Agriculture Victoria Farm Business Economist, Paul Deane said Return on Assets (RoA) was a key measure because it enabled comparison across different farming businesses as well as across different asset classes.
Mr Deane warned that it was dangerous taking just one year’s performance into account as that could be due to management or just ”a bit of luck”.
Results from the Department of Agriculture’s Livestock Farm Monitor Project (LFMP) showed that over a five year period, only 10 percent of farms made the top 20 percent in two out of five years.
Only two percent of farms could make the top 20 percent in three of those five years.
He said people tended to think that in a single year, price was taken out of the equation. However, in 206/17 figures for a 19 micron wool clip across the year showed that for a spring shearing (wool sold accordingly) wool made about $16 a kilogram, but an autumn shearer received around $19/kg.
He said there was no real management influence in the difference because these were long term, fixed decisions - “it was just a rising market”.
