Agriculture, Fisheries and Forestry in the Launceston and North East Region of Tasmania, 2015

Agriculture, Fisheries and Forestry in the Launceston and North East region of Tasmania, 2015 ABARES

Agriculture, Fisheries and Forestry in the Launceston and North East region of Tasmania, 2015

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

About my region 15.44

March2015

Agriculture, Fisheries and Forestry in the Launceston and North East region of Tasmania, 2015 ABARES

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Cataloguing data

ABARES 2015, Agriculture, Fisheries and Forestry in the Launceston and North East region of Tasmania, 2015, About my region 15.44, Canberra, March. CC BY 3.0.

ISBN 978-1-74323-111-1
ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the Launceston and Northregion of Tasmania 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, 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, 2011–12to 2013–14, average per farm

Table 3 Financial performance, Tasmania dairy industry, 2011–12to 2013–14, average per farm

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

Figures

Figure 1 Employment profile, Launceston and North East region, November 2014

Figure 2 Value of agricultural production, Launceston and North East region, Tasmania, 2012–13

Figure 3 Distribution of farms by estimated value of agricultural operations, Launceston and North West 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 Launceston and North East region of Tasmania

Map 2 Agricultural industries of the Launceston and North East region of Tasmania

Agriculture, Fisheries and Forestry in the Launceston and North East region of Tasmania, 2015 ABARES

1Regional overview

The Launceston and North East region of Tasmania is located in the north-east of the state and includes Flinders Island (Map 1). The region comprises the eight local government areas of Break O’Day, Dorset, Flinders, George Town, Launceston, Meander Valley, Northern Midlands and West Tamar, and the major regional towns of Launceston, Campbell Town and St Marys. The region covers a total area of around 20000square kilometres or 29per cent of Tasmania’s total area and is home to approximately 137600people (ABS 2011).

Agricultural land in the Launceston and North East region occupies 7550square kilometres, or 38per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 6830square kilometres, or 34per cent of the region. The most common land use by area is grazing modified pasture, which occupies 4900square kilometres or 25per cent of the Launceston and North East region.

Map 1Broad agricultural land use of the Launceston and North East region of Tasmania

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

Map 2 Agricultural industries of the Launceston and North East 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 66300people were employed in the Launceston and North East region. The Launceston and North East region accounts for 28per cent of total employment in Tasmania and 34per cent of allpeople employed in the Tasmanian agriculture, forestry and fishing sector.

Health care and social assistance was the largest employing sector with 8200people followed by retail trade with 7600people (Figure 1). Other important employment sectors in the region were education and training (6700people), manufacturing (5600people) and accommodation and food services (5300people). The agriculture, forestry and fishing sector employed 4600people, representing 7per cent of the region’s workforce.

Figure 1 Employment profile, Launceston and North East 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 Launceston and North East region was $446million, which was 38per 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 Launceston and North East region has a diverse and important agricultural sector. The most important commodity in the Launceston and North East region based on the gross value of agricultural production was milk (Figure 2). In 2012–13, milk contributed 22per cent ($99million) to the value of agricultural production in the region. Cattle and calves accounted for 17per cent ($75million);potatoes accounted for 11per cent ($51million); wool 9per cent ($40million), sheep and lambs 6per cent ($27million) and hay 4per cent ($20million).

In 2012–13, the Launceston and North East region accounted for around 94per cent of the total value of the state’s triticale, 84per cent of the total value of canola and 74per cent of the total value of hay.

Figure 2 Value of agricultural production, Launceston and North East 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 1453farms in the Launceston and North West region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 25per cent of all farm businesses in Tasmania.

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

Industry Classification / Launceston and North East region / Tasmania
no. / % / no. / %
Beef Cattle / 366 / 25 / 1090 / 28
Sheep / 219 / 15 / 555 / 14
Mixed livestock / 169 / 12 / 287 / 7
Dairy / 162 / 11 / 453 / 12
Vegetable / 93 / 6 / 317 / 8
Fruit and nuts / 75 / 5 / 268 / 7
Other Crop growing / 55 / 4 / 145 / 4
Other livestock / 27 / 2 / 74 / 2
Mixed grains and livestock / 20 / 1 / 25 / 1
Grain growing / 18 / 1 / 36 / 1
Other / 240 / 17 / 606 / 15
Total Agriculture / 1453 / 100 / 3935 / 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 cattlefarms (366farms) were the most common, accounting for 25per cent of all farms in the Launceston and North West region, and 34per cent of all mixed livestock 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 41per cent of farms in the Launceston and North West 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, 26per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 81per cent of the total value of agricultural operations in the region.

Figure 3 Distribution of farms by estimated value of agricultural operations, Launceston and North West 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 slightly to average $71000per farm in 2013–14 (Figure 4, Table 2), around 2per cent below the average farm cash income recorded for the 10years to 2012–13.

The projected increase for Tasmanian broadacre farm cash incomes is mainly due to lower interest payments and reductions in expenditure on purchases of beef cattle and sheep. Overall, receipts from wool and sheep are expected to remain similar to those in 2012–13. An increase in beef cattle receipts, mainly because of higher cattle turn-off, is projected to be offset by reduced crop receipts.

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

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

Table 2 Financial performance, Tasmania broadacre industries, 2011–12to 2013–14, average per farm

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 324300 / 293200 / (8) / 292000
Total cash costs / $ / 216990 / 230000 / (9) / 221000
Farm cash income / $ / 107320 / 63200 / (14) / 71000
Farms with negative farm cash income / % / 10 / 12 / (41) / 10
Farm business profit / $ / 66390 / 600 / (1873) / 0
Profit at full equity - excluding capital appreciation / $ / 90830 / 28500 / (35) / 25000
Farm capital at 1 July a / $ / 4932490 / 3860300 / (8) / na
Farm debt at 30 June b / $ / 332270 / 340500 / (17) / 330000
Equity ratio b / % / 93 / 91 / (1) / na
Rate of return - excluding capital appreciation c / % / 1.9 / 0.7 / (35) / 0.7
Off-farm income of owner manager and spouse b / $ / 33080 / 40800 / (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

Performance of sheep industry farms—Tasmania

In 2012–13a reduction in average prices received for adult sheep, lambs, and wool resulted in a decline 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 crop and pasture chemicals, repairs and maintenance, interest, and fertiliser. A combination of lower receipts and increased costs led to a decline in farm cash income for Tasmanian sheep industry farms to an average of $73000per farm (Figure 5).

In 2013–14, farm cash income for Tasmanian sheep industry farms is projected to decline slightly to average $72000per farm.

An increase in prices for adult sheep and lambs is projected to outweigh lower sheep and lamb turn-off leading to an increase in sheep and lamb receipts. Crop receipts are projected to decline on Tasmanian sheep industry farms due to the combination of a smaller area sown to crops and lower prices.

Figure 5 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—Tasmania

In 2012–13, beef cattle turnoff increased on Tasmanian beef industry farms. Lower average sale prices for beef cattle more than offset the increase in turnoff to result in average beef cattle receipts declining by around 8per cent. The decrease in farm receipts was combined with higher cash costs in 2012–13, due mainly to increased expenditure on fertiliser, repairs and maintenance, and fuel. Overall, average farm cash income for Tasmanian beef industry farms declined to an average of $49200per farm in 2012–13 (Figure 6).

In 2013–14, higher beef cattle turnoff in combination with a slight increase in average sale prices received, are projected to result in beef cattle receipts increasing by almost 5per cent. In addition, a small 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 slightly to average $69000per farm in 2013–14.

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

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

Performance of dairy industry farms— Tasmania

In 2012–13a reduction in farmgate milk prices and a reduction in milk production, together with increased cash costs driven mainly by increased expenditure on fodder, resulted in reduced farm cash incomes for dairy farms in all states. Nationally, average farm cash income declined from $143360in 2011–12to just $44200in 2012–13. An estimated 33percent of dairy farms recorded negative farm cash incomes in 2012–13. In Tasmania, average farm cash income declined from $164490in 2011–12to $35500in 2012–13 (Figure 7, Table 3) and 41perof Tasmanian dairy farms are estimated to have recorded negative farm cash incomes.

In 2013–14average farm cash incomes are projected to rebound strongly with large increases in milk prices for milk producers in Tasmania. Average farm cash income is projected to increase to $210000, almost double the average for the previous 10-years of $107000.

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

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

Table 3 Financial performance, Tasmania dairy industry, 2011–12to 2013–14, average per farm

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 909430 / 804600 / (7) / 1024000
Total cash costs / $ / 752100 / 769900 / (9) / 813000
Farm cash income / $ / 157340 / 34700 / (89) / 210000
Farms with negative farm cash income / % / 1 / 41 / (30) / 17
Farm business profit / $ / 103730 / –73500 / (41) / 124000
Profit at full equity - excluding capital appreciation / $ / 265450 / 65700 / (40) / 269000
Farm capital at 1 July a / $ / 4935730 / 5118200 / (11) / na
Farm debt at 30 June b / $ / 1737520 / 1635700 / (14) / 1671000
Equity ratio b / % / 65 / 68 / (5) / na
Rate of return - excluding capital appreciation c / % / 5.5 / 1.3 / (40) / 5.0
Off-farm income of owner manager and spouse b / $ / 6730 / 6300 / (37) / na

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.