2011 Planfarm Bankwest Benchmarks Survey

media releases

11 August 2011

The Planfarm Bankwest Benchmarks Survey is the largest and most comprehensive annual farm performance survey of its kind in Australia. The Planfarm Bankwest Benchmarks provide valuable information about the financial and production performance of approximately 500 Western Australian broad acre farm businesses. 

Commenting on the 2011 Planfarm Bankwest Benchmark Survey, Peter Rowe, Bankwest Agricultural Economist said, “We are proud to launch the results of our 2010/11 Benchmarks study. It has been an ongoing research activity with Bankwest since the 1970s and offers the agricultural sector a valuable insight into the financial performance of the industry.”

“2010 was a year where Western Australia’s agricultural areas performance was divided. The North showed relatively good results, while the South, after a reasonable start, succumbed to very dry conditions from August through to harvest and consequently results were poor.”

“For much of the Southern region, the poor 2010 result compounded the issues created in the 2008 and 2009 seasons and has left many businesses at the limit of their financial capacity to keep farming.”

“Last year was the first year where rainfall was the defining factor for performance. Rainfall has not been the differentiating point for performance in past years, but 2010 demonstrated there is a minimum growing season rainfall around 100mm that farms need to receive to produce a crop. Unfortunately many farms didn’t receive that last year,” said Mr Rowe.

KEY FINDINGS FROM THE 2010/11 BANKWEST BENCHMARK SURVEY
• Return on equity was negative in 2010 at -1.0%, the third lowest result over the last 15 years. In our recent records, only 2000 at -2.2% and 2009 at -1.4% were lower.

• Average equity in the group reduced by 2.8% through the year to 71.9%, reflecting increased debts from trading losses but may not be the full picture as land prices were largely held steady during the year.

• Following the losses in 2009, finance costs increased in 2010 by $8/ha to an average of $64/ha.

• Grain pricing in the 2010 was something of a saving grace. Most budgets were completed with prices around the level of $220/t, although by harvest they were above $320/t, with noodles peaking around $515/t

• Despite the poor season, farm operating surpluses grew from $42/ha in 2009 to $59/ha in 2010, highlighting the conditions in the 2009.  While average farm incomes fell slightly, the reduction was more than offset by a reduction in operating costs of 16% ($46) to $249/ha. As mentioned above, there was a vast difference between the North and South results.

• Sheep income continued to improve in 2010. The average sheep sales price has increased from $87/hd to $97/hd, an increase of over 10% year on year. It is this price signal that appears to have stabilised the sheep flock numbers despite the trying seasonal conditions.

• The improved sheep economics and lower grain yields has led to grain income as a percentage farm income dropping from 76% to 68% and sheep income as a proportion of farm income increasing from 17% to 23%.

• Small differences in production as a result of greater efficiency of the use of rainfall and inputs is translating to between 1.5 and 2 times the level of profit for the top 25% compared to the average for every region.

• The volatility of farm performance appears to be relatively high across all regions, not just the low rainfall zones, and therefore see an increased need for greater consideration of this in the management of regions that have previously been considered ‘stable’. 

Full details on how farm businesses performed will be available to the public at the Dowerin GWN Field Days, Newdegate Machinery Field Days and Mingenew Lions MidWest Expo at the Bankwest sites. 

This survey is a result of the combined efforts of Bankwest Rural and Regional, Planfarm and consultants Bedbrook Johnston Williams.  The broad data we are able to use allows us a greater depth to our analysis and improves the geographical coverage of the survey.

For additional copies of this report, or more information about the products and services offered by Planfarm Pty Ltd and Bankwest Agribusiness Centre, our contact details are:

Planfarm Pty Ltd  
22/350 Cambridge Street  
Wembley WA     
Ph (08) 9284 1044
Fax (08) 9284 1244
graeme@planfarm.com.au
Bankwest Agribusiness Centre
Level 1, 1215 Hay St
West Perth WA        
(08) 9420 5179
(08) 9420 5199
peter.rowe@bankwest.com.au








Background

The Planfarm Bankwest Benchmarks Survey is the largest of its kind in Australia and provides valuable information about the financial and production performance of Western Australian broad-acre farm businesses. The survey includes data from clients of Planfarm and Bankwest and delivers high quality and highly valued information to agribusiness across the wheat-sheep belt of WA. 

The Planfarm Bankwest Benchmarks allow farm businesses to compare their financial and production performance to other farmers in their district and region.  This allows farmers to compare the strengths and weaknesses of their operations and, in this respect, help improve farm profitability.

There is often a significant difference between the top performing farms and other farms.  The Planfarm Bankwest Benchmarks help to identify the factors that help lift the top performing farms above the others.

About Bankwest:
Bankwest
 provides personal and business banking solutions for more than one million retail and business customers across Australia. Bankwest customers enjoy access to an extensive network of stores and business centres, direct and third party distribution channels, agencies and electronic banking facilities, as well as 24-hour telephone and internet banking. For two consecutive years, Bankwest has been chosen as the AFR Smart Investor Blue Ribbon 2010 & 2011 Bank of the Year. Bankwest is a wholly owned subsidiary of the Commonwealth Bank of Australia Group.

 

all news articles

media enquiries

all journalist enquiries should be directed to:

general enquiries

business enquiries

Bankwest SWIFT code: BKWAAU6P | Find your BSB by logging into Online Banking.

© 2016 Copyright Bankwest, a division of Commonwealth Bank of Australia (Bankwest) ABN 48 123 123 124 AFSL / Australian credit licence 234945. All rights reserved. To use this Website, you are required to read the Financial Services Guide (which you agree to be provided by accessing the link). Bankwest is a division of Commonwealth Bank of Australia, which is the product issuer unless otherwise stated. Rates stated are subject to change without notice. Any advice given does not take into account your objectives, financial situation or needs so please consider whether it is appropriate for you. For deposit and payment products, please ensure you read and consider the Product Disclosure Statement (which you agree to be provided through this link) before making any decision about the product(s). For lending products, lending criteria and fees and charges apply. Terms and conditions apply and are available on request.