Agriculture, Fisheries and Forestry in the Greater Perth Region of Western Australia, 2014

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2014 ABARES

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2014

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

About my region 14.39

December 2014

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2014 ABARES

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Cataloguing data

ABARES 2014, Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia 2014, About my region 14.39, Canberra, December. CC BY 3.0.

ISSNTBA
ISBN 978-1-74323-085-5
ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia 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, Haydn Valle, Mary Stephan and Sharan Singh.

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, 2012–13

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

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

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

Table 5 Physical and financial performance, vegetable growing farm businesses, Western Australia, 2012–13and 2013–14

Figures

Figure 1 Employment profile, Greater Perth region, Western Australia, August 2014

Figure 2 Value of agricultural production, Greater Perth region, Western Australia,

Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Perth region, Western Australia, 2012–13

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 Real farm cash income, vegetable growing farm businesses, Western Australia, 2005–06to 2013–14

Figure 9 Area of native forest, by tenure

Maps

Map 1 Greater Perth region of Western Australia

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2014 ABARES

1Regional overview

The Greater Perth region comprises thirty one local government areas. It includes the major town centres of Armadale, Fremantle, Joondalup, Mandurah, Rockingham and Perth (Map 1). The region covers a total area of around 6400square kilometres or less than 1per cent of Western Australia’s total area and is home to approximately 1728900people (ABS 2011).

Agricultural land in the Greater Perth region occupies 2130square kilometres, or 33per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 1330square kilometres, or 21per cent of the region. The most common land use by area is urban intensive use, which occupies 1460square kilometres or 23per cent of the Greater Perth region.

Map 1Greater Perth region of Western Australia

Employment

Australian Bureau of Statistics (ABS) data from 2014indicate that around 1millionpeople were employed in the Greater Perth region. The Greater Perth region accounts for 79per cent of total employment in Western Australia and 37per cent of all people employed in the Western Australian agriculture, forestry and fishing sector.

Health care and social assistance was the largest employment sector with 114500people followed by retail trade with 112400people (Figure 1). Other important employment sectors in the region were construction (110100people), professional, scientific and technical services (99300people), education and training (79000people), andmanufacturing (72300people). The agriculture, forestry and fishing sector employed 10700people, representing 1per cent of the region’s workforce.

Figure 1 Employment profile, Greater Perth region, Western Australia, 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 Greater Perth region was $463million, which was 7per cent of the total gross value of agricultural production in Western Australia ($6.7billion). This is the most recent year for which ABS data are available.

The most important commodity in the Greater Perth region based on the gross value of agricultural production was vegetables (Figure 2). In 2012–13, vegetables contributed 27per cent ($126million) to the total value of agricultural production in the region, with the major crops being lettuce ($24million), tomatoes ($19million) and capsicum (excluding chillies) ($7million). Nurseries, flowers and turf accounted for 17per cent ($80million). Fruit and nuts (excluding grapes) accounted for 11per cent ($51million), with the major crops being strawberries ($17million), apples ($10million), and peaches, nectarines and pears ($4million, each).

Figure 2 Value of agricultural production, Greater Perth region, Western Australia,

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 1338farms in the Greater Perth region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 11per cent of all farm businesses in Western Australia.

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

Industry Classification / Greater Perth region / Western Australia
no. / % / no. / %
Beef Cattle / 314 / 23 / 2 162 / 19
Fruit and nuts / 262 / 20 / 922 / 8
Vegetable / 202 / 15 / 464 / 4
Other livestock / 134 / 10 / 359 / 3
Nurseries, Cut Flowers and Turf / 112 / 8 / 186 / 2
Poultry / 55 / 4 / 83 / 1
Sheep / 45 / 3 / 1 309 / 11
Mixed livestock / 40 / 3 / 273 / 2
Dairy / 23 / 2 / 310 / 3
Other Crop growing / 7 / 1 / 108 / 1
Mixed grains and livestock / 7 / 1 / 2 310 / 20
Other / 135 / 10 / 3 192 / 27
Total Agriculture / 1 338 / 100 / 11 680 / 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 cattle (314farms) were the most common, accounting for 23per cent of all farms in the Greater Perth region, and 15per cent of all fruit and nut farms in Western Australia.

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 54per cent of farms in the Greater Perth 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, 17per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 83per cent of the total value of agricultural operations in the region.

Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Perth region, Western Australia, 2012–13

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 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 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 $317000per farm in 2013–14—around double the 10year 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.
Source: ABARES Australian Agricultural and Grazing Industries Survey

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

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 742230 / 755100 / (8) / 974000
Total cash costs / $ / 554460 / 578600 / (6) / 657000
Farm cash income / $ / 187770 / 176600 / (16) / 317000
Farms with negative farm cash income / % / 22 / 23 / (19) / 22
Farm business profit / $ / 101190 / 41400 / (67) / 177000
Profit at full equity - excluding capital appreciation / $ / 184250 / 128700 / (24) / 265000
Farm capital at 1 July a / $ / 5540650 / 5381100 / (7) / na
Farm debt at 30 June b / $ / 975280 / 1088300 / (9) / 1035000
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 / $ / 26910 / 27200 / (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, 2012–13to 2013–14, average per farm

Region / units / 2012–13p / RSE / 2013–14y
Kimberly / $ / –141800 / (184) / 664000
Pilbara and Southern Rangelands / $ / 101400 / (184) / 234009
Central and South Wheat Belt / $ / 225100 / (20) / 442000
North and East Wheat Belt / $ / 189200 / (33) / 221000
South West / $ / 49800 / (29) / 61000

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

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 2012–13due to higher expenditure on crop chemicals, interest payments, fertiliser, and fuel. Average farm cash income for grains industry farms in Western Australia increased to $291500per farm in 2012–13 (Figure 5).

Western Australia had a favourable finish to the 2013–14winter 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 2013–14to 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 34per cent in 2013–14. Total cash costs are also estimated to increase in 2013–14due 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 $430000per farm in 2013–14, over double the industry average for the previous 10years (Figure 5).

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

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

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 $49750per 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 $107000per farm in 2013–14.

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

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

Performance of dairy industry farms— Western Australia

In 2012–13a 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 $143360in 2011–12to just $44200in 2012–13. In Western Australia, a small increase in milk prices and production resulted in an improvement in average farm cash income in 2012–13to $133400 (Table 4 and Figure 7).

In 2013–14average 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 $129000per 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 10year average to 2012–13.

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

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 899120 / 1002700 / (8) / 999000
Total cash costs / $ / 787600 / 869300 / (9) / 860000
Farm cash income / $ / 111520 / 133400 / (22) / 138000
Farms with negative farm cash income / % / 7 / 6 / (49) / 21
Farm business profit / $ / 24120 / 75700 / (36) / 22000
Profit at full equity - excluding capital appreciation / $ / 112020 / 175600 / (16) / 114000
Farm capital at 1 July a / $ / 9325180 / 11255100 / (14) / na
Farm debt at 30 June b / $ / 987370 / 1106100 / (19) / 1008000
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 / $ / 8250 / 7300 / (20) / na