Agriculture and Fisheries in the Illawarra region of New South Wales, 2015 ABARES
Agriculture and Fisheries in the Illawarra region of New South Wales, 2015
Research by the Australian Bureau of Agricultural
and Resource Economics and Sciences
About my region 15.7
April 2015
Agriculture and Fisheries in the Illawarra region of New South Wales, 2015 ABARES
© Commonwealth of Australia 2015
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.
Cataloguing data
ABARES 2014, Agriculture and Fisheries in the Illawarra region of New South Wales, 2015, About my region 15.7, Canberra, April. CC BY 3.0.
ISBN 978-1-74323‒104-3
ABARES project 43009
Internet
Agriculture and Fisheries in the Illawarra region of New South Wales 2015is available at agriculture.gov.au/abares.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)
Postal address GPO Box 858 Canberra ACT 2601
Switchboard +61262723933
Facsimile +61262722001
Email
Web agriculture.gov.au/abares
Inquiries about the licence and any use of this document should be sent to .
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,Peter Martin, Haydn Valle, Timothy Connolly, Lucy Randall and Kasia Mazur.
Contents
1Regional overview
Employment
2Agriculture sector
Value of agricultural production
Number and type of farms
Farm financial performance—New South Wales
3Fisheries sector
References
Tables
Table 1 Number of farms, by industry classification, 2012–13
Table 2 Financial performance, New South Wales broadacre industries, 2012–13to 2014–15, average per farm
Table 3 Farm cash income of New South Wales broadacre farms, by region, 2013–14to 2014–15, average per farm
Table 4 Financial performance, New South Wales dairy industry, 2012–13to 2014–15, average per farm
Table 5 Physical and financial performance, vegetable growing farm businesses, New South Wales, 2012–13and 2013–14
Figures
Figure 1 Employment profile, Illawarra region, November 2014
Figure 2 Value of agricultural production, Illawarra region, New South Wales, 2012–13
Figure 3 Distribution of farms by estimated value of agricultural operations, Illawarra region, New South Wales, 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, sheep industry, average per farm
Figure 7 Real farm cash income, beef industry, average per farm
Figure 8 Real farm cash income, dairy industry, average per farm
Figure 9 Real farm cash income, vegetable growing farm businesses, New South Wales, 2005–06to 2013–14
Maps
Map 1 Broad agricultural land use of the Illawarra region of New South Wales
Map 2 Agricultural industries of the Illawarra region of New South Wales
Map 3 ABARES Australian broadacre zones and regions
1
Agriculture and Fisheries in the Illawarra region of New South Wales, 2015 ABARES
1Regional overview
The Illawarra region of New South Wales includes the city of Wollongong and the hinterland area along the coast and west to the southern highlands region (Map 1). The region comprises the three local government areas of Kiama, Shellharbour and Wollongong, and parts of the local government areas of Campbelltown, Sutherland Shire and Wollondilly to the north, and Shoalhaven and Wingecarribee to the south west. The region covers a total area of around 1500square kilometres or less than 1per cent of New South Wales and is home to approximately 276000people (ABS 2011).
Agricultural land in the Illawarra region occupies 340square kilometres, or 23per cent of the region.Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 900square kilometres, or 60per cent of the region.The most common land use by area is minimal use, which occupies 770in square kilometres or 51per cent of the Illawarra region.
Map 1Broad agricultural land use of the Illawarra region of New South Wales
Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)
Map 2 Agricultural industries of the Illawarra region of New South Wales
Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)
Employment
Australian Bureau of Statistics (ABS) data from the 2014 Labour Force Surveyindicate that around 131500people were employed in the Illawarra region. The Illawarra region accounts for 4per cent of total employment in New South Wales and less than 1per cent of all people employed in the New South Wales agriculture, forestry and fishing sector.
Health care and social assistance was the largest employment sector with 19300people followed by education and training with 16900people (Figure 1). Other important employment sectors in the region were construction (12900people), retail trade(12400people), and accommodation and food services(11800people).
Figure 1 Employment profile, Illawarra 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 Illawarra region was $28million, which was less than 1per cent of the total gross value of agricultural production in New South Wales ($12.1billion). This is the most recent year for which ABS data are available.
The agricultural sector in the Illawarra region is dominated by dairy and cattle production, and some horticultural output. The most important commodity in the Illawarra region based on the gross value of agricultural production was milk (Figure 2). In 2012–13, milk production contributed 70per cent ($19million) to the value of agricultural production in the region. Cattle and calves accounted for 24per cent ($7million) and mushroom3per cent ($1million).
In 2012–13, the Illawarra region accounted for around 4per cent of the total value of New South Wales milk production, and 1per cent of the state’s total mushroom and hay production.
Figure 2 Value of agricultural production, Illawarra region, New South Wales, 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 231farms in the Illawarra region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains less than 1per cent of all farm businesses in New South Wales.
Farms are classified in Table 1 according to the activities that generate most of their value of production. Beef cattle farms (86farms) were the most common, accounting for 37per cent of all farms in the Illawarra region, and 1per cent of all beef cattle farms in New South Wales.
Table 1 Number of farms, by industry classification, 2012–13
Industry Classification / Illawarra region / New South Walesno. / % / no. / %
Beef Cattle / 86 / 37 / 13626 / 32
Dairy / 54 / 23 / 1115 / 3
Vegetable / 2 / 1 / 1062 / 3
Sheep / 2 / 1 / 4450 / 11
Other livestock / 1 / 1 / 1631 / 4
Other / 85 / 37 / 20197 / 48
Total Agriculture / 231 / 100 / 42082 / 100
Note: Estimated value of agricultural operations greater than $5000.
Source: Australian Bureau of Statistics
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 74per cent of farms in the Illawarra region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 13per cent of the total value of agricultural operations in 2012–13. In comparison, 14per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 66per 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, Illawarra region, New South Wales, 2012–13
Source: Australian Bureau of Statistics
Farm financial performance—New South Wales
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 New South Wales.
Box 1Definitions
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—New South Wales
Drought reduced crop production in north western New South Wales and despite increased turnoff of beef cattle and sheep farm cash incomes declined. However, in southern New South Wales grain, oilseed and pulse production increased and with higher sheep and lamb prices resulted in increased farm receipts and much higher farm cash incomes. Overall, the increase in farm cash income in southern regions more than outweighed the reduction in the north to result in the average farm cash income for New South Wales broadacre farms increasing to $106000a farm, in 2013–14.
In 2014–15, further increases in average farm cash income are expected for mixed livestock–crops and sheep farms in southern regions of New South Wales, the Riverina, the Central West and Coastal New South Wales as a result of higher beef, sheep and lamb prices (Table 3). However, in the North West Slopes and Plains and Far Western New South Wales, farm cash incomes are projected to decline as continued dry conditions further reduced crop production. Incomes for beef and sheep farms are projected to decrease as the number of sheep, lambs and beef cattle sold declines. The proportion of farms recording negative farm cash incomes is projected to exceed 30percent in the north-west of the state.
With increased incomes in the southern and central regions and reduced incomes in the north, average farm cash income of New South Wales broadacre farms is projected to decline only slightly in 2014–15compared with 2013–14. Onaverage, farm cash income for broadacre farms in New South Wales is projected to average $106000afarm in 2014–15 (Table 2 and Figure 4), still around 44percent above the 10-year average to2013–14.
Figure 4 Real farm cash income, broadacre industries, average per farm
pPreliminary estimate. yProvisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Table 2 Financial performance, New South Wales broadacre industries, 2012–13to 2014–15, average per farm
Performance indicator / units / 2012–13 / 2013–14p / RSE / 2014–15yTotal cash receipts / $ / 379950 / 394500 / (5) / 392000
Total cash costs / $ / 284620 / 286500 / (5) / 286000
Farm cash income / $ / 95330 / 108000 / (7) / 106000
Farms with negative farm cash income / % / 23 / 24 / (15) / 23
Farm business profit / $ / 5840 / 7300 / (105) / 10000
Profit at full equity excluding capital appreciation / $ / 40490 / 41600 / (20) / 44000
Farm capital at 30 June a / $ / 3504260 / 3545900 / (4) / na
Farm debt at 30 June b / $ / 428500 / 445300 / (8) / 451000
Equity ratio bd / % / 88 / 87 / (1) / na
Rate of return excluding capital appreciatione / % / 1.2 / 1.2 / (19) / 1.2
Off-farm income of owner manager and spouse b / $ / 39190 / 35300 / (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 New South Wales broadacre farms, by region, 2013–14to 2014–15, average per farm
Region / units / 2013–14p / RSE / 2014–15y111: NSW Far West / $ / 121400 / (37) / 107000
121: NSW North West Slopes and Plains / $ / 102300 / (20) / 49000
122: NSW Central West / $ / 115200 / (14) / 130000
123: NSW Riverina / $ / 187400 / (12) / 188000
131: NSW Tablelands / $ / 55600 / (19) / 52000
132: NSW Coastal / $ / 8400 / (97) / 9000
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—New South Wales
Average farm cash income for New South Wales grains industry farms increased in 2013–14compared with 2012–13. Despite increased grain crop production in southern regions reductions in crop production as a result of drought conditions in northern regions led to an overall decreased crop receipts for New South Wales grains industry farms. On mixed enterprise farms increased receipts from sheep and lambs as a result of higher prices together with an increase in numbers soldwas more than offset by reduced receipts from crops.
In 2014–15, crop receipts are projected to decline overall for New South Wales grains farms as a result of reduced production of both winter and summer crops. On mixed enterprise farms, lower crop receipts are expected to be partly offset by increased receipts from sheep, lambs and beef as a result of higher prices.
Farm cash income for New South Wales grains industry farms is projected to average $183000a farm in 2014–15, a reduction on the average farm cash income for 2013–14, but still high compared to average farm cash income over the 10 years ending 2013–14 (Figure 5). Farm cash incomes for New South Wales grains industry farms were generally reduced by dry conditions throughout much of this decade.
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 sheep industry farms—New South Wales
In 2013–14, higher prices received for adult sheep and lambs combined with increased sheep and lamb turn-off more than offset increased expenditure on fodder, sheep purchases, repairs and maintenance and interest payments. Farm cash income for New South Wales sheep industry farms increased slightly toaverage $72000a farm in 2013–14.
In 2014–15, higherprices for adult sheep and lambs are projected to be more than offset by a reduction in wool receipts as a result of reduction in both the quantity of wool sold and wool prices. However a projected decrease in expenditure on sheep purchases, fuel and repairs and maintenance is expected to result in average farm cash income for sheep industry farms remaining similar to that recorded in 2013–14at an average of $75000a farm. If achieved this would be around 20per cent above the industry average of $62000a farm for the ten-years to 2013–14, in real terms (Figure 6).
Figure 6 Real farm cash income, sheep industry, average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian Agricultural and Grazing Industries Survey
Performance of beef industry farms—New South Wales
A smaller average herd size for New South Wales beef industry farms compared with the average for the whole of Australia results in average farm cash income for New South Wales beef industry farms typically being below the national average (Figure 7).