Agriculture, Fisheries and Forestry in the South East Region of South Australia, 2014

Agriculture, Fisheries and Forestry in the South East region of South Australia, 2014 ABARES

Agriculture, Fisheries and Forestry in the South East region of South Australia, 2014

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

About my region 14.38

June2014

Agriculture, Fisheries and Forestry in the South East region of South Australia, 2014 ABARES

Ownership of intellectual property rights

Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to as the Commonwealth).

Creative Commons licence

All material in this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence, save for content supplied by third parties, logos and the Commonwealth Coat of Arms.

Creative Commons Attribution 3.0 Australia Licence is a standard form licence agreement that allows you to copy, distribute, transmit and adapt this publication provided you attribute the work. A summary of the licence terms is available from creativecommons.org/licenses/by/3.0/au/deed.en. The full licence terms are available from creativecommons.org/licenses/by/3.0/au/legalcode.

This publication (and any material sourced from it) should be attributed as: ABARES 2014, Agriculture, Fisheries and Forestry in the South East region of South Australia 2014, About my region 14.38, Canberra, March. CC BY 3.0.

Cataloguing data

ABARES 2014, Agriculture, Fisheries and Forestry in the South East region of South Australia 2014, About my region 14.38, Canberra, March.

ISSN TBA

ISBN 978-1-74323-105-0

ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the South East region of South Australia 2014 is available at daff.gov.au/abares/publications.

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Postal address GPO Box 1563 Canberra ACT 2601

Switchboard +61 2 6272 2010|

Facsimile +61 2 6272 2001

Web daff.gov.au/abares

Inquiries regarding the licence and any use of this document should be sent to: .

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 Sonja Nikolova, Johnny Xu, Mary Stephan and Sharan Singh.

Contents

1Regional overview

Employment

2Agriculture sector

Value of agricultural production

Number and type of farms

Farm financial performance—South Australia

3Fisheries sector

4Forestry sector

References

Tables

Table 1 Number of farms, by industry classification, South East region, South Australia, 2011–12

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

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

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

Table 5 Selected estimates, vegetable growers, South Australia

Figures

Figure 1 Employment profile, South East region, August 2011

Figure 2 Value of agricultural production, South East region, South Australia, 2011–12

Figure 3 Distribution of farms by estimated value of agricultural operations, South East region, South Australia, 2011–12

Figure 4 Area of native forest, by tenure

Maps

Map 1 South East region of South Australia

Agriculture, Fisheries and Forestry in the South East region of South Australia, 2014 ABARES

1Regional overview

The South East region of South Australia stretches from the area adjacent to the Victorian boarder to Kangaroo Island in the west (Map 1). The region comprises nineteen local government areas and the major regional towns of Keith, Mount Gambier, Murray Bridge, Naracoorte and Renmark. The region covers a total area of around 65500 square kilometres or 7per cent of South Australia’s total area and is home to approximately 177100 people (ABS 2011).

Agricultural land in the South East region occupies 48 480 square kilometres, or 74 per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 12 710 square kilometres, or 19 per cent of the region. The most common land use by area is grazing modified pasture which occupies 33 120 square kilometres or 51 per cent of the South East region.

Map 1South East region of South Australia

Employment

Australian Bureau of Statistics (ABS) census data from 2011 indicate that around 77600 people were employed in the South East region. The region accounts for 10per cent of total employment in South Australia and 43 per cent of all people employed in the South Australian agriculture, forestry and fishing sector.

Agriculture, forestry and fishing was the largest employing sector with 12519 people (Figure 1), representing 16 per cent of the region’s workforce. Retail trade was the second largest with 8857 people. Other important employment sectors in the region were health care and social assistance (8719people), manufacturing (8677 people), construction (5694 people), accommodation and food services (5323 people) and education and training (5054people).

Of those people working in the agriculture, forestry and fishing sector, 88 per cent were employed in agriculture, 5 per cent in support services for thesector, 3 per cent in forestry and logging and 2 per cent in fishing, hunting and trapping. In addition, an estimated 2577 people were employed in food product manufacturing and 1907 people were employed in wood, pulp and paper product manufacturing in the region (included in manufacturing sector employment).

Figure 1 Employment profile, South East 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 South East region was $2.6billion, which was 49 per cent of the total gross value of agricultural production in South Australia ($5.4billion) for 2011–12. This is the most recent year for which data are available from the ABS on GVAP for this region.

The South East region has a diverse and important agricultural sector. In 2011–12, the South East region accounted for almost100 per cent of the total value of South Australian citrus fruitproduction, 92 per cent of the total value of milk, 81 per cent of the total value of wine grapes and 73 per cent of the total value of cattle and calves.

The most important commodity in the South East region based on the gross value of agricultural production was vegetables for human consumption (Figure 2). In 2011–12, vegetables for human consumption contributed 16 per cent ($414million) to the value of agricultural production in the region with the major crops being potatoes ($246 million) and onions ($92 million). Sheep and lambs contributed 11per cent ($294million), wine grapes 11 per cent ($287 million), cattle and calves 10 per cent ($260 million), wool 9 per cent ($227million), milk 8 per cent ($215 million), and wheat accounted for 7 per cent ($187 million).

Figure 2 Value of agricultural production, South East region, South Australia, 2011–12

Source: Australian Bureau of Statistics

Number and type of farms

In 2011–12 there were 6470 farms in the South East region of South Australia with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 47per cent of all farm businesses in South Australia.

Table 1 Number of farms, by industry classification, South East region, South Australia, 2011–12

Industry Classification / South Australia - South East region / South Australia
no. / % / no. / %
Fruit and nuts / 1,313 / 20 / 2,594 / 19
Beef Cattle / 1,027 / 16 / 1,404 / 10
Sheep / 946 / 15 / 1,615 / 12
Mixed grains and livestock / 767 / 12 / 1,949 / 14
Grain growing / 566 / 9 / 2,660 / 19
Mixed livestock / 499 / 8 / 703 / 5
Dairy / 300 / 5 / 368 / 3
Other livestock / 152 / 2 / 473 / 3
Vegetable / 134 / 2 / 509 / 4
Other Crop growing / 91 / 1 / 117 / 1
Other / 674 / 10 / 1,419 / 10
Total Agriculture / 6,470 / 100 / 13,810 / 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. Fruit and nut (1313 farms) were the most common, accounting for 20 per cent of all farms in the South East region, and 51 per cent of all fruit and nut farms in South Australia.

A large proportion of farms in the region are small in terms of their business size. The 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 27 per cent of farms in the South East region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 2 per cent of the total value of agricultural operations in 2011–12. In comparison, 23 per cent of farms in the region had an EVAO of more than $350000 and accounted for an estimated 74per cent of the total value of agricultural operations in the region in 2011–12.

Figure 3 Distribution of farms by estimated value of agricultural operations, South East region, South Australia, 2011–12

Source: Australian Bureau of Statistics

Farm financial performance—South 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 South 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—South Australia

South Australian broadacre farm cash incomes are projected to increase to an average of $231000 a farm in 2013–14 (Table 2 and Figure 4), around 85 per cent above the average farm cash income recorded for the 10 years to 2012–13.

A 30percent increase in winter crop production and higher sheep and lamb prices has resulted in projected average farm cash income and business profit increasing in all South Australian regions, with the largest increase expected in the Eyre Peninsula (Table 3). Drier seasonal conditions in the Northern Pastoral region have resulted in increased cattle turn-off and farm receipts.

Overall, crop receipts in 2013–14 are projected to increase by around 24 percent, sheep and lamb receipts by 9percent and beef cattle receipts by 4percent. Wool receipts are also expected to be higher. Overall, average total cash costs are projected to increase by around 6percent, with the largest increase expected in repairs and maintenance as producers make use of higher cash flow.

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

Note: p Preliminary estimate. y Provisional estimate.

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

Performance indicator / units / 2011–12 / 2012–13p / RSE (%) / 2013–14y
Total cash receipts / $ / 517 330 / 497 700 / (10) / 580 000
Total cash costs / $ / 326 790 / 330 100 / (9) / 49 000
Farm cash income / $ / 190 550 / 167 500 / (15) / 231 000
Farms with negative farm cash income / % / 11 / 13 / (32) / 9
Farm business profit / $ / 75 380 / 55 000 / (41) / 101 000
Profit at full equity - excluding capital appreciation / $ / 114 350 / 99 900 / (24) / 145 000
Farm capital at 1 July a / $ / 3 742 960 / 3 945 500 / (7) / na
Farm debt at 30 June b / $ / 407 340 / 459 900 / (12) / 439 000
Equity ratio b / % / 89 / 88 / (1) / na
Rate of return - excluding capital appreciation c / % / 3.1 / 2.6 / (20) / 3.7
Off-farm income of owner manager and spouse b / $ / 25 740 / 27 400 / (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. RSE Relative standard errors, expressed as a percentage of the estimate provided.

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

Region / units / 2012–13p / RSE / 2013–14y
North Pastoral / $ / 188 100 / (25) / 211 000
Eyre Peninsula / $ / 208 900 / (24) / 375 000
Murray Lands and Yorke Peninsula / $ / 201 600 / (26) / 249 000
South East / $ / 97 700 / (17) / 136 000

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—South Australia

In 2012–13, average total cash receipts for South 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 fertiliser, interest payments, crop chemicals, and repairs and maintenance. Average farm cash income for grains industry farms in South Australia increased to $227000 per farm in 2012–13 (Figure5).

In 2013–14, winter crop production in South Australia is estimated to have risen by 31 per cent, reflecting an increase area sown to grain crops and higher yields as a result of generally favourable seasonal conditions. Receipts from beef, sheep, lambs and wool are also projected to increase on mixed enterprise farms due mainly to higher sheep and lamb prices.

Total cash costs for grains industry farms are projected to rise slightly in 2013–14, mainly due to an expected increase in expenditure on repairs and maintenance, fuel and sheep purchases compared with 2012–13.

Average farm cash income for grains industry farms in South Australia is projected to increase to around $317000 per farm in 2013–14, over double the average for the previous 10 years of $146 000 (Figure5).

Figure5 Real farm cash income, grains industry, average per farm

Note: p Preliminary estimate. y Provisional estimate.

Performance of sheep industry farms—South Australia

Farm cash incomes were relatively high in real terms for South Australian sheep industry farms in 2010–11 and 2011–12 (Figure 6). However, in 2012–13, a reduction of almost 30 per cent in average prices received for lambs and adult sheep and a 6 per cent reduction in the average wool price received resulted in farm receipts for South Australian sheep farms falling by 35 per cent. Despite a reduction in average cash costs resulting mainly from reduced expenditure on sheep purchases and interest payments, average farm cash income for sheep industry farms declined to an average of $82000 per farm.

In 2013–14, higher adult sheep and lamb prices, together with a small increase in wool prices are projected to result in an increase in farm cash receipts. Average farm cash income for sheep industry farms is projected to increase to average $103000 per farm, around 12per cent above the industry average of $92000 per farm for the ten-years to 2012–13.

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

Note: p Preliminary estimate. y Provisional estimate.

Performance of dairy industry farms— South 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 all states. Nationally, average farm cash income declined from $143360 in 2011–12 to just $44 200 in 2012–13. In South Australia, average farm cash income declined from $195480 in 2011–12 to $88 700 in 2012–13 (Figure 7).

In 2013–14 despite a small reduction in milk production in South Australia higher milk prices for milk producers is projected to result in a rise in average farm cash incomes. Average farm cash income is projected to increase to $189 000 in South Australia, around 34percent above the 10 year average to 2012–13 (Table 4).

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

Note: p Preliminary estimate. y Provisional estimate.

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

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 875 690 / 805 000 / (5) / 906 000
Total cash costs / $ / 680 210 / 716 300 / (5) / 717 000
Farm cash income / $ / 195 480 / 88 700 / (31) / 189 000
Farms with negative farm cash income / % / 6 / 14 / (38) / 13
Farm business profit / $ / 89 430 / -32 300 / (86) / 80 000
Profit at full equity - excluding capital appreciation / $ / 180 120 / 53 400 / (52) / 157 000
Farm capital at 1 July a / $ / 4 245 080 / 4 539 800 / (7) / na
Farm debt at 30 June b / $ / 1 049 390 / 1 103 100 / (17) / 1 051 000
Equity ratio b / % / 75 / 76 / (5) / na
Rate of return - excluding capital appreciation c / % / 4.2 / 1.2 / (53) / 3.4
Off-farm income of owner manager and spouse b / $ / 20 920 / 19 200 / (19) / na

Performance of vegetable industry farms— South Australia

The number of vegetable growing farms in South Australia increasedfrom an estimated 303in 2010–11to399in 2011–12 (Table 5). The majority of vegetable growing farms grew only one vegetable type(59percent of vegetable growing farms) in2011–12 while only 1percent of farms grew five or more vegetable types. The most common vegetables grown were tomatoes (151farms), potatoes (103farms), cauliflowers (42 farms) and cabbages (32farms). Vegetable growing farms were mainly located in three regions across the state:the South-East, the Murray Riverland and the Adelaide plains north of Adelaide. In 2011–12, the average area planted to vegetables32hectares, while the largest 10percent of farms planted an average of 78hectares to vegetables.