3 June 2008 |
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| Grains producers’ financial position improves |
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| Grains producers are in a strong position to expand production and boost productivity because of recent capital investments in land, plant and machinery, according to a new ABARE report.
The report, Financial performance of grains producers, 2005-06 to 2007-08, was released today by ABARE’s acting Executive Director, Karen Schneider. “In 2007-08, improved yields and increased production are projected to result in a recovery in grains producers’ incomes and business profits,” Ms Schneider said. “Assuming a return to average seasonal conditions, grains producers are in a strong financial position to expand farm production and incomes,” she said. “Grains producers have considerable financial capacity to fund their expansion in 2008-09 as they have substantial liquid asset reserves, high equity levels and strong farm cash flows from 2007-08,” Ms Schneider added. However, Ms Schneider cautioned that “many producers’ high equity levels have been driven by a steady increase in land values in recent years.” Producers’ capacity to borrow additional funds is dependent upon land values remaining high. |
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For media interviews and comment, please contact Dr Jammie Penm, Chief Commodity Analyst, ABARE on 02 6272 2030, mobile 0408 686 219 or email jpenm@abare.gov.au For free downloads of the report Financial performance of grains producers 2005-06 to 2007-08, please visit the ABARE website www.abare.gov.au or phone Publications on 02 6272 2010. |
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