Farm incomes to tumble as drier conditions take hold

Drier conditions combined with lower prices will see farm incomes tumble this financial year, according to the nation’s agricultural forecaster. The Australian Bureau of Agricultural and Resource Economics and Sciences is forecasting broadacre farm incomes will fall by 41 per cent in 2023/24 after two record years. That will see the average farm cash income for broadacre farms drop to $197,000 per farm in 2023/24, representing a fall in incomes back to levels seen three years ago. “Livestock farms will be affected by large decreases in prices for beef cattle and sheep, with sheep farm incomes forecast to be well below average,” ABARES executive director Jared Greenville said on Thursday. “We are expecting incomes well below the long-term average in parts of northern New South Wales and southern Queensland and the northern parts of the Western Australian cropping zone, mainly due to drier conditions resulting in lower crop yields. “Incomes are also forecast to be well below average in parts of southern Victoria and South Australia, as well as parts of Tasmania and Western Australia, due to a combination of dry conditions and declining sheep, lamb, and wool prices.” Sheep prices have fallen dramatically in recent months, from around $8 a kilogram for lamb sold in Australian supermarkets at the start of the year to $4.60 on Thursday. That’s a loss of around 40 per cent for sheep producers. Cattle prices have also fallen domestically in the same period, with processors paying $4.26 a kilo in January compared to $2.26 a kilo on Thursday, a drop of 45 per cent. Ripley Atkinson from Meat and Livestock Australia says the drop in cattle prices represents a loss of around $1000 per animal for producers. Mr Atkinson says the price drops can be blamed on a recent boost in supply combined with a loss of confidence from livestock buyers. “The past three previous years across large parts of Australia’s livestock producing regions has seen excellent seasonal conditions, and Australian farmers have retained their animals on farm to rebuild their numbers.” “What we’re now seeing as a result of that, is higher supplies of stock particularly sheep and lambs, come to market,” he says. Quarterly updates on farm performances are now being provided by ABARES, which links farm production with seasonal weather forecasts. “This is a significant step forward from the forecast we have traditionally provided once a year,” Dr Greenville says. The next update is due in December.