Benchmarking data available for grain growers

Story Added : 20th April 2011

A Grains Research and Development Corporation-commissioned study has established physical and financial performance benchmarks for each grain-producing agroecological zone and provided insights into how the top performing farms have achieved their enterprise success.

Undertaken by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the study was commissioned by GRDC to provide growers and their advisers with an enhanced awareness of how their farms are performing.

GRDC project manager Zoltan Lukacs said 13 agroecological zone-specific reports had been released from the study, offering data and information of relevance and use to growers and farm consultants.

“The reports include data for specialist grain-producing farms as well as mixed enterprises combining grain and livestock production, and offer a large range of benchmarks, falling into three categories – whole-of-farm, enterprise-specific and socio-economic,” Dr Lukacs said.

“Whole-of-farm benchmarks include farm size, rainfall, land use intensity, enterprise mix, rate of return and a range of farm financial performance variables.

“Enterprise-specific benchmarks include grain yields, livestock reproduction rates, wool production and the average price received for each commodity produced, while socio-economic benchmarks cover the age, education and off-farm employment of the operator and spouse.

“Not only can growers see how their farms compare with others in their region, but they can obtain a better understanding of the key factors driving the results of the better performing farms,” Dr Lukacs said.

“The analysis found that the main factors driving the superior financial performance of the top performing grain producing farms differed between the specialist and mixed enterprise farms within each zone as well as between the zones.

“However, there were some common themes evident in the analysis of the top performing farms versus the sector averages across the different zones.”

In general, the top performing farms in both the specialist and mixed enterprise sectors of the grain industry were:

more intensively run farms

realised higher profitability by enhancing the farm’s efficiency and productivity over time

more effective in converting rainfall to output

the enterprise mix changed more rapidly in response to market signals, seasonal conditions and the development of new crop cultivars

“The top performing farms were consistently able to reduce costs relative to the value of farm output, leading to greater profitability,” Dr Lukacs said.

"They spent less on farm inputs to produce each dollar of output and there was a trend on these farms towards lower input costs per dollar of output over time."

The analysis also found that many farm operators have expanded their farm area by purchasing more land, particularly over the past decade.

“Overall, the analysis presented in these reports indicates that the superior farm financial performance realised by the top performing farms in most zones appears to have been driven by the scale effect of increasing farm size as well as greater improvements in farm productivity and efficiency.”

Each report comprises four main sections, starting with a brief discussion of the value of broadacre agriculture in the respective agroecological zone. This is followed by a discussion of farm financial performance (covering farm cash income, farm business profit and rate of return) and socio-economic benchmarks. The main body of the reports contains a detailed discussion of the main performance benchmarks of the top performing farms in the zone.

The reports for each zone are available via the GRDC website at www.grdc.com.au/abaresreports