BankWest ag survey shows tough year for farmers
(28 August 2007 – Australia) BankWest has released its Benchmarks Survey for 2006 and 2007, which reveals how deeply the harsh drought in Western Australia over the past year has affected the state’s rural and regional areas.
BankWest Rural and Regional state manager, Jim Watson, said the survey confirmed that it had been a difficult year for farmers, and that 2007 was looking similar.
However, he said higher grain prices could make a significant difference at sale time.
The survey found that farmers cut operating costs for the second year in a row. Costs fell from the 2004 high of A$194 per hectare to A$186 per hectare.
Costs increased to 86 percent of farm income, the highest level recorded since 2000.
The state average operating profit farm businesses was A$31 per hectare, a fall of A$18 per effective hectare compared with last year.
Farm debt increased 19 percent while reported total assets increased seven percent, contributing to a decline in farm equity from 82 percent to 80 percent.
The top 25 percent of farms bucked the trend, however, achieving a return on capital of 7.1 percent, compared with the state average of –0.9 percent; an operating return of A$113 per hectare, which was A$82 higher than the average; and an operating cost of 58 percent of income, compared with the average of 86 percent.
Watson said it was important to remember that drought was cyclical and that the bank was confident about WA’s agricultural sector.
However, he said higher grain prices could make a significant difference at sale time.
The survey found that farmers cut operating costs for the second year in a row. Costs fell from the 2004 high of A$194 per hectare to A$186 per hectare.
Costs increased to 86 percent of farm income, the highest level recorded since 2000.
The state average operating profit farm businesses was A$31 per hectare, a fall of A$18 per effective hectare compared with last year.
Farm debt increased 19 percent while reported total assets increased seven percent, contributing to a decline in farm equity from 82 percent to 80 percent.
The top 25 percent of farms bucked the trend, however, achieving a return on capital of 7.1 percent, compared with the state average of –0.9 percent; an operating return of A$113 per hectare, which was A$82 higher than the average; and an operating cost of 58 percent of income, compared with the average of 86 percent.
Watson said it was important to remember that drought was cyclical and that the bank was confident about WA’s agricultural sector.
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