Australian Dairy: financial performance of dairy farms, 2011-12 to 2013-14

Overview
The results presented in this report cover trends in farm financial performance of Australian dairy farms up to and including the 2013-14 financial year. The report includes analysis of changes in farm financial performance, debt and equity. More detailed analysis by farm size highlights differences in farm physical and financial performance across the industry.

Key Issues
• In 2013-14, average farm cash incomes are estimated to have rebounded strongly from the lows of the previous year with large increases in milk prices for dairy farmers in southern New South Wales, South Australia, Victoria and Tasmania, and smaller increases for producers in other states and regions. As a consequence, average farm cash income of Australian dairy farms is estimated to have increased to $129 000 in 2013-14, around 29 per cent above the 10-year average to 2012-13. • Over the 10 years to 2013-14 the average rate of return to capital (excluding capital appreciation for Australian dairy farms was 2.1 per cent. The average rate of return (excluding capital appreciation) declined in 2012-13 to an estimated 0.9 per cent as farm incomes fell, then increased to 3.1 per cent in 2013-14. • In 2012-13 average farm debt rose by around 9 per cent as a result of increased working capital debt that was largely used to purchase fodder because of dry seasonal conditions. Higher farm incomes and improved seasonal conditions in 2013-14 meant there was reduced need for working capital and many farmers reduced this component of their debt.