ABARES survey reveals financial performance of Australian cane farms

Date Posted

24 March, 2015

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The financial performance of Australia’s sugarcane farming businesses has been studied in a new survey conducted by ABARES and commissioned by Sugar Research Australia (SRA) and the Queensland Department of Agriculture and Fisheries (DAF).

It is the first in-depth survey that has studied productivity and profitability of the Australian sugarcane industry since 2008. It has surveyed small, medium and large sized farms in terms of production (tonnes) and area (hectares).

SRA Executive Manager for Investor Relations, Leigh Clement, said that the survey provided a good snapshot of sugarcane farm performance, taking into account a range of factors such as farm location, size, and inputs such as water and electricity.

“The survey involved in-depth face-to-face interviews with more than 170 farmers in early 2015, looking at financial performance in 2013/14,” Ms Clement said. “We know that the survey was conducted in a period of relatively low production due to the environmental impacts associated with several bad years of floods and cyclones, and the survey report recognises that.

“However, it showed that despite the environmental and economic challenges that the industry faced, the top ranked 25 percent of sugarcane farm businesses had an average rate of return of 4.5 percent in 2013/14, not including capital growth in their land.

“The survey also highlighted the challenges faced by the smaller and less profitable farms, with some of these enterprises transitioning away from sugarcane production or to retirement. The bottom 25 percent of farms had a negative 9 percent rate of return, relying on off-farm income to survive.”
By comparison, a similar recent survey of horticultural producers by ABARES revealed the top-performing horticultural farmers achieved a 10 percent rate of return and the low-performing farms had a negative 11 percent return.

“This data gives us a baseline to measure future trends regarding sugarcane farmers’ return on investment, as well as a way of measuring the rate of practice change,” Ms Clement said.

Ms Clement said the survey already indicated a solid rate of positive change with management practices among the industry’s farmers, with 47 percent having made changes to farming practices, techniques or methods in the two years to 2015.

“It showed that the number one reason for practice change was because of research and development outcomes,” she said. “The survey showed that there is a strong current of innovation in the Australian sugarcane industry, and it also provides useful data for organisations such as SRA to target our investment in a way that benefits sugarcane growers and millers.”

The survey will be used for a range of purposes, including to help guide industry investment in research, development and extension through SRA. It will also compliment SRA’s existing annual grower survey, and both of these surveys will be used to inform SRA performance reports.

The full survey is available online here.
Media contact: SRA Manager Communications Brad Pfeffer 0419 175 815.

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