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Estimates of selected financial aggregates of farm businesses in this section are based on data collected in the annual Australian Agricultural and Grazing Industries Survey (AAGIS) conducted by the Australian Bureau of Agricultural and Resource Economics (ABARE). This collection covers farm businesses engaged in grain growing, sheep and beef farming and beef cattle feedlot operations (Australian and New Zealand Standard Industrial Classification (ANZSIC) group 012, referred to as 'broadacre' industries).
Selected financial performance measures - expressed as annual averages per farm - for all broadacre farm businesses for the years 1997-98 to 2001-02 are shown in table 14.7 and graphs 14.8, 14.9 and 14.10.
Higher prices for most major broadacre commodities, including wheat, wool and beef, contributed to a large increase in profits for the majority of Australia's broadacre farms in 2001-02. Overall, average total cash receipts for broadacre farms are estimated to have increased by 15% in 2001-02, following a similar increase from the previous year. Average total cash costs for broadacre farms increased by around 9% in 2001-02. A substantial portion of the increase was the result of higher prices for farm inputs.
Average cash income for the broadacre farms as a group rose by 29% to $92,600 in 2001-02 (graph 14.8), among the highest recorded level in the past 26 years (the period over which ABARE has been conducting the AAGIS). Farm cash income is a measure of the cash funds available for farm investment and consumption after paying all costs incurred in production, including interest payments, but excluding capital payments and payments to family workers. It is a short-term measure of farm income because it takes no account of depreciation on assets.
Farm business profits averaged $36,400 in 2001-02 (graph 14.9), the highest recorded in the past 26 years. Farm business profit is a longer term measure of the profitability of farms because it takes account of depreciation and inventory changes.
For the broadacre industries as a group, rate of return averaged 3.4% in 2001-02 (graph 14.10), the highest rate of return recorded since the early-1980s.