The effect of a drop of up to 70 percent in cattle prices on producer incomes has been underscored in a new report released by ABARES this week.

While the Eastern Young Cattle Indicator only captures a portion of cattle sold in Australia, it is a commonly used index to track cattle price trends across eastern Australia.

The indicator experienced a 70 percent reduction from a record peak of 1191.52c/kg on 24 January 2022 to a low of 349.14c/kg on 18 October 2023.

The EYCI has only recovered a portion of that lost ground to reach a closing level of 599.45c/kg yesterday.

The impact of the price plunge on cattle producer incomes is reflected in ABARES’ newly release Financial Performance of Livestock farmers 2021-22 to 2023-24.

The analysis shows average farm cash incomes for specialist beef farms dropped by 66 percent in 2023-2024 to $65,000 per farm.

That is 60pc below the 10 year annual farm cash income average.

Specialist sheep farms saw an even larger 125 percent decrease in an average farm cash incomes, from $91,600 per farm in 2022-23 to an estimated loss of $23,000 per farm in 2023-24.

The average annual farm cash income for specialist sheep farms over the 10 years to 2023-24 was $128,000.

However, increased turnoff of cattle and sheep over the same period is expected to have moderated the price decrease.

The report is based on data from the ABARES Australian Agricultural and Grazing Industries Survey, which covers broadacre farms with an estimated value of agricultural operations (EVAO) greater than $40,000.

It also documents a 33 percent decline in the number of broadacre and dairy farms in Australia since 1999.

It recognises 56,500 farms in Australia 2023-23, of which 22,100 are specialist beef farms, 8900 are specialist sheep farms, and 3000 produce a mix of cattle and sheep.

By comparison, Meat & Livestock Australia’s State of the Industry Report puts the number of beef cattle farming businesses in Australia at 52,376 farm businesses.

Total cash receipts for specialist beef farms have increased by 2.3pc per year since 1999-2000, according to the report, while total cash costs had increased at an annual average rate of 1.5pc per year, reflecting small improvements in farm productivity.

Cash receipts for specialist sheep farms increased by 1.5pc per year, versus a 1.4pc per year increase in cash costs.

The proportion of livestock farms investing in new capital each year in the 10 years since 2011-12 averaged 51 percent for specialist beef farms and 55pc for specialist sheep farms.

As at June 2023, an estimated 21pc of Australian livestock farms held Farm Management Deposit accounts, at an average value of $307,700 per farm.

The full report can be viewed on the ABARES website here.