Agriculture, Fisheries and Forestry in the Mackay Region of Queensland, 2015

Agriculture, Fisheries and Forestry in the Mackay region of Queensland, 2015 ABARES

Agriculture, Fisheries and Forestry in the Mackay region of Queensland, 2015

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

About my region 15.29

April 2015

Agriculture, Fisheries and Forestry in the Mackay region of Queensland, 2015 ABARES

© Commonwealth of Australia 2015

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Cataloguing data

ABARES 2015, Agriculture, Fisheries and Forestry in the Mackay region of Queensland 2015, About my region 15.29, Canberra, April. CC BY 3.0.

ISBN 978-1-74323-090-9
ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the Mackay region of Queensland 2014 is 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 byTherese 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—Queensland

3Fisheries sector

4Forestry sector

References

Tables

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

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

Table 3 Farm cash income of Queensland broadacre farms, by region, 2013–14to 2014–15, average per farm

Table 4 Financial performance, Queensland dairy industry, 2012–13to 2014–15, average per farm

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

Figures

Figure 1 Employment profile, Mackay region, November 2014

Figure 2 Value of agricultural production, Mackay region, Queensland, 2012–13

Figure 3 Distribution of farms by estimated value of agricultural operations, Mackay region, Queensland, 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, Queensland, 2005–06to 2013–14

Figure 9 Area of native forest, by tenure

Maps

Map 1 Broad agricultural land use of the Mackay region of Queensland

Map 2 Agricultural industries of the Mackay region of Queensland

Map 3 ABARES Australian broadacre zones and regions

1

Agriculture, Fisheries and Forestry in the Mackay region of Queensland, 2015 ABARES

1Regional overview

The Mackay region of Queensland is located in the east of the state and includes the Whitsunday Islands (Map 1). The region comprises the three local government areas of Isaac, Mackay, and Whitsunday, and the major regional town of Mackay. The region covers a total area of around 90100 square kilometres, or 5 per cent of Queensland’s total area, and is home to approximately 166800 people (ABS 2011).

Agricultural land in the Mackay region occupies 78150 square kilometres, or 87 per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 8070 square kilometres, or 9 per cent of the region. The most common land use by area is grazing natural vegetation, which occupies 41340 square kilometres or 46 per cent of the Mackay region.

Map 1Broad agricultural land use of the Mackay region of Queensland

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

Map 2 Agricultural industries of the Mackay region of Queensland

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

Employment

Australian Bureau of Statistics (ABS) data from the 2014 Labour Force Survey indicate that around 103200 people were employed in the Mackay region. The Mackay region accounts for 4per cent of total employment in Queensland and 9 per cent of all people employed in the Queensland agriculture, forestry and fishing sector.

Mining was the largest employment sector, with 14100 people (Figure 1), followed by construction with 12600 people. Other important employment sectors in the region were retail trade (10600 people), health care and social assistance (8400 people), and manufacturing, and other services (6900people).The agriculture, forestry and fishing sector employed 4900 people, representing 5 per cent of the region’s workforce.

Figure 1 Employment profile, Mackay region, November 2014

Note: Annual average of the preceding 4 quarters.
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 Mackay region was $892million, which was 9 per cent of the total gross value of agricultural production in Queensland ($10billion). This is the most recent year for which ABS data are available.

The Mackay region has a diverse agricultural sector, with considerable horticultural and livestock production. The most important commodity in the Mackay region based on the gross value of agricultural production was sugar cane (Figure 2). In 2011–12, sugar cane contributed 34 per cent ($304million) to the value of agricultural production in the region. Vegetables contributed 26per cent ($236 million), with the main crops being tomatoes ($105 million), beans ($59 per cent) and capsicums (excluding chillies, $26 million). Sorghum accounted for 4 per cent ($38million).

In 2012–13, the Mackay region accounted for around 51 per cent of the total value of beans production in Queensland, 48 per cent of the total value of tomatoes and 45per cent of the total value of capsicum. It also accounted for 28 per cent of sugar cane production and 23 per cent of the state’s vegetable production.

Figure 2 Value of agricultural production, Mackay region, Queensland, 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 2012–13 there were 1883 farms in the Mackay region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 7per cent of all farm businesses in Queensland.

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

Industry Classification / Mackay region / Queensland
no. / % / no. / %
Sugar cane / 842 / 45 / 2 912 / 11
Beef Cattle / 635 / 34 / 12 741 / 48
Vegetable / 57 / 3 / 932 / 4
Fruit and nuts / 46 / 2 / 1 630 / 6
Grain growing / 42 / 2 / 1 315 / 5
Other livestock / 37 / 2 / 811 / 3
Mixed grains and livestock / 35 / 2 / 1 060 / 4
Other / 190 / 10 / 5 140 / 19
Total Agriculture / 1 883 / 100 / 26 541 / 100

Note: 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. Sugar cane growing farms (842 farms) were the most common, accounting for 45 per cent of all farms in the Mackay region, and 29 per cent of all sugar cane farms in Queensland.

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 42 per cent of farms in the Mackay region had an EVAO of less than $150000 (Figure 3). These farms accounted for only 5per cent of the total value of agricultural operations in 2012–13. In comparison, 30 per cent of farms in the region had an EVAO of more than $350000 and accounted for an estimated 78per cent of the total value of agricultural operations in the region in 2012–13.

Figure 3 Distribution of farms by estimated value of agricultural operations, Mackay region, Queensland, 2012–13

Source: Australian Bureau of Statistics

Farm financial performance—Queensland

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 Queensland.

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—Queensland

In 2014–15, farm cash incomes are also projected to rise in Queensland mainly because of higher beef cattle prices. Drought continued to affect Queensland broadacre farms in 2014-15, subduing crop and livestock production and maintaining high turn-off of cattle and sheep.

Average farm cash incomes are projected to increase in all regions of Queensland in 2014–15except the Central North and the West and South West (Table 3). Relatively low farm cash incomes were recorded in most regions in 2013–14and high turn-off of beef cattle resulted in reduced herd sizes.

Receipts from beef cattle are projected to increase in 2014–15. However, overall, crop receipts are expected to be reduced, with low receipts from winter grain crops and while a large increase is expected in grain sorghum production, businesses are likely to sell a part of this production in 2015–16.

Average total cash costs are projected to decrease by around 5percent in 2014–15, mainly as a result of a projected decrease in expenditure on fodder, fuel and interest payments and a decline in beef cattle purchase in some regions.

Despite higher beef cattle receipts, average farm cash income for Queensland broadacre farms is projected to increase only slightly to an average of $79 000 a farm in 2014–15 (Table 2 and Figure 4). This is only a small increase from the $68 200 recorded in 2013–14 and is still around 10 per cent below the average for the decade ending 2013–14.

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, Queensland broadacre industries, 2012–13to 2014–15, average per farm

Performance indicator / units / 2012–13 / 2013–14p / RSE / 2014–15y
Total cash receipts / $ / 367550 / 356600 / (4) / 363000
Total cash costs / $ / 270830 / 288400 / (5) / 284000
Farm cash income / $ / 96720 / 68200 / (12) / 79000
Farms with negative farm cash income / % / 32 / 31 / (12) / 25
Farm business profit / $ / –5680 / –77400 / (13) / –54000
Profit at full equity excluding capital appreciation / $ / 36500 / –32600 / (28) / –11000
Farm capital at 30 June a / $ / 4989410 / 5022300 / (3) / na
Farm debt at 30 June b / $ / 592510 / 618100 / (8) / 612000
Equity ratio bd / % / 89 / 87 / (1) / na
Rate of return excluding capital appreciatione / % / 0.7 / –0.6 / (29) / –0.2
Off-farm income of owner manager and spouse b / $ / 24390 / 28300 / (10) / 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

Table 3Farm cash income of Queensland broadacre farms, by region, 2013–14to 2014–15, average per farm

Region / units / 2013–14p / RSE / 2014–15y
311: QLD Cape York and the Gulf / $ / 14700 / (481) / 440000
312: QLD West and South West / $ / 208000 / (37) / 134000
313: QLD Central North / $ / 88300 / (55) / 41000
314: QLD Charleville - Longreach / $ / 75100 / (44) / 96000
321: QLD Eastern Darling Downs / $ / 71500 / (26) / 84000
322: QLD Darling Downs and Central Highlands / $ / 81200 / (19) / 93000
331: QLD South Queensland Coastal / $ / 32700 / (28) / 46000
332: QLD North Queensland Coastal / $ / 15000 / (102) / 31000

pABARES preliminary estimates. yABARES 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

Map 3 ABARES Australian broadacre zones and regions

Note: Each region is identified by a unique code of three digits. The first digit identifies the state or territory, the second digit identifies the zone and the third digit identifies the region.

Source: ABARES

Performance of grains industry farms—Queensland

Average farm cash receipts decreased for Queensland grains industry farms in 2013–14as a result of reduced production of summer and winter grain, oilseed and pulse crops. Farm cash income for grains industry farms in Queensland decreased to average around $91000a farm in 2013–14, after an historic high of $211000in 2012–13 (Figure 5).

In 2014–15, production of winter crops is estimated to have declined by around 15per cent and despite an expected increase in production of grain sorghum and other summer crops, total crop receipts are expected to decline. On mixed enterprise farms decreased receipts from beef cattle due to reduced turn-off are alsoexpected to contribute to lowerprojected farm cash receipts. The reduction in receipts is expected to be only partly offset by reduced expenditure on interest payments, repairs and maintenance, fuel and livestock purchase compared with 2013–14. As a result, farm cash income is projected to decline slightly to average $84800a farm, the lowest farm cash income since 2006–07when drought severely reduced incomes for Queensland grains industry farms.

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

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

Performance of beef industry farms—Queensland

In 2013–14, expansion of drought conditions resulted in a 20 per cent increase in the average number of cattle sold per farm by Queensland beef industry farms. The increase in turn-off more than offset the reduction in the average price received for cattle sold, resulting in an increase in farm receipts. This increase was more than offset by increased expenditure on fodder (which almost doubled), fuel and interest payments, resulting in average farm cash income for beef industry farms declining to average $68200a farm (Figure 6).

In 2014–15,receipts from beef cattle are projected to increase as a result of higher beef cattle prices and continued high cattle turn-off during the first half of 2014–15. Farm cash costs are also projected to increase, mainly as a result of increased expenditure on repairs and maintenance and despite an expected reduction in expenditure on beef cattle purchases and fuel. Farm cash income for Queensland beef industry farms is projected to increase slightly to average $82000a farm in 2014–15 and still around 5per cent below the average for the previous 10years, in real terms (Figure 6).

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

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

Performance of dairy industry farms— Queensland

In 2013–14,average farm cash incomes increased in most states as a result of higher milk prices. Nationally, average farm cash income increased from $44130in 2012–13to $163900in 2013–14. In Queensland, there was only a very small increase in the average milk price received and both total milk production and the number of dairy farms declined. For Queensland dairy farms, average farm cash income increased only slightly from $71520in 2012–13to $73800in 2013–14 (Table 4 and Figure 7).

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