Agriculture in the Gold Coast Region of Queensland, 2014

Agriculture in the Gold Coast region of Queensland, 2014 ABARES

Agriculture in the Gold Coast region of Queensland, 2014

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

About my region 14.28

June 2014

Agriculture in the Gold Coast region of Queensland, 2014 ABARES

© Commonwealth of Australia 2014

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This publication (and any material sourced from it) should be attributed as: ABARES, 2014, Agriculture, in the Gold Coast region of Queensland 2014, About my region 14.28, Canberra, June. CC BY 3.0.

Cataloguing data

ABARES, 2014, Agriculture, in the Gold Coast region of Queensland 2014, About my region 14.28, Canberra, June.

ISSN TBA

ISBN 978-1-74323-120-3

ABARES project 43009

Internet

Agriculture in the Gold Coast region of Queensland 2014 is available at daff.gov.au/abares/publications.

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The Australian Government acting through the Department of Agriculture, Fisheries and Forestry represented by the Australian Bureau of Agricultural and Resource Economics and Sciences, has exercised due care and skill in the preparation and compilation of the information and data in this publication. Notwithstanding, the Department of Agriculture, Fisheries and Forestry, ABARES, its employees and advisers disclaim all liability, including liability for negligence, for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying upon any of the information or data in this publication to the maximum extent permitted by law.

Acknowledgements

This regional profile was updated by Tim Caboche, Peter Martin, Therese Thompson, Sonja Nikolova and Johnny Xu.

Contents

1Regional overview

Employment

2Agriculture sector

Value of agricultural production

Number and type of farms

Farm financial performance—Queensland

References

Tables

Table 1 Number of farms, by industry classification, 2011–12

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

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

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

Table5 Selected estimates, vegetable growers, Queensland

Figures

Figure 1 Employment profile, Gold Coast region, August 2011

Figure 2 Value of agricultural production, Gold Coast region, Queensland, 2011–12

Figure 3 Distribution of farms by estimated value of agricultural operations, Gold Coast region, Queensland, 2011–12

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

Maps

Map 1 Gold Coast region of Queensland

Map 2 Australian broadacre zones and regions

1

Agriculture in the Gold Coast region of Queensland, 2014 ABARES

1Regional overview

The Gold Coast region of Queensland is located in the south-east corner of the state (Map 1). The region comprises the local government areas of Gold Coast and part of Scenic Rim, and the major regional town of Nerang. The region covers a total area of around 1900 square kilometres, or less than 1 per cent of Queensland’s total area, and is home to approximately 507600 people (ABS 2011).

Agricultural land in the Gold Coast region occupies 750 square kilometres, or 39 per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 650 square kilometres, or 34 per cent of the region. The most common land use by area is grazing natural vegetation which occupies 380 square kilometres or 20 per cent of the Gold Coast region.

Map 1Gold Coast region of Queensland

Employment

Australian Bureau of Statistics (ABS) census data from 2011 indicate that around 237700people were employed in the Gold Coast region. The Gold Coast region accounts for 12per cent of total employment in Queensland and 2 per cent of all people employed in the Queensland agriculture, forestry and fishing sector.

Retail trade was the largest employing sector with 29175 people (Figure 1), followed by construction with 26844 people and health care and social assistance with 26358 people. Other important employment sectors in the region were accommodation and food services (22874people) and manufacturing (17957 people).

The agriculture, forestry and fishing sector employed 1055 people, representing less than 1 per cent of the region’s workforce. Of these, 72 per cent were employed in agriculture, 16 per cent in support services for agriculture, forestry and fishing, 5 per cent in fishing, hunting and trapping and 4 per cent in aquaculture. In addition, an estimated 2686 people were employed in food product manufacturing and 1201 people were employed in wood, pulp and paper manufacturing in the region (included in manufacturing sector employment).

Figure 1 Employment profile, Gold Coast region, August 2011

Source: Australian Bureau of Statistics

2Agriculture sector

Value of agricultural production

In 2011–12 the gross value of agricultural production (GVAP) in the Gold Coast region was $58million, which was 1 per cent of the total gross value of agricultural production in Queensland ($10.0billion) for 2011–12. This is the most recent year for which data are available from the ABS on GVAP for this region.

The most important commodity in the Gold Coast region based on the gross value of agricultural production was nurseries, flowers and turf (Figure 2). In 2011–12, nurseries, flowers and turf contributed 34per cent ($19 million) to the value of agricultural production in the region. Sugar cane accounted for 24 per cent ($14 million), eggs contributed 13 per cent ($8 million), and cattle and calves contributed 12 per cent ($7 million).

Figure 2 Value of agricultural production, Gold Coast region, Queensland, 2011–12

Source: Australian Bureau of Statistics

Number and type of farms

ABS data indicate that in 2011–12 there were 373 farms in the Gold Coast region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 1per cent of all farm businesses in Queensland.

Table 1 Number of farms, by industry classification, 2011–12

Industry Classification / Gold Coast region / Queensland
no. / % / no. / %
Beef Cattle / 81 / 22 / 12,529 / 45
Fruit and nuts / 46 / 12 / 1,617 / 6
Other livestock / 34 / 9 / 1,659 / 6
Sugar cane / 31 / 8 / 3,075 / 11
Vegetable / 26 / 7 / 1,076 / 4
Nurseries, Cut Flowers and Turf / 19 / 5 / 425 / 2
Dairy / 13 / 3 / 771 / 3
Other Crop growing / 8 / 2 / 558 / 2
Other / 114 / 31 / 6,368 / 23
Total Agriculture / 372 / 100 / 28,078 / 100

Note: Where the estimated value of agricultural operations is more 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 cattle (81 farms) were the most common, accounting for 22 per cent of all farms in the Gold Coast region, and 1 per cent of all beef cattle farms in Queensland.

A large proportion of farms in the region are small in terms of their business size. Estimated value of agricultural operations (EVAO) is a measure of the value of production from farms and a measure of their business size, and is somewhat similar to turnover. Around 52 per cent of farms in the Gold Coast region had an EVAO of less than $50000 (Figure 3). These farms accounted for only 9 per cent of the total value of agricultural operations in 2011–12. In comparison, 9 per cent of farms in the region had an EVAO of more than $350000 and accounted for an estimated 59per cent of the total value of agricultural operations in the region in 2011–12.

Figure 3 Distribution of farms by estimated value of agricultural operations, Gold Coast region, Queensland, 2011–12

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 agriculture 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 $91210 per farm in 2011–12 to an average of $89700 per 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.

Receipts from beef cattle typically account for around 70 per 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 2013–14 reducing crop receipts for Queensland broadacre farms by around 20 per cent on average.

Averagetotalcashcostsareprojectedto increase by around 6 percentin 2013–14,mainly as a result of a projected increase of around 90 per 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, 2011–12 to 2013–14, average per farm

Performance indicator / units / 2011–12 / 2012–13p / RSE / 2013–14y
Total cash receipts / $ / 368 520 / 358 500 / (4) / 325 000
Total cash costs / $ / 277 310 / 268 800 / (4) / 285 000
Farm cash income / $ / 91 210 / 89 700 / (12) / 39 000
Farms with negative farm cash income / % / 30 / 33 / (12) / 33
Farm business profit / $ / 30 060 / - 4 900 / (171) / - 77 000
Profit at full equity excluding capital appreciation / $ / 77 390 / 40 000 / (21) / - 32 000
Farm capital at 30 June a / $ / 4 943 140 / 4 768 100 / (3) / na
Farm debt at 30 June b / $ / 576 860 / 549 900 / (8) / 586 000
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 / $ / 29 740 / 23 800 / (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.

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

Region / units / 2012–13p / RSE / 2013–14y
311: Cape York and the Gulf / $ / 84 800 / (116) / 55 000
312: West and South West / $ / 328 000 / (34) / 54 000
313: Central North / $ / 122 800 / (47) / - 34 000
314: Charleville - Longreach / $ / 122 100 / (29) / 73 000
321: Eastern Darling Downs / $ / 65 700 / (33) / 15 000
322: Darling Downs and Central Highlands / $ / 115 900 / (15) / 45 000
331: South Queensland Coastal / $ / 17 000 / (57) / 50 000
332: North Queensland Coastal / $ / 18 100 / (82) / 49 000

Note: pABARES preliminary estimates. yABARES provisional estimates. na Not available. Figures in parentheses are standard errors, expressed as a percentage of the estimate provided.

Farmcashincomeforbroadacrefarmsin Queensland isprojectedtodeclineto average $39000per farm; this is the lowest average farm cash income recorded for Queensland broadacre farms in the 37 years 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 $4 900 in 2012–13 to a loss of $77 000 in 2013–14.

Average farm cash incomes are projected to decline in all regions of Queensland in 2013–14 except 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 2012–13 as 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 $179000 per farm in 2012–13, around double the industry average for the previous 10 years (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 15 per 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 $32 000 per farm, the lowest farm cash income since 2006–07 when 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.

Performance of beef industry farms—Queensland

In 2012–13 drier 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 $67000 per farm in 2012–13 (Figure 6).

In 2013-14, expansion of drought conditions is projected to lead to a increase of around 10 per 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 $39000 per farm, or around 50per cent below the average for the previous 10 years, in real terms (Figure 6).

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

Note: p Preliminary estimate. y Provisional estimate.

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 - $73000 per farm in 2013–14.

Performance of dairy industry farms— Queensland

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

In 2013–14, average farm cash incomes are projected to remain low for Queensland dairy farms, averaging around $80000 per farm (Table 4, Figure 7) or around 22 per 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 2013–14 prices. Overall, the proportion of dairy farms recording negative farm cash incomes is projected to increase from around 14 per cent in 2012-13 to around 33 per cent in 2013–14.

Figure 7 Real farm cash income, dairy industry, average per farm