OVERALL SUMMARY

Farm Survey 2023

The median farm is 6,200 stock units. For comparison purposes, we have assumed the top 20% farm is the same size. In reality the top 20% farm size is 6,500 stock units. Income has increased by $26 per SU from the previous year’s $118 to $144 (+22%). Income = $654/Ha. Farm working expenses increased by $7 to $82 per SU (+9%). Farm working expenses = $385/Ha.

With increased income and an increase in expenses, the farm surplus before debt servicing increased by $16 to $59 per SU (+37%). Farm surplus = $278/Ha.

The median debt loading per stock unit for those properties with debt increased to $266 per SU (+$18/SU). For the median property of 6,200 stock units debt loading is $1,650,000.

The Magic index (Farm Working Expenses plus Interest and Rent compared to gross farm income) for the top 20% of farmers is 57% and the median farm is 68%. A ratio below 75% really allows financial progress to be made because there is sufficient surplus in the business to reinvest and have the ability to repay debt.

The 2022 year was a year of financial progress for the vast majority of farmers.

Characteristics of Top 20% of Farmers:

- Earn more per stock unit from higher production levels and achieve higher value for most classes of livestock. Lambing %, +6% (132% compared to 126%), wool weights +0.60kg/SSU (5.22kg compared to 4.6kg), lamb and hogget price $12/head.

- Higher stocking rate/hectare.

- Spends similar per stock unit and therefore has much better efficiencies of production given higher production and income.

- Spends similar on fertiliser and repairs and maintenance per stock unit.

- Higher debt servicing and lease costs per stock unit ($14/SU but overall lower debt servicing % at 8% of income because of higher income (1% lower).

- Top performing farmers achieve a farm surplus 82% higher than the median farm (before debt servicing) (+$38/SU).

- Pay 12% more tax than the median group.

- The final result after all income and expenses, including personal drawings, capital expenditure and tax is $205,000 higher (+$33/SU) on the same scale of property.

- They pay off more debt and they have more debt per stock unit.

- Taxable income for the top 20% is 125% higher at $461,000 compared to the median taxable income of $205,000.