Agriculture, Fisheries and Forestry in Northern Territory, 2014 ABARES

Agriculture, Fisheries and Forestry in Northern Territory, 2014 ABARES

Agriculture, Fisheries and Forestry in Northern Territory, 2014

Research by the Australian Bureau of Agricultural
and Resource Economics and Sciences

About my region 14.56

December 2014

Agriculture, Fisheries and Forestry in Northern Territory, 2014 ABARES

© Commonwealth of Australia 2014

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Cataloguing data

ABARES 2014, Agriculture, Fisheries and Forestry in Northern Territory 2014, About my region 14.56, Canberra, December. CC BY 3.0.

ISSNTBA
ISBN TBA
ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in Northern Territory 2014is 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 state profile was updated by Therese Thompson, Mary Stephan, andSharan Singh.

Contents

1Regional overview

Employment

2Agriculture sector

Value of agricultural production

Number and type of farms

Farm financial performance—Northern Territory

3Fisheries sector

4Forestry sector

References

Tables

Table 1 Number of farms, by industry classification, 2011–12

Table 2 Financial performance, Northern Territory beef industry, 2011–12to 2013–14

Table 3 Farm cash income of Northern Territory broadacre farms, by region, 2012–13to 2013–14

Figures

Figure 1 Employment profile, Northern Territory, August 2014

Figure 2 Value of agricultural production, Northern Territory, 2012–13

Figure 3 Distribution of farms by estimated value of agricultural operations, Northern Territory, 2011–12

Figure 4 Real farm cash income, beef industry

Figure 5 Farm cash income Northern Territory beef industry farms with greater than 10000head of cattle

Figure 6 Farm cash income Northern Territory beef industry farms with less than 10000head of cattle

Figure 7 Area of native forest, by tenure

1Regional overview

The Northern Territory covers a total area of around 1347000square kilometres and is home to approximately 211940people (ABS 2011). Agricultural land in the Northern Territory occupies 671700square kilometres, or around 50per cent of the state. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy660100square kilometres, or 49per cent of the state. The most common land use by area is grazing natural vegetation, which occupies 670000square kilometres or 50per cent of the state.

Employment

Australian Bureau of Statistics (ABS) from 2014indicate that around 132900people were employed in the Northern Territory. The Northern Territory accounts for 1per cent of total employment in Australia and less than1per cent of all people employed in the Australian agriculture, forestry and fishing sector.

Public administration and safety was the largest employment sector with 22700people followed by health care and social assistance with 15900people (Figure 1). Other important employment sectors in the state were construction (14900people), education and training(11700people) and retail trade (10000people). The agriculture, forestry and fishing sector employed 1500people, representing 1per cent of the state’s workforce.

Figure 1 Employment profile, Northern Territory, August 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 2012–13the gross value of agricultural production (GVAP) in the Northern Territory was $479million, which was 1per cent of the total gross value of agricultural production in Australia ($48billion).

The most important commodity in the Northern Territory based on the gross value of agricultural production was cattle and calves (Figure 2). In 2012–13, cattle and calves contributed 67per cent ($320million) to the value of agricultural production in the territory. Melons($49million) and mangoes ($48million) each accounted for 10per centof the value of agricultural production in the territory.

Figure 2 Value of agricultural production, Northern Territory, 2012–13

Source: Australian Bureau of Statistics, cat. no. 7503.0, Value of agricultural commodities produced, Australia

Number and type of farms

In 2012–13there were 463farms in the Northern Territory with an estimated value of agricultural operations of more than $5000 (Table 1). The state accounts for less than 1per cent of all farm businesses in Australia.

Farms are classified in Table 1 according to the activities that generate most of their value of production. Beef cattle (176farms) was the most common, accounting for 38per cent of all farms in the Northern Territory.

Table 1 Number of farms, by industry classification, 2011–12

Industry Classification / Northern Territory / Australia
no. / % / no. / %
Beef Cattle / 176 / 38 / 39 380 / 31
Fruit and nuts / 127 / 27 / 10 136 / 8
Vegetable / 44 / 9 / 3 980 / 3
Other Crop growing / 14 / 3 / 1 519 / 1
Other livestock / 11 / 2 / 4 123 / 3
Nurseries, Cut Flowers and Turf / 11 / 2 / 1 558 / 1
Other / 76 / 16 / 32 894 / 26
Total Agriculture / 463 / 100 / 128 682 / 100

Note: Estimated value of agricultural operations greater than $5000.
Source: Australian Bureau of Statistics

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 24per cent of farms in Northern Territory had an EVAO of less than $50000 (Figure 3). These farms accounted for only 1per cent of the total value of agricultural operations in 2012–13. In comparison, 41per cent of farms in the state had an EVAO of more than $350000and accounted for an estimated 92per cent of the total value of agricultural operations in the territory.

Figure 3 Distribution of farms by estimated value of agricultural operations, Northern Territory, 2012–13

Source: Australian Bureau of Statistics

Farm financial performance—Northern Territory

Each year, ABARES interviews Australian broadacre 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 provides 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 agricultural and grazing industries survey (AAGIS) to provide estimates of financial performance of Northern Territory beef industry farm businesses (Box 1).

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
• Beef: farms mainly engaged in running beef cattle.

Performance of beef industry farms— Northern Territory

Many farm businesses in the upper Northern Territory derive most of their total cash receipts from selling cattle for live export to Indonesia. Reliance is highest in the Top End–Gulf of Carpentaria and Victoria River–Katherine regions and is also relatively high in the Barkly–Tennant Creek region.

Turn-off of cattle for live export declined between 2010–11and 2012–13, with a reduction in both the number of farms selling cattle for live export and the average number of cattle sold for live export per farm. The effect on farm cash receipts of the reduction in turn-off for live export was partially offset by the sale of other cattle. Initially, the average price received for other cattle (cattle sold for slaughter in Australia) rose in 2011–12as excellent seasonal conditions resulted in increased sale weights. Wet seasonal conditions in 2010–11and 2011–12together with the slowdown in live cattle exports resulted in reduced turnoff and an increase in beef cattle numbers across northern Australia. The increase in cattle numbers halted abruptly in 2012–13as failure of the northern wet season resulted in dry conditions, increased cattle turnoff and lower beef cattle prices.

Average total cash receipts declined by 20per cent in 2012–13compared with 2011–12, mainly as a result of lower average sale prices for cattle. However, reductions in purchases of beef cattle and transfer of beef cattle to properties by corporate operators resulted in a small reduction in average total cash costs and average farm cash income increased slightly from an average of $253730per farm in 2011–12to $267300in 2012–13 (Table 2).

In 2013–14drier seasonal conditions, particularly in the Alice Springs District, and an increase in live cattle exports led to increased cattle turn-off.Higher beef cattle turnoff is projected to lead to a small increase in total farm cash receipts despite low prices for cattle, higher farm cash income and business profit for Northern Territory beef industry farms. Farm cash income is projected to increase to average $403000per farm (Table 2 and Figure 4). However, there is substantial variability across farm businesses depending on herd size and region with around 48per cent of Northern Territory beef farms projected to record negative farm cash income in 2013–14 (Table 2).

Figure 4 Real farm cash income, beef industry

average per farm

Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

The average financial performance of beef industry farms in the Northern Territory is heavily influenced by the performance of very large herd size, mostly corporate farms. These farms are found in all Northern Territory Regions, but predominantly in the Barkly and Victoria River-Katherine districts. These businesses dominate cattle turn-off and financial performance estimates for the Northern Territory and typically have financial performance that is well above the average for other smaller herd size businesses in the region as well as performance that is very variable from year to year.

Farm cash income for businesses with greater than 10000head of cattle averaged $1.6million over the 10years ending 2012–13with substantial variability between years (Figure 5).

Figure 5 Farm cash income Northern Territory beef industry farms with greater than 10000head of cattle

average per farm

Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

In contrast, farm cash income for businesses with less than 10000head of beef cattle averaged just $52000per farm over the same period and has generally trended downwards since 2004–05 (Figure 6).

Figure 6 Farm cash income Northern Territory beef industry farms with less than 10000head of cattle

average per farm

Note: p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 2 Financial performance, Northern Territory beef industry, 2011–12to 2013–14

average per farm

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 1937910 / 1572300 / (13) / 1796000
Total cash costs / $ / 1684180 / 1305000 / (12) / 1392000
Farm cash income / $ / 253730 / 267300 / (34) / 403000
Farms with negative farm cash income / % / 54 / 66 / (15) / 48
Farm business profit / $ / 322860 / 502200 / (25) / 543000
Profit at full equity - excluding capital appreciation / $ / 446620 / 577900 / (22) / 617000
Farm capital at 1 July a / $ / 19373600 / 16382300 / (13) / na
Farm debt at 30 June b / $ / 1725590 / 1233900 / (30) / 1186000
Equity ratio b / % / 80 / 84 / (4) / na
Rate of return - excluding capital appreciation c / % / 2.2 / 3.5 / (13) / 3.8
Off-farm income of owner manager and spouse b / $ / 46050 / 47400 / (39) / 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

The average farm cash income of beef industry farms in 2012–13and 2013–14varies across regions, partly as a consequence of the differences in average herd size within the regions. Farm cash income in the Barkly region (Map 2) where large herd size farms predominate is estimated to have averaged $2.2million in 2012–13and is projected to remain relatively similar in 2013–14 (Table 3). In the Victoria River District-Katherine and Top End Darwin and the Gulf, regions more reliant on live cattle exports, farm cash income is projected to increase in 2013–14. In the Alice Springs District a slight increase is projected in average farm cash income, with higher farm receipts resulting from forced sales of cattle due to dry seasonal conditions.

Table 3 Farm cash income of Northern Territory broadacre farms, by region, 2012–13to 2013–14

average per farm

Region / units / 2012–13p / RSE / 2013–14y
711: Alice Springs District / $ / 69400 / (232) / 73000
712: Barkly Tablelands / $ / 2225800 / (23) / 2173000
713: Victoria River District - Katherine / $ / - 135400 / (47) / 103000
714: Top End Darwin and the Gulf / $ / - 24700 / (544) / 170000

Note: 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

Map 2 Australian broadacre zones and regions

3Fisheries sector

In 2011–12the gross value of the Northern Territory’s fisheries production (both aquaculture and wild-catch) was $51million, a decrease of 14per cent ($8million) from 2010–11. The Northern Territory contributed 2per cent of the total value of Australian fisheries production in 2011–12. In value terms, the wild-catch sector accounted for 66per cent ($34million) of the territory’s total production and the aquaculture sector accounted for the remaining 34per cent ($17million).

The Northern Territory’s wild-catch fisheries sector provide a range of fisheries products with the highest contribution being from crabs (primarily mud crabs), which account for 24per cent of the total value of wild-catch fisheries with a value of $8million. Other important wild-catch fisheries products are sea perch (16per cent; $5million), gold band snapper (15per cent; $5million), barramundi (13per cent; $4.5million) and mackerel (11per cent; $3.7million). Over the last decade the value of the Northern Territory’s wild-catch fisheries products has decreased from $46.5million (2000–01) to $25.7million (2011–12; in 2011–12terms). The products for which the real value of production declined most over the past decade are crabs and barramundi, falling by $6million and $3million respectively between 2000–01and 2011–12.

In 2011–12the value of the Northern Territory’s aquaculture production is estimated to have decreased by 36per cent from $27million in 2010–11to $17million in 2011–12. Aquaculture pearls are the most valuable aquaculture product produced in the region, valued at $9million and 53per cent of the total regional gross value of fisheries production from aquaculture. In 2011–12, the value of Northern Territory aquaculture pearls declined by 56per cent ($12million). Pearls are produced predominantly for the export market, with most pearls being exported to Hong Kong. In 2011–12, over $7million worth of the barramundi aquaculture was produced in the Northern Territory.

The Commonwealth Northern Prawn Fishery was the most valuable fishery in the Northern Territory region, with a gross value of production in 2011–12of $65million, across the entire fishery. In 2011–12, the gross value of production for the Northern Prawn Fishery decreased by 32per cent due to a 47per cent decrease in catches of tiger prawns, and 36per cent decrease in catches of banana prawns. Darwin is a major landing site for the Northern Prawn Fishery.

In 2011–12, the Northern Territory’s seafood product exports were valued at around $0.1million. The main export products include live and fresh, chilled or frozen fish, and crabs with Hong Kong and Japan being the main export markets. The main non-edible fisheries product produced for the export market in the Northern Territory is pearls.

It is estimated that Northern Territory residents and visitors spend nearly $51million annually on recreational fishing, with the purchase of vessels and vehicles and their associated running costs making up the bulk of the expenditure (West et. al. 2012). According to the most recent survey of recreational fishing activity in the Northern Territory (West et. al. 2012), the main target fish species are barramundi, followed by golden snapper, small bait fish, catfish, saddletail and crimson snapper, and mullet. Mud crabs dominates the crustacean catch, followed by cherabin, the giant freshwater prawn.

4Forestry sector

In 2010–11, the total plantation area in the Northern Territory was approximately 15900hectares, comprised of approximately 800hectares of hardwood plantations and 15100hectares of other plantations. The main hardwood species planted is mangium (Acacia mangium) and African mahogany (Khayasenegalensis). Plantations in the Northern Territory NPI region are predominantly located on Melville Island and some northern parts of the mainland.

In 2011, there were approximately 15million hectares of native forests in the Northern Territory, comprised mainly of Eucalypt medium woodland (5.8million hectares), Eucalypt medium open (5million hectares), Acacia (957500hectares), Melaleuca (891500hectares), Eucalypt low woodland (855300hectares), Eucalypt low open (472700hectares), Mangrove (305600hectares) and Rainforest (251000hectares) forest types. The majority of the native forests are privately managed (9.6million hectares) or leased (5.2million hectares) (Figure 7). There are no major timber processing industries in the Northern Territory region.