BankWest will be flying the flag at the BankWest shed during the Dowerin GWN Machinery Field Days and launching their new Planfarm BankWest Benchmarks with the results of combined survey of about 500 farmers.
The newly released 2007-2008 Planfarm BankWest Benchmarks, to be launched at the Dowerin GWN Machinery Field Days on the 27 August 2008, show one of the most variable, but positive returns across the state in recent years.
The benchmarks saw Western Australia's 2007 broadacre farm return on capital at 6.08 per cent, compared to the previous five year average of 1.8 per cent, with the top 25 per cent of farms generating a return of 16.05 per cent.
2007 saw mixed results in crop yield across the state, with wheat and lupins below the five year average, while barley and canola were up.
Farm operating costs averaged $203 per hectare, an increase of $17 from the previous year. The 2007 benchmarks do not show the increase in farm input costs that has occurred in 2008.
Key highlights include:
- Farm operating surpluses reflected the variability in the state with the top 25 per cent averaging $397 per effective hectare, more than double the average of $180 per effective hectare and the lower group below zero at $-9 per effective hectare.
- The top 25 per cent of farms achieved return on capital of 16.05 per cent with some individual results far exceeding this. The overall average return on capital was 6.08 per cent.
- The 2007 average gross operating return was $180 per effective hectare and three times the previous year's result of $57 per hectare. This is the highest return in recent memory and an exceptional result considering the portion of the state that was in drought, or near to.
- Debt level average of $377 per effective hectare, an increase of $15 from last year.
The best performing region in the state was the Great Southern region with medium rainfall (325 to 450mm). Cropping income increased from 60 per cent to 80 per cent of total farm income in this region with yields above the five year average combining with strong prices. For average return on capital across all regions see graph below.
Planfarm Managing Director Greg Kirk said regions fortunate enough to have received adequate rainfall were able to capitalise on above average yields with exceptionally high prices and what were, at the time, relatively low input costs.
"The net effect was that many of the businesses in these regions achieved record levels of profitability and with this, high levels of optimism," Mr Kirk said.
"This was in contrast to the Northern wheatbelt and much of the northern fringe of the central wheatbelt that experienced another very dry year with exceptional circumstances assistance being made available to drought stricken areas."
BankWest Rural and Regional State Manager Michael Kettle said the 2007 benchmarks produced some interesting results and are a positive uptake on the previous year.
"The 2007 results are heartening and it's good to see that some areas have improved compared with the previous year and can help farmers see how their business is performing compared to the rest of the state," he said.
BankWest is also launching its new Flexi-Protect at the field days. Flexi-Protect has the benefit of flexibility, future planning, budgeting and profitability, with the ability to change interest rate types to better meet agribusiness needs.
The product allows the customer to agree on maximum rates to protect against interest rate increases, gives access to finance, allows consolidation of business debts and also forecasts budgets more accurately so future interest rate costs can be managed.
The Planfarm 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. The survey includes data from clients of Planfarm, BankWest and agribusiness consultancy Bedbrook Johnston Williams.
For more information and a copy of the full report, visit BankWest Rural and Regional Banking at the BankWest shed or call them on 1800 199 535.
