Beef cattle producers can expect an increase in projected farm cash incomes in 2010-11 as a result of improved seasonal conditions according to a new report released today by ABARES.

The Australian beef: Financial performance of beef cattle producing farms, 2008-09 to 2010-11, shows well-above average rainfall has resulted in abundant pasture growth across much of Australia’s agricultural regions and has enabled producers to continue to rebuild cattle numbers in both northern and southern Australia, which will help to expand future beef production.

The better seasonal conditions are also expected to reduce expenditure on fodder and lower farm cash costs.

“Limited availability of stock and high saleyard prices are expected to result in reduced expenditure on beef cattle purchases in 2010-11 compared with 2009-10,” ABARES Deputy Executive Director Paul Morris said.

Despite higher beef cattle prices, the reduction in beef cattle turnoff in 2010-11 is expected to result in little change in receipts from beef cattle compared to the previous year. However, lower overall farm costs are expected to result in higher farm cash incomes.

“Average farm cash income for beef cattle producers in northern Australia is forecast to increase from $39,120 in 2009-10 to $60,100 per farm in 2010-11,” Mr Morris said.

“Farm cash income for southern Australian beef cattle producers is also forecast to increase, from $57,660 in 2009-10 to an average of $66,200 per farm in 2010-11. The smaller increase expected in southern Australia is largely due to herd rebuilding commencing later than in the north.”

Cattle producers have maintained a high level of capital investment over the past decade, with the largest share dedicated to purchasing land. New investment by beef cattle producers averaged $76,000 per farm in 2009-10 and in southern Australia was significantly above the average for the previous 10 years.

Overall, beef cattle producers had strong farm equity at 30 June 2010. Based on survey results, around two-thirds of beef producers were in a strong financial position with high equity and positive farm cash incomes in 2009-10. Only 4 per cent of beef cattle producers are estimated to have had low equity and negative farm cash income.