Agriculture and Fisheries in the Newcastle and Lake Macquarie region of New South Wales, 2014 ABARES
Agriculture and Fisheries in the Newcastle and Lake Macquarie region of New South Wales, 2014
Research by the Australian Bureau of Agricultural
and Resource Economics and Sciences
About my region 14.11
July2014
Agriculture and Fisheries in the Newcastle and Lake Macquarie region of New South Wales, 2014 ABARES
© Commonwealth of Australia 2014
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Cataloguing data
ABARES 2014, Agriculture, and Fisheries in the Newcastle and Lake Macquarie region of New South Wales 2014, About my region 14.11, Canberra, July.
ISSN TBA
ISBN 978-1-74323-118-0
ABARES project 43009
Internet
Agriculture and Fisheries in the Newcastle and Lake Macquarie region of New South Wales 2014 is available at daff.gov.au/abares/publications.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)
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The Australian Government acting through the Department of Agriculture, Fisheries and Forestry represented by the Australian Bureau of Agricultural and Resource Economics and Sciences, has exercised due care and skill in the preparation and compilation of the information and data in this publication. Notwithstanding, the Department of Agriculture, Fisheries and Forestry, ABARES, its employees and advisers disclaim all liability, including liability for negligence, for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying upon any of the information or data in this publication to the maximum extent permitted by law.
Acknowledgements
This regional profile was updated by Tim Caboche, Sonja Nikolova, Mary Stephan and Johnny Xu.
Contents
1Regional overview
Employment
2Agriculture sector
Value of agricultural production
Number and type of farms
Farm financial performance—New South Wales
3Fisheries sector
References
Tables
Table 1 Number of farms, by industry classification, 2011–12
Table 2 Financial performance, New South Wales broadacre industries, 2011–12 to 2013–14, average per farm
Table 3 Selected estimates, vegetable growers, New South Wales
Figures
Figure 1 Employment profile, Newcastle and Lake Macquarie region, August 2011
Figure 2 Value of agricultural production, Newcastle and Lake Macquarie region, New South Wales, 2011–12
Figure 3 Distribution of farms by estimated value of agricultural operations, Newcastle and Lake Macquarie region, New South Wales, 2011–12
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
Maps
Map 1 Newcastle and Lake Macquarie region of New South Wales
1
Agriculture and Fisheries in the Newcastle and Lake Macquarie region of New South Wales, 2014 ABARES
1Regional overview
The Newcastle and Lake Macquarie region of New South Wales is located in the urbanised coastal area around the city of Newcastle, north of Sydney (Map 1). The region includes the local government areas of Newcastle and Lake Macquarie, and small parts of the Port Stephens and Maitland local government areas to the north. The region covers a total area of around 900square kilometres or less than 1per cent of New South Wales and is home to approximately 342600 people (ABS 2011).
Agricultural land in the Newcastle and Lake Macquarie region occupies 270 square kilometres, or 30 per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 190 square kilometres, or 21 per cent of the region. The most common land use by area is urban intensive uses which occupy 200 square kilometres or 22 per cent of the Newcastle and Lake Macquarie region.
Map 1Newcastle and Lake Macquarie region of New South Wales
Employment
Australian Bureau of Statistics (ABS) census data from 2011 indicate that around 155700people were employed in the Newcastle and Lake Macquarie region. The Newcastle and Lake Macquarie region accounts for 5per cent of total employment in New South Wales and 1per cent of all people employed in the New South Wales agriculture, forestry and fishing sector.
Health care and social assistance was the largest employing sector in the region with 23588people (Figure 1), followed by retail trade with 17340people. Other important employment sectors in the region were manufacturing (15356 people), education and training (13861 people) and construction (12343 people).
The agriculture, forestry and fishing sector employed 460 people, representing less than 1 per cent of the region’s workforce. Of these, 70 per cent were employed in agriculture and 16per cent in support services for the agriculture, forestry and fishing sector. Fishing, hunting and trapping accounted for a further 6 per cent. In addition, an estimated 1935 people were employed in food product manufacturing and 541people were employed in wood, pulp and paper product manufacturing in the region (included in manufacturing sector employment).
Figure 1 Employment profile, Newcastle and Lake Macquarie region, August 2011
Source: Australian Bureau of Statistics
2Agriculture sector
Value of agricultural production
In 2011–12, the gross value of agricultural production (GVAP) in the Newcastle and Lake Macquarie region was $20million, which was less than 1 per cent of the total gross value of agricultural production in New South Wales ($10.8billion) for 2011–12. This is the most recent year for which data are available from the ABS on GVAP for this region.
Agricultural production in the Newcastle and Lake Macquarie region is dominated by egg and poultry production. In 2011–12, the Newcastle and Lake Macquarie region accounted for around 5 per cent of the total value of New South Wales egg production and 1 per cent of the state’s value of poultry.
The most important commodity in the Newcastle and Lake Macquarie region based on the gross value of agricultural production was egg production (Figure 2). In 2011–12, eggs contributed 49per cent (about $10million) to the value of agricultural production in the region. Poultry accounted for 29 per cent ($6 million), nurseries, flowers and turf16 per cent ($3million), and cattle and calves a further 5 per cent ($1 million).
Figure 2 Value of agricultural production, Newcastle and Lake Macquarie region, New South Wales, 2011–12
Source: Australian Bureau of Statistics
Number and type of farms
ABS data indicate that in 2011–12 there were 111 farms in the Newcastle and Lake Macquarie region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains less than 1per cent of all farm businesses in New South Wales.
Table 1 Number of farms, by industry classification, 2011–12
Industry Classification / Newcastle and Lake Macquarie region / New South Walesno. / % / no. / %
Other livestock / 29 / 27 / 2,223 / 5
Beef Cattle / 14 / 13 / 13,055 / 30
Fruit and nuts / 12 / 11 / 2,845 / 6
Poultry / 4 / 4 / 468 / 1
Vegetable / 2 / 2 / 1,179 / 3
Nurseries, Cut Flowers and Turf / 1 / 1 / 543 / 1
Other / 48 / 43 / 23,486 / 54
Total Agriculture / 111 / 100 / 43,798 / 100
Note: Where the estimated value of agricultural operations is more 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. Farms with other livestockthat is excluding beef cattle (29 farms) were the most common, accounting for 27 per cent of all farms in the Newcastle and Lake Macquarie region, and 1 per cent of all other livestock farms in New South Wales.
A large proportion of farms in the region are small in terms of their business size. Estimated value of agricultural operations (EVAO) is a measure of the value of production from farms and a measure of their business size, and is somewhat similar to turnover. Around 60 per cent of farms in the Newcastle and Lake Macquarie region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 7 per cent of the total value of agricultural operations in 2011–12. In comparison, 4 per cent of farms in the region had an EVAO of more than $350000 and accounted for an estimated 66 per cent of the total value of agricultural operations in the region in 2011–12.
Figure 3Distribution of farms by estimated value of agricultural operations, Newcastle and Lake Macquarie region, New South Wales, 2011–12
Source: Australian Bureau of Statistics
Farm financial performance—New South Wales
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 New South Wales.
Box 1Definitions
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—New South Wales
In 2013–14, increases in average farm cash income are expected for grains and sheep farms in southern regions of New South Wales, the Riverina and Central Western New South Wales as a result of increased grain production and higher sheep and lamb prices.
In the North West Slopes and Plains and Far West New South Wales and the Northern Tablelands of New South Wales, farm cash incomes are estimated to decline as drought conditions reduce crop production (Table 3). Incomes for beef and sheep farms are estimated to decline as a result of lower saleyard prices for cattle and despite an increase in the number of sheep, lambs and cattle expected to be sold. Expenditure on fodder purchases is estimated to increase. The proportion of farms recording negative farm cash incomes is estimated to exceed 30 per cent in all northern regions.
Overall, with increased incomes in the south and reduced incomes in the north, averagefarmcashincomefor New South Wales broadacre farms is estimated to decline only slightly in 2013–14, compared with 2012–13 (Table 2). Onaverage,farmcashincome for broadacrefarmsinNewSouthWalesis estimated toaverage$90 000 per farmin2013–14, still around 40 percentabovethe 10-year averageto2012–13 (Figure 4).
Farm business profits are estimated to decline to an average loss of $15 000 per farm in 2013–14 as sheep and beef cattle numbers and stocks of grain and fodder on-farm are reduced.
Figure 4 Real farm cash income, broadacre industries, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Table 2 Financial performance, New South Wales broadacre industries, 2011–12 to 2013–14, average per farm
Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14yTotal cash receipts / $ / 369 820 / 388 400 / (5) / 382 000
Total cash costs / $ / 291 120 / 290 800 / (5) / 292 000
Farm cash income / $ / 78 700 / 97 600 / (8) / 90 000
Farms with negative farm cash income / % / 31 / 23 / (14) / 35
Farm business profit / $ / - 2 370 / 6 700 / (118) / - 15 000
Profit at full equity excluding capital appreciation / $ / 35 490 / 41 200 / (21) / 18 000
Farm capital at 30 June a / $ / 3 563 410 / 3 548 200 / (4) / na
Farm debt at 30 June b / $ / 477 350 / 415 200 / (8) / 416 000
Equity ratio b / % / 86 / 88 / (1) / na
Rate of returnexcluding capital appreciation c / % / 1.0 / 1.2 / (19) / 0.5
Off-farm income of owner manager and spouse b / $ / 33 580 / 39 400 / (12) / 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. Figures in parentheses are standard errors, expressed as a percentage of the estimate provided.
Table 3 Farm cash income of New South Wales broadacre farms, by region, 2012–13 to 2013–14, average per farm
Region / units / 2012–13p / RSE / 2013–14yFar West New South Wales / $ / 153 000 / (17) / 86 000
North West Slopes and Plains / $ / 132 800 / (20) / 2 000
Central West / $ / 91 200 / (15) / 128 000
Riverina / $ / 159 700 / (13) / 185 000
Tablelands / $ / 42 400 / (23) / 52 000
Coastal New South Wales / $ / - 20 000 / (45) / - 2 000
Note: pABARES preliminary estimates. yABARES provisional estimates. na Not available. Figures in parentheses are standard errors, expressed as a percentage of the estimate provided.
Performance of grains industry farms—New South Wales
Average farm cash income for New South Wales grains industry farms increased in 2012–13 compared with 2011–12 (Figure 5). Higher crop prices more than offset reductions in crop production resulting from drier conditions through winter and spring in most regions and high temperatures in northern summer cropping regions mid-summer. On mixed enterprise farms, increased crop receipts and a small increase in beef cattle receipts resulting from increased cattle turnoff were partly offset by reduced receipts from sheep due to lower sheep, lamb and wool prices.
Figure 5 Real farm cash income, grains industry, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Overall, in 2013–14, crop receipts are estimated to decline for New South Wales grains farms as a result of much reduced production of both winter and summer crops in northern cropping regions subject to drought conditions and despite increased grain crop production in southern regions. On mixed enterprise farms, lower crop receipts are expected to be partly offset by increased receipts from sheep and lambs as a result of higher prices, together with an overall increase in beef cattle receipts as drier conditions result in turnoff of more beef cattle at significantly reduced prices.
Farm cash income for New South Wales grains industry farms is estimated to average $141000per farm in 2013–14, a reduction on the average farm cash income of $170000per farm for 2012–13, and above the industry average for the previous 10 years (Figure 5). Farm cash incomes for New South Wales grains industry farms were generally reduced by dry conditions throughout much of this decade.
Performance of sheep industry farms—New South Wales
In 2012–13, lower prices received for adult sheep, lambs and wool more than offset small increases in wool production and in sheep and lamb turnoff, together with reductions in expenditure on sheep purchases and interest payments. Adult sheep prices declined by 44 per cent; lamb prices by 17 per cent and the average wool price received by 11 per cent.
In 2013–14, higher average prices for adult sheep and lambs are estimated to be offset by increased expenditure on fodder to result in average farm cash income for sheep industry farms remaining similar to that recorded in 2012–13 at an average of $67000 per farm. This is around 20 per cent above the industry average of $56000 per farm for the ten-years to2012–13, in real terms (Figure 6).
Figure 6 Real farm cash income, sheep industry, average per farm
Note: p Preliminary estimate. y Provisional estimate.
Performance of beef industry farms—New South Wales
A smaller average herd size for New South Wales beef industry farms compared with the average for the whole of Australia results in average farm cash income for New South Wales beef industry farms typically being below the national average (Figure 7).
A return to drier seasonal conditions in 2012–13 resulted in an increase in beef cattle turnoff in all New South Wales regions of around 6 per cent and a slow-down in the rate of increase in herd sizes. Lower average sale prices received for beef cattle resulted in only a small increase in beef receipts (1 per cent) and average farm cash income for New South Wales beef industry farms increased to $31000 per farm in 2012–13.
In2013–14, expansion of drought conditions is estimated to have led to a further increase in cattle turn-off. It is estimated that this increase will be offset by reductions in saleyard prices for cattle, resulting in only a small increase in farm receipts that will be more than offset by increased expenditure on fodder, fuel and freight costs, resulting in average farm cash income for beef industry farms declining to $21 000 per farm, around 35 percent below the ten-year averageto2012–13 (Figure 7).
In addition, reduction of cattle numbers on farms is estimated to result in a further reduction in the value of on-farm inventories and a reduction in farm business profit for beef industry farms, representing an average loss of $50 000 per farm in 2013–14.
Figure 7 Real farm cash income, beef industry, average per farm