Realised farm income

IBISWorld forecasts realised farm income to hike by 29.4% in 2024-25, to $19.8 billion. This represents a sharp rise on the previous year when incomes had previously risen due to successive crops and strong commodity prices particularly in the two years through 2021-22. The production and output slumped due to global supply chain concerns which was fuelled by the Russia-Ukraine conflict. Despite these swings, cattle farmers profited from rising meat prices and strong export demand. Strong foreign demand for Australian beef and other meat products boosted prices and helped offset some of the volatility in domestic output values. Despite falling livestock numbers, the hikes in the value of goods and robust export demand have supported realised farm incomes in 2024-25.

Turmoil in global commodity markets, combined with volatile weather conditions, has generated significant volatility in realised farm incomes in Australia over the past decade. Weather conditions, such as the level of annual rainfall, have a significant effect on production volumes and farm earnings. Australian agriculture faced tremendous fluctuation as a result of the country's variable weather patterns. While some northern and western regions received above-average rainfall in early 2025, which aided pasture growth and winter crop germination, large areas of southern New South Wales, Victoria, and South Australia experienced below-average rainfall and ongoing dry conditions, jeopardising timely crop planting. As a result, agricultural production and farm incomes remain unequal, with prospects for higher output in certain locations but ongoing problems and probable production losses in others, emphasising climate variability's continued impact. Lower production volumes reduced farm earnings over the three years through 2019-20. Conversely, multiple La Nina weather events in 2020-21 and 2021-22 drastically reversed these trends, resulting in multiple bumper crops. Production volumes soared in these years, while turmoil in global supply chains fostered a surge in prices. Together, these trends generated an unprecedented surge in realised farm incomes.

Overall, heavy rainfall boosted output and yields, supporting dramatic increases in realised farm incomes in 2020-21 and 2021-22. However, in some cases, heavy rainfall has disrupted farmers' output, especially during major flooding events in 2022 and 2023. In addition, global supply chains have gradually rebuilt capacity since 2021-23, placing downward pressure on commodity prices. Although production volumes have remained elevated, despite a slight easing in 2022-23 and 2023-24, falling prices are the decisive factor constraining the value of farm production. While prices eased, particularly for crops, farm costs continued to rise, which fostered a sharp trend reversal in realised farm incomes in 2022-23.

Although realised farm incomes have faced significant volatility over the past few years, export demand has grown amid supply shocks in the global food chain. In 2024-25, export demand for livestock and livestock products reached record values. Rapidly rising incomes in developing economies, particularly China, have made it possible for consumers in these countries to purchase Australian food products, which benefit from an international reputation for high quality. At the same time, a drop in wheat prices resulted from higher production output. Favourable rainfall in regions like New South Wales, Queensland and Western Australia resulted in a significant rise in national winter crop production. IBISWorld forecasts realised farm income to surge at a compound annual rate of 9.5% over the five years through 2024-25.