THE top 25 per cent of Australian cane farms had an average rate of return of 4.5pc in 2013-14, while the bottom 25pc of farms generated a negative 9pc, relying on off-farm income to survive.
The financial performance of Australia’s cane farms is part of a new survey conducted by ABARES and commissioned by Sugar Research Australia (SRA) and the Queensland Department of Agriculture and Fisheries (DAF).
SRA executive manager for investor relations, Leigh Clement, said that the survey provides 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 4.5pc 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 25pc of farms had a negative 9pc rate of return, relying on off-farm income to survive.”
It is the first in-depth survey that has studied productivity and profitability of the cane industry since 2008. It has surveyed small, medium and large sized farms in terms of tonnes produced and hectares in production.
By comparison, a similar recent survey of horticultural producers by ABARES revealed the top-performing horticultural farmers achieved a 10pc rate of return and the low-performing farms had a negative 11pc 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 47pc 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, she said. It will also compliment SRA’s existing annual grower survey, and both of these surveys will be used to inform SRA performance reports.
