Agriculture, Fisheries and Forestry in the Cairns Region of Queensland, 2014

Agriculture, Fisheries and Forestry in the Cairns region of Queensland, 2014 ABARES

Agriculture, Fisheries and Forestry in the Cairns region of Queensland, 2014

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

About my region 14.25

December 2014

Agriculture, Fisheries and Forestry in the Cairns region of Queensland, 2014 ABARES

© Commonwealth of Australia 2014

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Cataloguing data

ABARES 2014, Agriculture, Fisheries and Forestry in the Cairns region of Queensland 2014, About my region 14.25, Canberra, December. CC BY 3.0.

ISSNTBA
ISBN 978-1-74323-086-2
ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the Cairns region of Queensland 2014is 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, Haydn Valle, Mary Stephan 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, 2011–12to 2013–14, average per farm

Table 3 Farm cash income of Queensland broadacre farms, by region, 2012–13to 2013–14, average per farm

Table 4 Financial performance, Queensland dairy industry, 2011–12to 2013–14, average per farm

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

Figures

Figure 1 Employment profile, Cairns region, August 2014

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

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

Figure4 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 Cairns region of Queensland

Map 2 Australian broadacre zones and regions

1

Agriculture, Fisheries and Forestry in the Cairns region of Queensland, 2014 ABARES

1Regional overview

The Cairns region is located in the north of Queensland (Map 1). The region comprises the three local government areas of Cairns, Cassowary Coast and Yarrabah, part of the Tablelands local government area, and the major regional towns of Babinda, Cairns, Lucinda and Port Douglas. The region covers a total area of around 21300squarekilometres or 1percent of Queensland’s total area and is home to approximately 224400people (ABS 2011).

Agricultural land in the Cairns region occupies 9522square kilometres, or 45per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 10640square kilometres, or 50per cent of the region. The most common land use by area is nature conservation, which occupies 8280square kilometres or 39per cent of the Cairns region.

Map 1Cairns region of Queensland

Employment

Australian Bureau of Statistics (ABS) data from 2014indicate that around 112700people were employed in the Cairns region. The Cairns region accounts for 5per cent of total employment in Queensland and 9per cent of all people employed in the Queensland agriculture, forestry and fishing sector.

Retail trade was the largest employment sector with 14200people (Figure 1). Health care and social assistance was the second largest employing sector with 12500people followed by the construction sector with 10300people. Other important employment sectors in the region were education and training (9300people), accommodation and food services (9000people) and transport, postal and warehousing (7600people). The agriculture, forestry and fishing sector employed 4900people, representing 4percent of the region’s workforce.

Figure 1 Employment profile, Cairns region, August 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 2012–13the gross value of agricultural production (GVAP) in the Cairns region was $916million, which was 9per 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 Cairns region has a diverse and important agricultural sector. The most important agricultural commodity in the Cairns region based on the gross value of agricultural production was fruit and nuts (Figure 2). In 2012–13, fruit and nuts (excluding grapes) contributed 57per cent ($525million) to the value of agricultural production in the region, with the major crops being bananas ($444million), avocados ($41million) and mangoes ($13million). Sugar cane accounted for 19per cent ($175million) of the total value, vegetables contributed 6per cent ($59million) and cattle and calves contributed 5per cent ($42million).

In 2012–13, the Cairns region accounted for around 97per cent of the total value of Queensland banana production, 40per cent of the total value of potato production, and 6per cent of the total value of avocado production.

Figure 2 Value of agricultural production, Cairns 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 2012–13there were 1886farms in the Cairns 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 / Cairns region / Queensland
no. / % / no. / %
Sugar cane / 570 / 30 / 2 912 / 11
Beef Cattle / 479 / 25 / 12 741 / 48
Fruit and nuts / 438 / 23 / 1 630 / 6
Vegetable / 75 / 4 / 932 / 4
Dairy / 59 / 3 / 634 / 2
Nurseries, Cut Flowers and Turf / 53 / 3 / 367 / 1
Grain growing / 13 / 1 / 1 315 / 5
Mixed grains and livestock / 12 / 1 / 1 060 / 4
Other / 187 / 10 / 4 951 / 19
Total Agriculture / 1 886 / 100 / 26 541 / 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. Sugar cane growing (570farms) was the most common, accounting for 30per cent of all farms in the Cairns region, and 20per 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 34per cent of farms in the Cairns 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, 26per cent of farms in the region had an EVAO of more than $350000and accounted for an estimated 80per 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, Cairns 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

Farm cash income for Queensland broadacre farms declined from an estimated average of $91210per farm in 2011–12to an average of $89700per farm in 2012–13 (Table 2, Figure4).The decline in average broadacre farm cash income was mainly a consequence of the onset of dry seasonal conditions resulting in reduced crop production, increased turn-off of beef cattle and high expenditure on fodder purchases. Total receipts from sale of beef cattle declined as a result of lower cattle prices, sheep and wool receipts were also lower while crop receipts increased due to large increases in grain prices, relative to prices 2011–12.

Figure4 Real farm cash income, broadacre industries, average per farm

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

Receipts from beef cattle typically account for around 70per cent of average total cash receipts for Queensland broadacre farms. In 2013–14, receipts from beef cattle are projected to decline slightly due to lower average prices received for cattle sold and despite a further increase in turnoff in most regions resulting from the continuation of drought conditions. In addition, production of both winter and summer crops declined in 2013–14reducing crop receipts for Queensland broadacre farms by around 20per cent on average.

Averagetotalcashcostsareprojectedto increase by around 6percentin 2013–14,mainly as a result of a projected increase of around 90per cent in expenditure on fodder and despite a further declinein beef cattle purchase expenditure and lower expenditure on crop production expenses as the area planted to crops was reduced.

Table 2 Financial performance, Queensland broadacre industries, 2011–12to 2013–14, average per farm

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 368520 / 358500 / (4) / 325000
Total cash costs / $ / 277310 / 268800 / (4) / 285000
Farm cash income / $ / 91210 / 89700 / (12) / 39000
Farms with negative farm cash income / % / 30 / 33 / (12) / 33
Farm business profit / $ / 30060 / –4900 / (171) / –77000
Profit at full equity excluding capital appreciation / $ / 77390 / 40000 / (21) / –32000
Farm capital at 30 June a / $ / 4943140 / 4768100 / (3) / na
Farm debt at 30 June b / $ / 576860 / 549900 / (8) / 586000
Equity ratio b / % / 88 / 88 / (1) / na
Rate of returnexcluding capital appreciation c / % / 1.6 / 0.8 / (21) / –0.7
Off-farm income of owner manager and spouse b / $ / 29740 / 23800 / (12) / na

Note: a Excludes leased plant and equipment. b Average per responding farm. c Rate of return to farm capital at 1 July. pABARES preliminary estimates. yABARES provisional estimates. na Not available. RSE Relative standard errors, expressed as a percentage of the estimate provided.
Source: ABARES Australian Agricultural and Grazing Industries Survey

Table 3 Farm cash income of Queensland broadacre farms, by region, 2012–13to 2013–14, average per farm

Region / units / 2012–13p / RSE / 2013–14y
311: Cape York and the Gulf / $ / 84800 / (116) / 55000
312: West and South West / $ / 328000 / (34) / 54000
313: Central North / $ / 122800 / (47) / - 34000
314: Charleville - Longreach / $ / 122100 / (29) / 73000
321: Eastern Darling Downs / $ / 65700 / (33) / 15000
322: Darling Downs and Central Highlands / $ / 115900 / (15) / 45000
331: South Queensland Coastal / $ / 17000 / (57) / 50000
332: North Queensland Coastal / $ / 18100 / (82) / 49000

Note: 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

Farmcashincomeforbroadacrefarmsin Queensland isprojectedtodeclineto average $39000per farm; this is the lowest average farm cash income recorded for Queensland broadacre farms in the 37years the AAGIS survey has operated and around half the ten-year averageto2012–13.

Reductions in beef cattle numbers and in grain and fodder stocks are expected to result in a further decline in farm business profit, from a loss of $4900in 2012–13to a loss of $77000in 2013–14.

Average farm cash incomes are projected to decline in all regions of Queensland in 2013–14except coastal regions. As cattle numbers reduce, business profit is also expected to be negative in all regions in 2013–14, except for Cape York and the Gulf of Carpentaria (Map 2).

Map 2 Australian broadacre zones and regions

Performance of grains industry farms—Queensland

Farm cash receipts increased, on average, for Queensland grains industry farms in 2012–13as a result of higher grain prices and despite reduced production of summer and winter grain, oilseed and pulse crops. Average farm cash income for grains industry farms in Queensland increased to around $179000per farm in 2012–13, around double the industry average for the previous 10years (Figure 5).

In 2013-14, production of both winter and summer crops is estimated to have declined by around one quarter and with only a small increase in grain prices total crop receipts are estimated to have declined by around 15per cent on average. The reduction in crop receipts is expected to be only partly offset by reduced expenditure on fertiliser, fuel and grain marketing costs and labour costs due to the reduced area planted to crops and reductions in expenditure on repairs and maintenance compared with 2012–13. Farm cash income is projected to decline to average just $32000per farm, the lowest farm cash income since 2006–07when drought also severely reduced incomes for Queensland grains industry farms.

In comparison, farm cash incomes for grains farms nationally are projected to increase to a near record in 2013-14, due mainly to very high grain production in South Australia and Western Australia.

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

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

Performance of beef industry farms—Queensland

In 2012–13drier seasonal conditions and high beef cattle numbers in northern Australia resulted in an increase in beef cattle turnoff in Queensland. Lower average sale prices for beef cattle more than offset the increase in turnoff to result in a decline in average beef cattle receipts for Queensland beef industry farms. Expenditure on the purchase of fodder more than doubled while expenditure on beef cattle purchases was sharply reduced.Farm cash income for Queensland beef industry farms declined to average $67000per farm in 2012–13 (Figure 6).

In 2013-14, expansion of drought conditions is projected to lead to a increase of around 10per cent in the average number of cattle sold per farm by Queensland beef industry farms. The increase in turn-off is projected to be mostly offset by a reduction in the average sale price received due largely to the sale of cattle in unfinished condition. The modest increase in farm receipts is projected to be more than offset by increased expenditure on fodder, fuel and freight costs, resulting in average farm cash income for beef industry farms declining to average $39000per farm, or around 50per cent below the average for the previous 10years, in real terms (Figure 6).

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

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

Reduction in beef cattle numbers resulting from increased cattle turnoff will reduce the value of cattle inventories on Queensland beef industry farms. As a consequence, farm business profit for Queensland beef industry farms is projected to decline to average - $73000per farm in 2013–14.

Performance of dairy industry farms— Queensland

In 2012–13, a reduction in average farmgate milk prices received of around 5per cent, combined with a reduction in milk production, and an increase of around 8per cent in total cash costs resulted in farm cash income for Queensland dairy farms declining to average $79200per farm.

In 2013–14, average farm cash incomes are projected to remain low for Queensland dairy farms, averaging around $80000per farm (Table 4, Figure 7) or around 22per cent below the industry average for the previous 10years. Milk production is estimated to have declined and total cash costs to have increased with milk prices for most farms remaining similar to or only slightly above 2013–14prices. Overall, the proportion of dairy farms recording negative farm cash incomes is projected to increase from around 14per cent in 2012-13to around 33per cent in 2013–14.