However, despite increased turnoff of beef cattle, lower saleyard prices are projected to result in little change in beef cattle receipts. Receipts from cropping are projected to remain similar to 2012-13, with only a small increase in winter crop production and lower prices for canola, barley and some grain legumes. On average, farm cash income for broadacre farms in Victoria is projected to decline slightly to $82000per farm in 2013–14, around 12per cent above the ten-year average to 2012–13of $73000per farm.
Overall, farm cash incomes are projected to increase in the Mallee region, although farm cash incomes vary greatly within this region. Farm cash income is projected to decline slightly in the Wimmera mainly as a result of lower prices for some grains and a larger decline is projected in the Central North due to the additional impact of lower beef cattle prices. In southern and eastern Victoria, increased cattle turn-off together with higher sheep, lamb and wool prices are projected to result in a small increase in average farm cash income (Table 3).
Figure 4 Real farm cash income, broadacre industries, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 2 Financial performance, Victoria broadacre industries, 2011–12to 2013–14, average per farm
Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14yTotal cash receipts / $ / 303990 / 279700 / (9) / 278000
Total cash costs / $ / 211680 / 194200 / (10) / 196000
Farm cash income / $ / 92310 / 85600 / (11) / 82000
Farms with negative farm cash income / % / 20 / 25 / (18) / 28
Farm business profit / $ / 8530 / 12400 / (68) / –2000
Profit at full equity excluding capital appreciation / $ / 36060 / 37200 / (27) / 22000
Farm capital at 30 June a / $ / 2902350 / 2820700 / (10) / na
Farm debt at 30 June b / $ / 278170 / 252400 / (15) / 255000
Equity ratio b / % / 90 / 91 / (1) / na
Rate of returnexcluding capital appreciation c / % / 1.3 / 1.3 / (22) / 0.8
Off-farm income of owner manager and spouse b / $ / 37960 / 32200 / (14) / na
Note: a Excludes leased plant and equipment. b Average per responding farm. c Rate of return to farm capital at 1 July. pABARES preliminary estimates. yABARES provisional estimates. na Not available. RSE Relative standard errors, expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 3 Farm cash income of Victoria broadacre farms, by region, 2012–13to 2013–14, average per farm
Region / units / 2012–13p / RSE / 2013–14yMallee / $ / 126100 / (26) / 165000
Wimmera / $ / 157400 / (14) / 150000
Central North / $ / 93100 / (15) / 50000
Southern and Eastern Victoria / $ / 55000 / (26) / 59000
Note: pABARES preliminary estimates. yABARES provisional estimates. na Not available. Figures in parentheses are standard errors, expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Performance of grains industry farms—Victoria
In 2012–13, crop receipts increased for Victorian grains farms compared to those recorded in 2011–12, as higher crop prices offset reductions in crop production resulting from drier conditions through winter and spring. Farm cash income for Victorian grains industry farms averaged $171000a farm in 2012–13 (Figure 5).
Overall, in 2013–14, crop receipts for Victorian grains farms are projected to remain similar to those recorded in 2012–13, lower prices for canola, barley and some grain legumes mostly offsetting small increases in overall grain production.
Farm cash income for Victorian grains industry farms is projected to average $151000a farm in 2013–14, around 35per cent above the industry average for the previous 10years (Figure 5). However, farm cash incomes for Victorian grains industry farms were reduced by dry conditions throughout much of this period.
Figure 5 Real farm cash income, grains industry, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Performance of sheep industry farms—Victoria
Farm cash incomes were relatively high in historical terms for Victorian sheep industry farms in the period 2009–10to 2011–12 (Figure 6). However, in 2012–13, a reduction of 25per cent in average prices received for lambs, a larger reduction in the average price received for adult sheep and an 8per cent reduction in the average wool price received resulted in farm receipts for Victorian sheep farms falling by 23per cent. Despite a reduction in average cash costs resulting mainly from reduced expenditure on sheep purchases and interest payments, average farm cash income for sheep industry farms declined to an average of $53000per farm.
In 2013–14, higher adult sheep and lamb prices, together with a small increase in wool prices are projected to result in an increase in farm cash receipts. Average farm cash income for sheep industry farms is projected to increase to average $68000per farm, around 12per cent above the industry average of $61000per farm for the ten-years to 2012–13.
Figure 6 Real farm cash income, sheep industry, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Performance of beef industry farms—Victoria
A much smaller average herd size for Victorian beef industry farms, compared with the Australian average, results in average farm cash income for Victorian beef industry farms typically being well below the national average (Figure 7).
In 2012–13, a reduction of 15per cent in the average price received for beef cattle sold reduced farm cash receipts and despite a further reduction in expenditure on beef cattle purchases average farm cash income for Victorian beef industry farms declined to average $18000per farm in 2012–13 (Figure 7).
In 2013–14, a further reduction in the average price received for beef cattle sold is projected to result in average farm cash income for Victorian beef industry farms declining further to average $11000per farm in 2013–14, less than half the industry average of $36000per farm for the ten-years to 2012–13(Figure 7).
Figure 7 Real farm cash income, beef industry, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Performance of dairy industry farms— Victoria
In 2012–13, a reduction in farmgate milk prices averaging 7per cent and a reduction of 3per cent in average milk production in Victoria, together with an increase in average cash costs of 11per cent driven mainly by a rise in expenditure on fodder and interest payments, resulted in farm cash incomes for Victorian dairy farms declining from $141790in 2011–12to just $31500in 2012–13. An estimated 38per cent of Victorian dairy farms recorded negative farm cash incomes and farm business profit declined to an average loss of $40100per farm (Table 4).
In 2013–14average farm cash incomes are projected to rebound strongly with an increase in farmgate milk prices of around 20per cent. Despite a projected reduction in milk production and an increase in total cash costs, resulting mainly from higher fodder expenditure, farm cash income for Victorian dairy farms is projected to increase to an average of $127000per farm. If achieved, this would be around 39per cent above the average for the ten-years to 2012–13, in real terms. However, average farm cash income for Victorian dairy farms was low in many years during this period due to drought and reduced availability of irrigation water (Figure 8).