Top five expenses include wages, which have increased 15% year on year.
New data from Farm Focus highlights the significant financial challenges farmers have faced over the past year.
The agri-business software platform supports $9 billion in farming annual income, an analysis of which paints a clear picture of what farming businesses are facing.
Farm Focus farms brought in a median income of $920,000, with an average of $1.3 million, across the last financial year; with gross profit sitting at 39%, down from 44% in 2022 and 41% in 2023.
Along with an increase in interest rates and a steady decline in commodity prices sector-wide, the top five expenses farmers have faced over the past 12 months have been wages (up 15% year on year), feed grown on farm (down 3.1%), fertiliser (down 14.1%), repairs and maintenance (down 4.2%), and vehicle operating expenses (up 12%).
Over 70% of Farm Focus farmers indicated that they are navigating this through ensuring greater visibility over their financial data, emphasising the importance of directly overseeing their farm’s finances.
For those who are not yet entirely confident in their financial management capabilities, 33% shared that they want to achieve better visibility over their numbers advocating for the importance of understanding historic data to help plan for a successful future.
An additional 22% of farmers said although they consult with a trusted financial adviser when making decisions for their farms, there is also a growing desire to better understand the numbers and become more involved in the decision-making process.
There is also an overwhelming consensus among nearly all farmers on how paramount having financial transparency and visibility is for their farming operation, with 96% of respondents advocating for its importance.
Farm Focus CEO Auriga Martin said farmers are increasingly hands-on with their business finances and recognise the importance of knowing their numbers and managing finances effectively.
“We receive regular feedback from rural accountants across the country who emphasise how valuable it is for farmers to be involved and aware of their finances. Those who work with our Farm Focus farmers often remark on how beneficial it can be to on-farm financial planning when the farmers are as thoroughly across the data as the accountant is.”
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