The report, Australian Beef Industry – Financial Performance to 2005-06, was released today by Karen Schneider, acting Executive Director, ABARE.

‘Farm cash incomes for Australian beef producers are estimated to have fallen by almost half to around $34 000 in 2005-06. However, the build up in cattle numbers means the drop in underlying farm profitability is likely to have been somewhat smaller,’ explained Ms Schneider.

Information in the report is based on ABARE’s annual agricultural and grazing industries survey. The survey results indicate that average beef cattle turnoff on specialist beef properties with more than 300 beef cattle was down by around 8 per cent in 2005-06. As a result, incomes for these producers are projected to fall even though saleyard prices remained high throughout the year.

Ms Schneider pointed out that there has been a wide range of financial performance among large beef specialists in recent years.

‘Leaving aside any increase in property value, the average rate of return for the top 25 per cent of large specialist beef producers from 2003-04 to 2004-05 was 5.3 per cent, compared with –3.6 per cent for the poorest performing farms.’

The better performing farms were characterised by larger farm areas and superior herd productivity, as reflected in a higher branding rate. The latter may indicate that these farms were less affected by drought, or that these producers implemented superior drought management strategies.

Source: abareconomics.com