The 2022/23 production season presented producers right across with country with relatively widespread above average spring rainfall after a mixed start to the season in various regions. Producers were also presented with some surprises and challenges with the conflict between Russia and Ukraine commencing and the softening of red meat prices and below average wool prices.
Much like the 2020/21 production season, the 2022/23 production season brought about high commodity prices, particularly for break crops such as canola and above average yields across many regions. This allowed many farm businesses to generate high returns.
The SnapShot combined report collates data from farm businesses regarding the previous production year’ performance and focuses on key profit areas. This report included 127 data sets, of which saw the large majority generate high and even record-breaking levels of profit.
The 2022/23 season allowed generally good starts to most cropping and pasture programs with drier starts in some regions. The season was then finished off with a widespread wet spring. The hay season was particularly challenging due to the wet spring, but above average and record setting crop yields across the crop types and decile 9 commodity prices allowed many businesses to capitalise financially.
The biggest surprise to come out of the 2022/23 report is the performance of the Upper Eyre Peninsula and Riverland. All businesses included from the Riverland and more than 50% of businesses from the Upper Eyre Peninsula achieved results that saw them part of the top 20% of producers by return on equity for that particular season.
The report also showed which regions achieved results that placed them among the top 20% of producers. The ability to grow high value crop types and rainfall reliability are the key things driving inclusion into the top 20%. In 2022/23, businesses in the Upper Eyre Peninsula, Lower North, Yorke Peninsula and Southern Mallee accounted for the majority of businesses among the top 20%.
As in recent years, many businesses once again saw an increase in net worth through increasing land values throughout agricultural districts. Part of this is due to the average return on equity figure across the dataset being 7.3%, which is better than the current interest rates. It can also be explained by the level of confidence in the agriculture sector at present.
The positive results achieved not only in 2022/23 but also in 2020/21 across the majority of benchmarked businesses have led to numerous opportunities for growth discussions, both internally and externally. By approaching things with the mantra “you can’t manage what you don’t measure”, the combined report results and associated discussion has assisted in shaping machinery purchase, land purchase or succession discussions.
The 2022/23 SnapShot combined report is the 14th combined report published by Pinion Advisory. The report is available to purchase, with insights into businesses across South Australia and Victoria.
Interested in a benchmarking your business in 2024? Get in touch with your agribusiness consultant or Pinion Advisory (1300 746 466) to request your input sheets.