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Current economic studies (farm profitability)
Key Points
Property size is a significant determinant of profitability ABARE conducted an economic survey of farms in Oct-Nov 2006 in the Wentworth, Mildura, Swan Hill and Balranald areas (ABARE 2007. Research Report. Mildura - Wentworth. A case study of horticultural farm performance). Property size is a significant determinant of profitability. Small farms need to investigate strategies to capture some of the benefits of economies of scale, such as farm amalgamation, to be more efficient with their own labour and spread capitol and overhead costs over a larger production base. Property amalgamation may be through outright purchase, leasing or share farming agreements. Alternatively growers may look to jointly purchase plant and machinery and use the operators time more efficiently and as an alternative to using contractors. However, issues such as arrangements for access to jointly owned machinery during times of peak demand would need to be addressed. Opportunities for cost reduction, to further value-add and for supply chain improvements in the established horticultural industries were identified by Scholefield Robinson Mildura in a 2007 report. |