Western Australia's farm financial performance was 0.6 per cent higher than 2004-2005's five year low of 1.4 per cent, the 2005-2006 BankWest Benchmarks have shown.
While this figure is not a big year-on-year increase, it does point to increases in average yields across the state in 2005. Wheat yields increased 0.27 tonnes per hectare from the 2004 season, to 2.00 tonne per hectare.
BankWest Rural and Regional State Manager WA Jim Watson said the increase in wheat yields came despite widespread frosts.
"While frost hit individual areas and properties hard, our survey showed that across the state we had an increase in average yields compared to the season before," Mr Watson said.
Mr Watson said however the return to capital was lower than the five year average of 3 per cent.
"The return to capital, before capital appreciation, was 2 per cent for the average farm in 2005," he said.
"This indicates that lower grain prices in 2005 and higher input costs, particularly fuel and fertilizer, weighed heavily on farm profitability."
"Most farmers have been careful with their expenditure and farm input costs declined $2 per effective hectare from the 2004 operating costs of $194 per hectare," he said. "Cost control was a priority throughout 2005 after the 2004 season where many farms experienced lower yields."
Other key findings from the 2005-2006 BankWest Benchmarks Survey include:
* Operating costs as a percentage of farm income declined to 75 per cent, still slightly higher than the 5 year average in our survey of 72 per cent.
*· Farm businesses operating profit increased $5 per effective ha from last year with a state average of $49 per hectare. This figure is still however, lower than the 5 year state average.
"Operating profit was obviously affected by the lower grain payments from the 2004 harvest that impacted during 2005," Mr Watson said.
The BankWest Benchmarks Survey is the largest of its kind in Australia and provides valuable information about the financial and production performance of West Australian broad-acre farm businesses.
BankWest has been recording and analysing the performance of West Australian farms since the early 1960s. Approximately 500 farm businesses from seven regions and 20 districts in the WA sheep-wheatbelt participate in the annual survey.
Full details of how farm businesses really shaped up in 2005-2006 will be available at the Dowerin GWN Field Days from 29 August - 31 August 2006.
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