Agriculture and Fisheries in the Greater Sydney Region of New South Wales, 2015

Agriculture and Fisheries in the Greater Sydney region of New South Wales, 2015 ABARES

Agriculture and Fisheries in the Greater Sydney region of New South Wales, 2015

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

About my region 15.2

April 2015

Agriculture and Fisheries in the Greater Sydney region of New South Wales, 2015 ABARES

© Commonwealth of Australia 2015

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Cataloguing data

ABARES 2015, Agriculture and Fisheries in the Greater Sydney region of New South Wales, 2015, About my region 15.2, Canberra, April. CC BY 3.0.

ISBN 978-1-74323‒081-7
ABARES project 43009

Internet

Agriculture and Fisheries in the Greater Sydney region of New South Wales 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, 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, Greater Sydney region, November 2014

Figure 2 Value of agricultural production, Greater Sydney region, New South Wales, 2012–13

Figure 3 Distribution of farms by estimated value of agricultural operations, Greater Sydney, 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 Greater Sydney region of New South Wales

Map 2 Agricultural industries of the Greater Sydney region of New South Wales

Map 3 ABARES Australian broadacre zones and regions

1

Agriculture and Fisheries in the Greater Sydney region of New South Wales, 2015 ABARES

1Regional overview

The Greater Sydney region comprises 44local government areas. It includes the major town centres of Sydney, Richmond, Katoomba, Camden and the central coast (Map 1). The region covers a total area of around 12400square kilometres or 2per cent of New South Wales and is home to approximately 4million people (ABS 2011).

Agricultural land in the Greater Sydney region occupies2250square kilometres, or 18per cent of the region.Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 7320square kilometres, or 59per cent of the region.The most common land use by area is nature conservation, which occupies 5250square kilometres or 42per cent of the Greater Sydney region.

Map 1Broad agricultural land use of the Greater Sydney region of New South Wales

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

Map 2 Agricultural industries of theGreater Sydney 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 2.42 million people were employed in the Greater Sydney region. The Greater Sydney region accounts for 67per cent of total employment in New South Wales and 11per cent of all people employed in the New South Wales agriculture, forestry and fishing sector.

Health care and social assistancewas the largest employment sector with 284000people followed by professional, scientific and technical services with 254100people(Figure 1). Other important employment sectors in the region were retail trade (237100people), construction(204500people) manufacturing(192800people). The agriculture, forestry and fishing sector employed 9800people,representing less than 1per cent of the region’s workforce.

Figure 1 Employment profile, Greater Sydney 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 Greater Sydney region was $754million, which was 6per 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 Greater Sydney region has an agricultural sector with several significant commodities. The most important commodity in the Greater Sydney region (Figure 2) based on the gross value of agricultural production was poultry. In 2012–13, poultry contributed 41per cent ($308million) to the value of agricultural production in the region followed bynurseries, cut flowers and turf which accounted for 19per cent ($145million). Vegetables accounted for 18per cent ($137million) with the main crops being mushrooms ($72million), tomatoes ($10million), potatoes ($9million) and lettuce ($6million). Whilefruit and nuts (excluding grapes) accounted for 10per cent ($76million) with the main crops being nectarines ($3million), peaches ($2million), strawberries ($1million) and oranges ($1million).

In 2012–13, the Greater Sydney region accounted for around 95per cent of the total value of New South Wales strawberries, 79per cent of the total value of mushrooms and 58per cent of the total value of cultivated turf.

Figure 2 Value of agricultural production, Greater Sydney 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 2177farms in the Greater Sydney region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 5per cent of all farm businesses in New South Wales.

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

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. Vegetable farms (616farms) were the most common, accounting for 30per cent of all farms in the Greater Sydney region, and 58per cent of all vegetable farms in New South Wales.

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 39per cent of farms in the Greater Sydney region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 2per cent of the total value of agricultural operations in 2012–13. In comparison, 21per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 82per 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, Greater Sydney, 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

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

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