2014-2015 Planfarm Bankwest Benchmarks
21 August 2015
The Planfarm Bankwest Benchmarks report is the largest of its kind in Australia. It provides valuable information about the financial and production performance of Western Australian broad acre farm businesses.
Over many decades, the agricultural industry has underpinned the Western Australian economy and the strength of this sector is clearly shown throughout this year’s Planfarm Bankwest Benchmarks.
Compiled from over 550 Western Australian broad acre farming clients of Planfarm, Bankwest, Bedbrook Johnston Williams, Business Ag and Ag Asset the Planfarm Bankwest Benchmarks allows farm businesses to compare their financial and production performance to other farmers in their district and region.
The results are published annually to:
- Show that with good management there can be very good returns generated in agriculture
- Help individual farmers understand their businesses better and identify how they can improve their own performance
- Encourage farmers and industry to challenge the ‘norm’
- Lift the profile of agriculture
Western Australia's farm businesses are in strong financial shape, buoyed by good seasons, higher farm equity levels and stable land values.
Bankwest Rural and Regional Banking State Manager, John Sgambelluri, said the Planfarm Bankwest Benchmarks showed average farm equity had reached 80 per cent, indicating a turnaround for the grain belt after a run of tough seasons. He said it was continuing to improve to a level indicative of a strong financial position.
It is rare for the whole state to achieve an outstanding result in a single year and 2014 was no different. The best performing regions were located in a diagonal band through the Central Wheatbelt, stretching from Northam to Jerramungup. The southern regions generally experienced a very good season, while the north of the state was below average.
The net effect over the whole state was an average season in terms of profitability - a little better than average with total state grain receivals of 14.5mmt.
Planfarm consultant Graeme McConnell said a high level of management skill was consistently required in order to maintain a ranking in the top 25 per cent of farm businesses.
The top 25 per cent generate double the profit of the average performers. The average farm business is still generating very good returns, where the bottom 25 per cent hover around breakeven.
For two regions last year - the northern high and medium rainfall regions - the six-year average wheat price achieved by the top 25 per cent was less than what was achieved by the region's average.
This could suggest some of the top 25 per cent of performers were outstanding in terms of production, but were perhaps less effective marketers of their grain.