Agriculture and Fisheries in the Outback region of Queensland, 2014 ABARES
Agriculture and Fisheries in the Outback region of Queensland, 2014
Research by the Australian Bureau of Agricultural
and Resource Economics and Sciences
About my region 14.30
June 2014
Agriculture and Fisheries in the Outback region of Queensland, 2014 ABARES
© Commonwealth of Australia 2014
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Cataloguing data
ABARES 2014, Agriculture, Fisheries and Forestry in the Outback region of Queensland, About my region 14.30, Canberra, June.
ISSN TBA
ISBN 978-1-74323-091-6
ABARES project 43009
Internet
Agriculture and Fisheries in the Outback region of Queensland 2014 is available at daff.gov.au/abares/publications.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)
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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, Johnny Xu and Kasia Mazur.
Contents
1Regional overview
Employment
2Agriculture sector
Value of agricultural production
Number and type of farms
Farm financial performance—Queensland
3Fisheries sector
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, Queensland-Outback region, August 2011
Figure 2 Value of agricultural production, Queensland-Outback region, 2011–12
Figure 3 Distribution of farms by estimated value of agricultural operations, Queensland Outback, 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 Queensland-Outback region of Queensland
Map 2 Australian broadacre zones and regions
1
Agriculture and Fisheries in the Outback region of Queensland, 2014 ABARES
1Regional overview
The Queensland-Outback region is located in the west of the state, and spans from the tip of Cape York to the borders of the Northern Territory and New South Wales (Map 1). The region comprises 34 local government areas. The region covers a total area of around 1million square kilometres, or 68 per cent of Queensland’s total area, and is home to approximately 82900people (ABS 2011).
Agricultural land in the Queensland-Outback region occupies 1 044 290 square kilometres, or 88per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 123 750 square kilometres, or 10 per cent of the region. The most common land use by area is grazing natural vegetation which occupies 993 190 square kilometres or 84 per cent of the Queensland-Outback region.
Map 1Queensland-Outback region of Queensland
Employment
Australian Bureau of Statistics (ABS) census data from 2011 indicate that around 37400 people were employed in the Queensland-Outback region. The Queensland-Outback region accounts for 2per cent of total employment in Queensland and 9 per cent of all people employed in the Queensland agriculture, forestry and fishing sector.
Agriculture, forestry and fishing was the largest employing sector with 5127 people (Figure 1) representing 14 per cent of the region’s workforce. Of these, 91 per cent were employed in agriculture, 5 per cent were employed in support services for the agriculture, forestry and fishing sector, and 2 per cent were employed in fishing, hunting and trapping. In addition, an estimated 312 people were employed in food product manufacturing and 28 people were employed in wood, pulp and paper manufacturing in the region (included in manufacturing sector employment).
Mining was the second largest employing sector (4912 people), followed by public administration and safety (4397 people). Other important employment sectors in the region were health care and social assistance (3679 people), education and training (2928 people), and retail trade (2650 people).
Figure 1 Employment profile, Queensland-Outback 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 Queensland-Outback region was $1.7 billion, which was 16 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 agricultural commodity in the Queensland-Outback region based on the gross value of agricultural production was cattle and calves (Figure 2). In 2011–12, cattle and calves contributed 86 per cent ($1.4 billion) to the value of agricultural production in the region. Wool accounted for 5 per cent ($75 million) and fruit contributed 3 per cent ($57 million), with the main crops being mangoes ($24 million), bananas ($5 million), and avocados ($4 million).
Figure 2 Value of agricultural production, Queensland-Outback region, 2011–12
Source: Australian Bureau of Statistics
Number and type of farms
ABS data indicate that in 2011–12 there were 2457 farms in the Queensland-Outback region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 9per cent of all farm businesses in Queensland.
Table 1Number of farms, by industry classification, 2011–12
Industry Classification / Queensland - Outback region / Queenslandno. / % / no. / %
Beef Cattle / 1,638 / 67 / 12,529 / 45
Mixed livestock / 218 / 9 / 364 / 1
Fruit and nuts / 159 / 6 / 1,617 / 6
Other livestock / 94 / 4 / 1,659 / 6
Sheep / 69 / 3 / 261 / 1
Other Crop growing / 45 / 2 / 558 / 2
Other / 233 / 9 / 11,091 / 40
Total Agriculture / 2,456 / 100 / 28,079 / 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 (1638 farms) were the most common, accounting for 67 per cent of all farms in the Queensland-Outback region, and 13 per cent of all beef cattle farms in Queensland.
A significant 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 55 per cent of farms in the Queensland-Outback region had an EVAO of less than $350000 (Figure 3). These farms accounted for only 13 per cent of the total value of agricultural operations in 2011–12. In comparison, 45 per cent of farms in the region had an EVAO of more than $350000 and accounted for an estimated 87per 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, Queensland Outback, 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 / 2013–14yTotal 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 / 2013–14y311: 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