Agriculture, Fisheries and Forestry in the Greater Perth Region of Western Australia, 2015

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2015 ABARES

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2015

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

About my region 15.39

April 2015

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2015 ABARES

© Commonwealth of Australia 2015

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Cataloguing data

ABARES 2015, Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2015, About my region 15.39, Canberra, April. CC BY 3.0.

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

Internet

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia 2015is 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,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—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, 2012–13to 2014–15, average per farm

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

Table 4 Financial performance, Western Australia dairy industry, 2012–13to 2014–15, 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, November 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 Broad agricultural land use of the Greater Perth region of Western Australia

Map 2 Agricultural industries of the Greater Perth region of Western Australia

Map 4 ABARES Australian broadacre zones and regions

1

Agriculture, Fisheries and Forestry in the Greater Perth region of Western Australia, 2015 ABARES

1Regional overview

The Greater Perth region comprises thirty one local government areas. It includes the major town centres of Perth, Kwinana, Rockingham and Pinjarra (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 1Broad agricultural land use of the Greater Perth region of Western Australia

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

Map 2 Agricultural industries of the Greater Perth region of Western Australia

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 1millionpeople were employed in the Greater Perth region. The Greater Perth region accounts for 78per cent of total employment in Western Australia and 38per 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 115700people followed by retail trade with 113300people (Figure 1). Other important employment sectors in the region were construction (112500people), professional, scientific and technical services (102600people), education and training (80400people), andmanufacturing (71900people). The agriculture, forestry and fishing sector employed 11800people, representing 1per cent of the region’s workforce.

Figure 1 Employment profile, Greater Perth region, Western Australia, 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 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 / 2162 / 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 / 1309 / 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 / 2310 / 20
Other / 135 / 10 / 3192 / 27
Total Agriculture / 1338 / 100 / 11680 / 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 cattlefarms (314farms) were the most common, accounting for 23per cent of all farms in the Greater Perth region, and 19per cent of all beef cattle 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

A decline in winter grain production after the record crop production in WesternAustralia in 2013–14and lower wheat prices are projected to result in a decrease in average farm cash income in Western Australia (Figure 4 and Table 2), particularly in the Central and SouthWheat Belt (Table 3). The impact of the reduction in crop production on receipts is expected tobe partly offset by pool payments received in 2014–15for grain deliveredin 2013–14and by increased receipts from sheep and lambs resultingfromhigher prices.

In the northern pastoral regions of the Kimberley and Pilbara, increased sales of beef cattle for live export and higher beef cattle prices are projected to increase farm receipts and raise average farm cash income.

Overall, Western Australian broadacre farm cash incomes are projected to decrease to average $211000afarm in 2014–15. If achieved, this would still be around 30percent above the 10-year average to 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, Western Australia broadacre industries, 2012–13to 2014–15, average per farm

Performance indicator / units / 2012–13 / 2013–14p / RSE / 2014–15y
Total cash receipts / $ / 710890 / 919000 / (7) / 846000
Total cash costs / $ / 551450 / 656000 / (6) / 635000
Farm cash income / $ / 159430 / 263000 / (12) / 211000
Farms with negative farm cash income / % / 24 / 21 / (21) / 18
Farm business profit / $ / 22690 / 153700 / (22) / 70000
Profit at full equity excluding capital appreciation / $ / 107890 / 245400 / (15) / 156000
Farm capital at 30 June a / $ / 5217740 / 5347600 / (6) / na
Farm debt at 30 June b / $ / 1006560 / 1078900 / (9) / 1051000
Equity ratio bd / % / 80 / 79 / (2) / na
Rate of return excluding capital appreciatione / % / 2.1 / 4.7 / (13) / 3.0
Off-farm income of owner manager and spouse b / $ / 27980 / 24400 / (14) / 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 3 Farm cash income of Western Australia broadacre farms, by region, 2013–14to 2014–15, average per farm

Region / units / 2013–14p / RSE / 2014–15y
511: WA Kimberly / $ / 232500 / (46) / 636000
512: WA Pilbara and Southern Rangelands / $ / 153600 / (102) / 372000
521: WA Central and South Wheat Belt / $ / 339200 / (13) / 185000
522: WA North and East Wheat Belt / $ / 268700 / (28) / 370000
531: WA South West / $ / 55700 / (41) / 70000

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 4 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—Western Australia

Total winter crop production in Western Australia increased by 53percent in 2013–14compared with 2012–13to a record high with well above average yields. As a result, total crop receipts increased by 40 per cent on grains industry farms. On mixed enterprise farms, the large increase in crop receipts were combined with smaller increases in lamb, sheep and wool receipts. Total cash costs also increased in 2013–14due to higher expenditure on fertiliser, crop chemicals, fuel and higher freight and handling costs associated with harvesting a larger crop than in 2012–13. Expenditure on repairs and maintenance also increased as producers made use of higher cash flow. Farm cash income for Western Australian grains industry farms increased to the historical high of $416600a farm in 2013–14 (Figure 5).

In 2014–15, Western Australia winter crop production is estimated to have declined by 16per cent from the record 2013–14. The impact of lower crop production on farm receipts is expected tobe partly offset by pool payments for grain deliveredin 2013–14and by increased receipts from sheep and lambs, on mixed enterprise farms. Total cash costs are also estimated to decrease in 2014–15due to lower expenditure on fuel, livestock purchases, repairs and maintenance and interest payments compared with 2013–14. Farm cash income for Western Australian grains industry farms is projected to decrease to around $282000a farm in 2014–15, still around27per cent above the industry average for the previous 10years.

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—Western Australia

In 2013–14, higher beef cattle turn-off and a small increase in the average price received for beef cattle sold resulted in a small increase in average farm cash receipts for Western Australian beef industry farms. Higher farm receipts were partly offset by increase in farm cash costs, particularly expenditure on fertiliser, interest payments, crop and pasture chemicals and fuel. As a result, average farm cash income for Western Australian beef industry farms increased only slightly to an average of $60300a farm in 2013–14 (Figure 6).

In 2014–15, higher beef cattle prices and a further increase in beef cattle turn-off in the pastoral regions of the Kimberley and Pilbara are projected to result in an increase in average farm receipts of around 10per cent. In addition, total cash costs are estimated to decline slightly with reduced expenditure on interest payments, fuel and beef cattle purchases. Farm cash income is projected to increase to average $130000a farm in 2014–15, around 70 per cent above the average farm cash income for the 10 years ending 2013–14.

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— Western Australia

In 2013–14average 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 Western Australia, there was a small increase in the average milk price received and despite a reduction in milk production, average farm cash receipts increased. The increase in farm receipts was partly offset by higher farm cash costs. Nevertheless, for Western Australian dairy farms, average farm cash income is estimated to have increased from $133370in 2012–13to $161300in 2013–14 (Figure 7 and Table 4).

In 2014–15, a small increase is expected inmilk production in Western Australia. Higher milk production in combination with a small increase in average farmgate milk price is projected to result in average farm cash income for Western Australian dairy farms increasing slightly to average $166000afarm. This is around2per cent above the average for the previous 10years, in real terms.