Agriculture, Fisheries and Forestry in the Greater Hobart Region of Tasmania, 2015

Agriculture, Fisheries and Forestry in the Greater Hobart region of Tasmania, 2015 ABARES

Agriculture, Fisheries and Forestry in the Greater Hobart region of Tasmania, 2015

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

About my region 15.43

April 2015

Agriculture, Fisheries and Forestry in the Greater Hobart region of Tasmania, 2015 ABARES

© Commonwealth of Australia 2015

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Cataloguing data

ABARES 2015, Agriculture, Fisheries and Forestry in the Greater Hobart region of Tasmania, 2015, About my region 15.43, Canberra, April. CC BY 3.0.

ISBN 978-1-74323-084-8
ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the Greater Hobart region of Tasmania 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 regional profile was updated by Therese Thompson, Peter Martin Haydn Valle, Timothy Connolly, Kasia Mazur, Lucy Randall and Sharan Singh.

Contents

1Regional overview

Employment

2Agriculture sector

Value of agricultural production

Number and type of farms

Farm financial performance—Tasmania

3Fisheries sector

4Forestry sector

References

Tables

Table 1 Number of farms, by industry classification, 2012–13

Table 2 Financial performance, Tasmania broadacre industries, 2012–13to 2014–15, average per farm

Table 3 Financial performance, Tasmania dairy industry, 2012–13to 2014–15, average per farm

Table 4 Physical and financial performance, vegetable growing farm businesses, Tasmania, 2012–13and 2013–14

Figures

Figure 1 Employment profile, Greater Hobart region, November 2014

Figure 2 Value of agricultural production, Greater Hobart region, Tasmania, 2012–13

Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Hobart region, Tasmania, 2012–13

Figure 4 Real farm cash income, broadacre industries, average per farm

Figure 5 Real farm cash income, sheep industry, average per farm

Figure 6 Real farm cash income, beef industry, averageper farm

Figure 7 Real farm cash income, dairy industry, average per farm

Figure 8 Real farm cash income, vegetable growing farm businesses, Tasmania, 2005–06to 2013–14

Figure 9 Area of native forest, by tenure

Maps

Map 1 Broad agricultural land use of the Hobart region of Tasmania

Map 2 Agricultural industries of the Hobart region of Tasmania

1

Agriculture, Fisheries and Forestry in the Greater Hobart region of Tasmania, 2015 ABARES

1Regional overview

The Greater Hobart region of Tasmania is located in the south of the state and includes the city of Hobart and the surrounding region (Map 1). The region includes the five local government areas of Brighton, Clarence, Glenorchy, Hobart, Sorell, parts of Derwent Valley and Kingborough, and the major regional towns of Dodges Ferry, Hobart, New Norfolk and Richmond. The region covers a total area of around 1700square kilometres or 2per cent of Tasmania’s total area and is home to approximately 211700people (ABS 2011).

Agricultural land in the Greater Hobart region occupies 740square kilometres, or 44per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 530square kilometres, or 31per cent of the region. The most common land use by area is grazing modified pasture,which occupies 500square kilometres or 29per cent of the Greater Hobart region.

Map 1Broad agricultural land use of the Hobart region of Tasmania

Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)

Map 2 Agricultural industries of the Hobart region of Tasmania

Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)

Employment

Australian Bureau of Statistics (ABS) data from the 2014Labour Force Survey indicate that around 103300people were employed in the Greater Hobart region. The region accounts for 44per cent of total employment in Tasmania and 21per cent of allpeople employed in the Tasmanian agriculture, forestry and fishing sector.

Health care and social assistance was the largest employment sector with 15200people followed by retail trade with 12700people (Figure 1). Other important employment sectors in the region were public administration and safety (10400people), education and training (8800people), accommodation and food services (8300people), and construction employing 8300people. The agriculture, forestry and fishing sector employed 2800people, representing 3per cent of the region’s workforce.

Figure 1 Employment profile, Greater Hobart 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 Hobart region was $46million, which was 4per cent of the total gross value of agricultural production in Tasmania ($1.2billion). This is the most recent year for which ABS data are available.

The Greater Hobart region has a relatively small agricultural sector. The most important commodity in the Greater Hobart region based on the gross value of agricultural production was vegetables (Figure 2). In 2012–13, vegetables contributed 20per cent ($9million) to the value of agricultural production in the region, with the major vegetable crops being lettuce and carrots ($2million each), and potatoes and tomatoes ($1million each).Nurseries, flowers and turf accounted for 9per cent ($4million),woolaccounted for 8per cent ($4million), and fruit and nuts (excluding grapes) accounted for 8per cent ($4million) of the region’s total value.

In 2012–13, the region accounted for around 77per cent of the total value of Tasmania’slettuce production.

Figure 2 Value of agricultural production, Greater Hobart region, Tasmania, 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 299farms in the Greater Hobart region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 8per cent of all farm businesses in Tasmania.

Table 1 Number of farms, by industry classification, 2012–13

Industry Classification / Hobart region / Tasmania
no. / % / no. / %
Sheep / 81 / 27 / 555 / 14
Fruit and nuts / 62 / 21 / 268 / 7
Beef Cattle / 36 / 12 / 1090 / 28
Mixed livestock / 19 / 6 / 287 / 7
Vegetable / 12 / 4 / 317 / 8
Other livestock / 11 / 4 / 74 / 2
Poultry / 9 / 3 / 33 / 1
Dairy / 8 / 3 / 453 / 12
Other Crop growing / 7 / 2 / 145 / 4
Nurseries, Cut Flowers and Turf / 4 / 1 / 45 / 1
Grain growing / 2 / 1 / 36 / 1
Other / 50 / 17 / 632 / 16
Total Agriculture / 299 / 100 / 3935 / 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. Sheepfarms (81farms) were the most common, accounting for 27per cent of all farms in the Greater Hobart region, and 15per cent of all sheep farms in Tasmania.

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 65per cent of farms in the Greater Hobart region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 7per cent of the total value of agricultural operations in 2012–13. In comparison, 8per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 72per cent of the total value of agricultural operations in the region.

Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Hobart region, Tasmania, 2012–13

Source: Australian Bureau of Statistics

Farm financial performance—Tasmania

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 agricultural 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 Tasmania.

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—Tasmania

Tasmanian broadacre farm cash incomes are projected to increase to average $104000afarm in 2014–15(Figure 4 andTable 2), as a result of higher beef cattle, lamb, wool and crop receipts. Receipts from crops are projected to increase by around 5percent, with the largest increase in receipts from oilseed poppies, vegetables and a range of other horticultural and vegetable crops. While receipts are expected to increase, average total cash costs are expected to decline resulting from reduced expenditure on fuel, interest payments and livestock purchases and despite increased expenditure on contracts and hired labour.

Figure 4 Real farm cash income, broadacre industries, average per farm

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

Table 2 Financial performance, Tasmania broadacre industries, 2012–13to 2014–15, average per farm

Performance indicator / units / 2012–13 / 2013–14p / RSE / 2014–15y
Total cash receipts / $ / 299490 / 321300 / (7) / 334000
Total cash costs / $ / 229720 / 249900 / (8) / 230000
Farm cash income / $ / 69770 / 71400 / (17) / 104000
Farms with negative farm cash income / % / 11 / 20 / (39) / 6
Farm business profit / $ / 670 / 10400 / (100) / 31000
Profit at full equity excluding capital appreciation / $ / 29040 / 40500 / (27) / 57000
Farm capital at 30 June a / $ / 3889340 / 3762500 / (35) / na
Farm debt at 30 June b / $ / 363950 / 425500 / (13) / 386000
Equity ratio bd / % / 91 / 89 / (1) / na
Rate of return excluding capital appreciatione / % / 0.8 / 1.1 / (26) / 1.6
Off-farm income of owner manager and spouse b / $ / 42160 / 32700 / (15) / na

aExcludes leased plant and equipment. bAverage per responding farm. cFarm capital minus farm debt. dEquity expressed as a percentage of farm capital. e Rate of return to farm capital at 1 July. p Preliminary estimates. y 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 sheep industry farms—Tasmania

In 2013–14an increase in average prices received for adult sheep, lambs, and wool outweighed lower sheep and lamb turn-off and resulted in an increase in average farm receipts for sheep industry farms is Tasmania.Despite reduced expenditure on livestock purchases, average farm cash costs increased due to higher expenditure on fertiliser, fuel, fodder, crop and pasture chemicals, and interest payments. Increased costs more than offset higher receipts and led to a decline in farm cash income for Tasmanian sheep industry farms to an average of $75600a farm (Figure 5).

In 2014–15, farm cash income for Tasmanian sheep industry farms is projected to increase to average $111000a farm, around 24percent above the 10-year average to 2013–14.

Sheep, lamb and wool receipts are projected to increase due to an increase in sheep and lamb prices combined with slightly higher turn-off and an increase in the quantity of wool sold. Average total cash costs are projected to decline as a result of reduced expenditure on livestock purchases, interest payments and fuel.

Figure 5 Real farm cash income, sheep industry, average per farm

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

Performance of beef industry farms—Tasmania

In 2013–14, lower turn-off more than offset a small increase in beef cattle prices resulting in average beef cattle receipts declining. Despite the decrease in beef cattle receipts, total cash receipts on Tasmanian beef industry farms increased slightly mainly as a result of higher crop receipts. The increase in farm receipts was combined with slightly lower cash costs in 2013–14, due to a decrease in expenditure on livestock purchases, repairs and maintenance, and fertiliser. Overall, average farm cash income for Tasmanian beef industry farms increasedslightly to average of $55800a farm in 2013–14 (Figure 6).

In 2014–15, higher beef cattle turn-off in combination with an increase in average sale prices received, are projected to result in beef cattle receipts increasing on Tasmanian beef industry farms. In addition, reduction in expenditure on purchases of beef cattle together with lower interest expenditure is projected to lead to a reduction in farm cash costs. Average farm cash income for beef industry farms are projected to increase to average $81000a farm in 2014–15, around 40percent above the 10-year average to 2013–14.

Figure 6Real farm cash income, beef industry, averageper farm

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

Performance of dairy industry farms— Tasmania

Average farm cash income was low for Tasmanian farms in 2012–13. In 2013–14, an increase in milk prices resulted inaverage farm cash incomes rebounded strongly in Tasmania. Average farm cash income increased from $44100in 2012–13to $238100in 2013–14 (Figure 7 andTable 3). Nationally, average farm cash income increased from $44130in 2012–13to $163900in 2013–14.

In 2014–15average farm cash incomes are projected to decline in most states including Tasmania as a result of lower milk prices and higher cash costs, particularly fodder costs. However, the reduction in farm cash income is expected to be much smaller in Tasmania, compared with other states, due to a much larger increase in milk production in Tasmania compared to the other states. Farm cash income in Tasmania is projected to average $202000afarm in 2014–15, around 60percent above the 10-year average to 2013–14.

When variations to projected farm cash incomes of dairy farms across Australia are taken into account, the overall average farm cash income of Australian dairy farms is projected to decline to average $97000afarm in 2014–15, around 14percent below the 10-year average to 2013–14.

Figure 7 Real farm cash income, dairy industry, average per farm

p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Dairy Industry Survey

Table 3 Financial performance, Tasmania dairy industry, 2012–13to 2014–15, average per farm

Performance indicator / units / 2012–13 / 2013–14p / RSE / 2014–15y
Farm cash income / $ / 44100 / 238100 / (10) / 202000
Farm business profit a / $ / –66840 / 123100 / (18) / 79000
Rate of return excluding capital appreciation b / % / 1.4 / 4.7 / (10) / 3.9

a Defined as farm cash income plus buildup in trading stocks, less depreciation and the imputed value of operator partner and family labour. b Defined as profit at full equity, excluding capital appreciation, as a percentage of total opening capital. Profit at full equity is defined as farm business profit plus rent, interest and lease payments less depreciation on leased items. p Preliminary estimates. y Provisional estimates. na Not available. Figures in parentheses are standard errors expressed as a percentage of the estimate provided.
Source: ABARES Australian Dairy Industry Survey

Performance of vegetable industry farms—Tasmania

Nationally in 2013–14, average farm cash income is estimated to have declined to $156000, 4per cent lower than in 2012–13. Average to above average seasonal conditions helped growers to maintain the high yields of2012–13. Overall vegetable production was also higher because the average area planted to vegetable crops increased. However, the resulting increase in vegetable cash receipts was partially offset by lower vegetable prices.

Vegetable production as a proportion of total state gross value of agricultural production is higher in Tasmania than any other state, accounting for 20per cent. Vegetable growing farm businesses in the state are also the most diverse, with only 51per cent of total farm receipts attributable to vegetables.

Despite vegetable cash receipts declining, estimated average farm cash income increased marginally in2012–13to $135400 (Table 4), 30per cent higher than the eight-year average (in real terms) to2012–13 (Figure 8). Yields were variable across vegetable commodities, decreasing for potatoes, but increasing for carrots and onions. The average area planted decreased for all vegetable commodities, decreasing most strongly for the main vegetable commodities. The effect on receipts of lower vegetable production was offset by an increase in vegetable prices.