Broad­acre farm­ers en­joy solid re­turns

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WA’s broad­acre farm­ers recorded an av­er­age re­turn on cap­i­tal of 4.2 per cent last year, in­di­cat­ing the State’s farm­ing in­dus­try re­mained strong and vi­able in the face of wide­spread frosts and weak grain prices.

Al­though the av­er­age re­turn on cap­i­tal for the 12 months was down from 4.7 per cent the pre­vi­ous year, it com­pared favourably to the av­er­age re­turn for Aus­tralian eq­ui­ties of 2 per cent, and de­clines in com­mer­cial and res­i­den­tial prop­erty over the same pe­riod to the end of Fe­bru­ary.

The Plan­farm Bankwest Bench­marks anal­y­sis — the most com­pre­hen­sive an­nual sur­vey of farm per­for­mance in WA — was based on the fi­nan­cial records of 550 farm busi­nesses across WA’s Wheat­belt.

Dur­ing 2016, the av­er­age WA farm made an op­er­at­ing profit of $667,815 — equiv­a­lent to $178 a hectare — from a turnover of $2,203,904.

This was marginally be­low the $680,227 op­er­at­ing profit from turnover of $2,124,873 in the pre­vi­ous year.

Plan­farm is a WA firm of man­age­ment con­sul­tants that started in 1974 to in­tro­duce modern busi­ness man­age­ment skills to the farm­ing com­mu­nity.

It gath­ers reg­u­lar data about farm per­for­mance from 550 of its clients who run farms through­out WA’s agri­cul­tural re­gions.

Plan­farm di­rec­tor Graeme McConnell said while farm busi­nesses in the anal­y­sis were dom­i­nated by crop­ping, sheep and cat­tle had also per­formed well.

Bankwest WA ru­ral and re­gional bank­ing man­ager Richard Ba­tor said the top 25 per cent of WA’s broad­acre farms achieved an av­er­age re­turn on cap­i­tal of 10.1 per cent.

Mr Ba­tor said 2016 pro­duc­tion was widely ex­pected to be among the high­est in many grow­ers’ ex­pe­ri­ence. The to­tal har­vest de­liv­ered to CBH for the 2016-17 crop­ping year was a record 16.6 mil­lion tonnes.

But ex­treme frosts meant not all fared well and low grain prices put a dampener on re­turns, hence the lower av­er­age re­turn on cap­i­tal.

“The sheer num­ber of frost events in af­fected ar­eas meant that most crops were ex­posed mul­ti­ple times dur­ing the crit­i­cal flow­er­ing pe­riod,” he said.

“Ar­eas less af­fected by frost gen­er­ally pro­duced above av­er­age yields and re­turns.”

The re­port was com­piled from the records of Plan­farm, Bankwest, Bed­brook John­ston Williams, Busi­ness Ag and Ag As­set.

Pic­ture: Danella Be­vis

Jenne Bram­mer and Cally Dupe Plan­farm di­rec­tor Graeme McConnell in Northam this week with the Plan­farm Bankwest Bench­marks re­port 2016-2017.

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