Agriculture, Fisheries and Forestry in Western Australia, 2014 ABARES

Agriculture, Fisheries and Forestry in Western Australia, 2014

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

About my region 14.52

July 2014

Agriculture, Fisheries and Forestry in Western Australia, 2014 ABARES

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This publication (and any material sourced from it) should be attributed as: ABARES 2014, Agriculture, Fisheries and Forestry in Western Australia 2014, About my region 14.52, Canberra, July. CC BY 3.0.

Cataloguing data

ABARES 2014, Agriculture, Fisheries and Forestry in Western Australia 2014, About my region 14.52, Canberra, July.

ISSN TBA

ISBN 978-1-74323-106-7

ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in Western Australia 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 state profile was updated by Tim Caboche, Sonja Nikolova, Johnny Xu, Mary Stephan, Sharan Singh, Therese Thompson, Peter Martin and Owen McCarthy.

Contents

1Regional overview

Employment

2Agriculture sector

Value of agricultural production

Number and type of farms

Farm financial performance—Western Australia

3Fisheries sector

4Forestry sector

References

Tables

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

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

Table 3 Farm cash income of Western Australia broadacre farms, by region, 2012–13 to 2013–14, average per farm

Table 4 Financial performance, Western Australia dairy industry, 2011–12 to 2013–14, average per farm

Table 5 Selected estimates, vegetable growers, Western Australia

Figures

Figure 1 Employment profile, Western Australia, August 2011

Figure 2 Value of agricultural production, Western Australia, 2011–12

Figure 3 Distribution of farms by estimated value of agricultural operations, Western Australia, 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, beef industry, average per farm

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

Figure 8 Area of native forest, by tenure

1Regional overview

Western Australia covers a total area of around 2 526 600 square kilometres and is home to approximately 2 239 200people (ABS 2011). Agricultural land in Western Australia occupies 1090 620square kilometres, or around 43per cent of the state. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy1369360square kilometres, or 54per cent of the state. The most common land use by area is minimal use which occupies 934 390 square kilometres or 37 per cent of the state.

Employment

Australian Bureau of Statistics (ABS) census data from 2011 indicate that around 1097900people were employed in Western Australia. Western Australia accounts for 11per cent of total employment in Australia and 11 per cent of all people employed in the Australian agriculture, forestry and fishing sector.

Health care and social assistance was the largest employing sector with 113 800 people followed by construction with 111 800people (Figure 1). Other important employment sectors in the state were retail trade (110 700 people), manufacturing (90 400 people) and education and training (88 100people).

The agriculture, forestry and fishing sector employed 26 400 people, representing 2 per cent of the state’s workforce. Of these, 87 per cent were employed in agriculture, 6per cent in support services for the agriculture, forestry and fishing sector and 3per cent in fishing, hunting and trapping. In addition, an estimated 10 500 people were employed in food product manufacturing and 4 500people were employed in wood, pulp and paper product manufacturing in the state (included in manufacturing sector employment).

Figure 1 Employment profile, Western Australia, August 2011

Source: Australian Bureau of Statistics

2Agriculture sector

Value of agricultural production

In 2011–12 the gross value of agricultural production (GVAP) in Western Australia was $7.5billion, which was 16 per cent of the total gross value of agricultural production in Australia ($46.7billion) for 2011–12.

The most important commodity in Western Australia based on the gross value of agricultural production was wheat (Figure 2). In 2011–12, wheat contributed 38 per cent (around $2.8billion) to the value of agricultural production in the state. Barley ($691 million) and oilseeds ($670 million) each contributed around9per cent, while wool ($549 million) and cattle and calves ($523 million) each contributed around 7per cent.

Figure 2 Value of agricultural production, Western Australia, 2011–12

Source: Australian Bureau of Statistics

Number and type of farms

In 2011–12 there were 12 450farms in Western Australia with an estimated value of agricultural operations of more than $5000 (Table 1). The state accounts for 9per 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. Grain growing (2 653 farms) was the most common, accounting for 21 per cent of all farms in Western Australia.

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

Industry Classification / Western Australia region / Australia
no. / % / no. / %
Grain growing / 2,653 / 21 / 13,649 / 10
Beef Cattle / 2,260 / 18 / 38,610 / 29
Mixed grains and livestock / 2,052 / 16 / 11,501 / 9
Sheep / 1,215 / 10 / 11,867 / 9
Fruit and nuts / 1,056 / 8 / 10,910 / 8
Other livestock / 550 / 4 / 5,982 / 4
Vegetable / 510 / 4 / 4,469 / 3
Mixed livestock / 277 / 2 / 6,511 / 5
Dairy / 247 / 2 / 8,157 / 6
Nurseries, Cut Flowers and Turf / 165 / 1 / 1,745 / 1
Other Crop growing / 137 / 1 / 1,897 / 1
Other / 1,328 / 11 / 19,942 / 15
Total Agriculture / 12,449 / 100 / 135,239 / 100

Note: Where the estimated value of agricultural operations is more than $5000.
Source: Australian Bureau of Statistics

A significant proportion of farms in the state 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 30per cent of farms in Western Australia had an EVAO of less than $50000 (Figure 3). These farms accounted for only 1per cent of the total value of agricultural operations in 2011–12. In comparison, 32per cent of farms in the state had an EVAO of more than $500000 and accounted for an estimated 85per cent of the total value of agricultural operations in the state in 2011–12.

Figure 3 Distribution of farms by estimated value of agricultural operations, Western Australia, 2011–12

Source: Australian Bureau of Statistics

Farm financial performance—Western Australia

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 Western Australia.

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—Western Australia

Record winter grain production in Western Australia and strong grain prices are estimated to result in a large increase in average farm cash income in the Central and Southern Wheatbelt. More modest increases are expected in the Northern and Eastern Wheatbelt. An increase in crop receipts was augmented by increased receipts from sheep and lambs as prices increased.

In the northern pastoral regions of the Kimberley and Pilbara, increased sales of beef cattle for live export are estimated to increase farm receipts and raise average farm cash income (Table 3). An increase in beef cattle numbers is estimated to result in an even larger improvement in average business profits.

Overall, Western Australian broadacre farm cash incomes are estimated to increase to average $317000 per farm in 2013–14—around double the 10 year average to 2012–13(Table 2). This is the highest average farm cash income recorded for Western Australian broadacre farms in the 37years the AAGIS has operated (Figure 4).

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

Note: p Preliminary estimate. y Provisional estimate.

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

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 742 230 / 755 100 / (8) / 974 000
Total cash costs / $ / 554 460 / 578 600 / (6) / 657 000
Farm cash income / $ / 187 770 / 176 600 / (16) / 317 000
Farms with negative farm cash income / % / 22 / 23 / (19) / 22
Farm business profit / $ / 101 190 / 41 400 / (67) / 177 000
Profit at full equity - excluding capital appreciation / $ / 184 250 / 128 700 / (24) / 265 000
Farm capital at 1 July a / $ / 5 540 650 / 5 381 100 / (7) / na
Farm debt at 30 June b / $ / 975 280 / 1 088 300 / (9) / 1 035 000
Equity ratio b / % / 82 / 80 / (2) / na
Rate of return - excluding capital appreciation c / % / 3.3 / 2.4 / (22) / 4.7
Off-farm income of owner manager and spouse b / $ / 26 910 / 27 200 / (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.

Table 3 Farm cash income of Western Australia broadacre farms, by region, 2012–13 to 2013–14, average per farm

Region / units / 2012–13p / RSE / 2013–14y
Kimberly / $ / - 141 800 / (184) / 664 000
Pilbara and Southern Rangelands / $ / 101 400 / (184) / 234 009
Central and South Wheat Belt / $ / 225 100 / (20) / 442 000
North and East Wheat Belt / $ / 189 200 / (33) / 221 000
South West / $ / 49 800 / (29) / 61 000

Note: pABARES preliminary estimates. yABARES provisional estimates. na Not available. RSE Relative standard errors, expressed as a percentage of the estimate provided.

Performance of grains industry farms—Western Australia

In 2012–13, average total cash receipts for Western Australian grains industry farms increased slightly compared with 2011–12. Higher crop prices more than offset reductions in crop production resulting from drier seasonal conditions. On mixed enterprise farms, increased crop receipts were partly offset by a reduction in sheep and beef cattle receipts. Total cash costs also increased in 2012–13 due to higher expenditure on crop chemicals, interest payments, fertiliser, and fuel. Average farm cash income for grains industry farms in Western Australia increased to $291500 per farm in 2012–13 (Figure 5).

Western Australia had a favourable finish to the 2013–14 winter cropping season, especially in the central and southern regions of the grains belt. Total winter crop production in Western Australia is estimated to have risen by 55percent in 2013–14 to a record high with yields estimated to be well above average. On mixed enterprise farms, the large increase in crop receipts was combined with smaller increases in lamb, sheep and wool receipts resulting in estimated total cash receipts increasing by around 34 per cent in 2013–14. Total cash costs are also estimated to increase in 2013–14 due to higher expenditure on fertiliser,crop chemicals, fuel and costs associated with harvesting a larger crop than in 2012–13. A large increase is also expected in repairs and maintenance as producers make use of higher cash flow. Farm cash income for Western Australian grains industry farms is estimated to increase to the historical high of around $430000 per farm in 2013–14, over double the industry average for the previous 10 years (Figure 5).

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

Note: p Preliminary estimate. y Provisional estimate.

Performance of beef industry farms—Western Australia

In 2012–13, cattle turnoff was reduced on Western Australian beef industry farms. Lower turnoff combined with a reduction in the average price received for beef cattle sold reduced farm cash receipts. Despite a reduction in receipts, farm cash costs increased mainly due to increased expenditure on fodder due to drier seasonal conditions. Average farm cash income for Western Australian beef industry farms decreased to an average of $49750 per farm in 2012–13 (Figure 6).

In 2013–14, beef cattle turnoff is expected to increase. Overall, average total cash receipts are estimated to increase in 2013–14, despite a reduction in average sale prices for cattle. In addition, total cash costs are estimated to increase slightly with increased expenditure on repairs and maintenance, fuel and fodder. Farm cash income for Western Australian beef industry farms are estimated to increase to average $107000 per farm in 2013–14.

Figure 6 Real farm cash income, beef industry, average per farm

Note: p Preliminary estimate. y Provisional estimate.

Performance of dairy industry farms— Western Australia

In 2012–13 a reduction in farmgate milk prices (averaging 7percent nationally) and a reduction in milk production, together with increased cash costs (averaging 12percent nationally) driven mainly by increased expenditure on fodder, resulted in reduced farm cash incomes for dairy farms in Australia. Nationally, average farm cash income declined from $143360 in 2011–12 to just $44 200 in 2012–13. In Western Australia, a small increase in milk prices and production resulted in an improvement in average farm cash income in 2012–13 to $133400 (Table 4 and Figure 7).

In 2013–14 average farm cash incomes are estimated to increase slightly with a small increase in milk prices partially offsetting a decrease in milk production and a larger decrease in average for farm cash costs.

When variations to estimated farm cash incomes for dairy farms across Australia are taken into account, the overall average farm cash income for Australian dairy farms is estimated to increase to $129 000 per farm in 2013–14, around 29percent above the 10-year average to 2012–13. For Western Australian dairy farms, average farm cash income is estimated to increase to $138000, around 15percent above the 10 year average to 2012–13.

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

Note: p Preliminary estimate. y Provisional estimate.

Table 4 Financial performance, Western Australia dairy industry, 2011–12 to 2013–14, average per farm

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 899 120 / 1 002 700 / (8) / 999 000
Total cash costs / $ / 787 600 / 869 300 / (9) / 860 000
Farm cash income / $ / 111 520 / 133 400 / (22) / 138 000
Farms with negative farm cash income / % / 7 / 6 / (49) / 21
Farm business profit / $ / 24 120 / 75 700 / (36) / 22 000
Profit at full equity - excluding capital appreciation / $ / 112 020 / 175 600 / (16) / 114 000
Farm capital at 1 July a / $ / 9 325 180 / 11 255 100 / (14) / na
Farm debt at 30 June b / $ / 987 370 / 1 106 100 / (19) / 1 008 000
Equity ratio b / % / 90 / 90 / (2) / na
Rate of return - excluding capital appreciation c / % / 1.2 / 1.8 / (22) / 1.1
Off-farm income of owner manager and spouse b / $ / 8 250 / 7 300 / (20) / na

Performance of vegetable industry farms— Western Australia

Western Australian vegetable growing farms are located along the coast extending north and south of Perth, around Carnarvon along the Gascoygne River and in the far north of the state in the Ord River irrigation area. In 2011–12, the average area operated by a vegetable growing farm in Western Australia was 208 hectares, of which 24 hectares were planted to vegetables, with around 75 per cent of vegetable growing farms planting less than 13 hectares to vegetables. The majority of farms grew only one vegetable type (61percent of vegetable growing farms) in 2011–12 while only a small proportion grew five or more vegetable types (12percent). The most common vegetables grown were potatoes (171farms), cauliflowers (62farms), broccoli (51 farms) and pumpkins (42 farms).

Farm cash income increased in 2011–12 to $258300 per vegetable growing farm (Table 5).Total cash receipts averaged $1 139 800 per farm in 2011–12, 19 per cent lower than in 2010–11 due to a decline in vegetable receipts. Total cash costs decreased by 26 percent to average $881500 per farm in 2011–12.

The 2012–13 season was reported as being average to slightly above average for vegetable growing regions in southern Western Australia, but drier in the central and northern parts of the state compared to 2011–12. Across the state, the area planted to vegetables was than in 2011–12. Yields remained similar to 2011–12 but overall total cash receipts were reduced resulting in average farm cash income declining to $149 000 per farm.

Table 5 Selected estimates, vegetable growers, Western Australia

average per farm

Selected estimates / units / 2010–11 / 2011–12p / RSE / 2012–13y
Number of growers / no. / 305 / 397 / 397
Total cash receipts / $ / 1 414 560 / 1 139 800 / (11) / 1 017 000
Vegetable receipts / $ / 1 278 980 / 1 004 500 / (12) / 989 000
Total cash costs / $ / 1 189 670 / 881 500 / (11) / 868 000
Farm cash income / $ / 224 890 / 258 300 / (19) / 149 000
Rate of return a / % / 3.0 / 2.5 / (37) / 0.9
Total area operated June 30 / ha / 172 / 208 / (17) / na
Area sown to vegetables / ha / 33 / 24 / (16) / 24
Total vegetables sold / t / 1155 / 1030 / (24) / 967
Total area of vegetables irrigated / ha / 32 / 23 / (17) / na
Volume of irrigation water applied / ml / 198 / 150 / (22) / na

Note:a Excludes capital appreciations. p Preliminary estimate y Provisional estimate. naNot available.Figures in parentheses are standard errors expressed as a percentage of the estimate. Updated data for Vegetable farms will be available November 2014.
Source: ABARES Australian vegetable growing farms survey