Over our 50 year history, Planfarm have long understood the value of Benchmarking as a tool to navigate the dynamic challenges of broadacre agriculture. Benchmarking allows a business to evaluate their own production and financial performance through time, while also enabling comparison against industry peers.
By gaining a greater understanding of the strengths and weaknesses of your business, you have the ability to make more informed decisions, which will ultimately improve efficiency, boost profitability and drive growth.
The 2023 Benchmarks combines the data of 463 business, and includes clients of Planfarm, BJW Agribusiness and BusinessAg. As always, we are grateful to the data contributors for their ongoing support of this analysis.
2023 Key Performance Measures
Following consecutive record-breaking years, the combination of below average growing season rainfall in the Northern Wheatbelt, and a hot and dry spring across the state, resulted in a significant drop in WA grain production in 2023. 2023 also proved to be a difficult year for livestock producers, with challenging market conditions leading to a considerable reduction in sheep and cattle prices.
The average business generated $724/ha of farm income, which was 36% lower than 2022, and 8% below the six-year average.
High operating costs were once again a feature of the season, and at $627/ha, were second only to 2022. While increases in the cost of key inputs such as fertiliser, chemical and fuel have been highly publicised in recent years, wages, plant repairs and insurance costs have also continued to rise.
The average business generated an operating profit of just $97/ha in 2023, driven by below average grain yields, lower livestock prices and high operating costs. Fewer than 70% of businesses registered an operating profit, with the average business generating a -1.9% return on capital.
Following a three-year period where high profitability and land value growth resulted in a strengthening of broadacre balance sheets, 2023 saw the equity percentage of the average business ease to 89%. Despite this, broadacre businesses continue to hold a strong equity position, and the industry is well placed to manage poor seasons and retain the capacity for investment in land and machinery.
Over the past decade the average broadacre business has generated a 6.6% return on capital per annum. For those ranked in the top 25%, an 11.4% return on capital has been achieved.
Turn to page 5 of the 2023 Season Benchmark Report to read the in-depth review of the 2023 Season.
