What does the ‘Typical’ Wimmera Farm look like financially?

What does the ‘Typical’ Wimmera Farm look like financially?

What does the ‘Typical’ Wimmera Farm look like financially?

By Brian Watts


Whilst this is not really possible, this will be fairly close!  We all know that farmers are very quick to help out a neighbour in times of need, in times of a crisis.   This almost goes without saying.  However, when it down to how they are coping financially, this is a different matter.   They will be very open with yields and prices but that is possibly where most will stop!

In the 2019 financial year (FY), this being the our most recently completed study of Wimmera Farm Financial Performance, an insight into what the ‘typical’ Wimmera Farm looks like follows

Wimmera Farms     Here are a few key facts:
2019 2015 to 2019
Farm Operating Costs 51% 59%
Equity Ratio 93.7% 94.2%
Plant Productivity 92% 123%
Total Debt to Farmland Owned 7.4% 8.7%
‘Cash’ Profit before Interest Costs to Interest 4.4 times 4.4 times


The five interesting ratios or key performance indicators (KPI’s) above provide a snapshot of Wimmera Farms financial performance for the 2019 FY.  Five year rolling averages are probably more informative than ratios for one year alone, they are also listed.

Figures for the 2020 FY (the most recent harvest) will not be available until tax and financial statements are completed well into 2021.

So what do these five KPI’s really mean?  The numbers above are for the median or for the farm in the middle (from lowest to highest)  in our 2019 FY data base.  The median farm will differ for each of these five KPI’s.

The median farm in the 2019 FY:

  • Spent $51 on fuel, spray, fertilizer and other operating costs out of every $100 of farm Income earned.
  • Of the value of all their farm assets owned, the median farm has paid for 94% and borrowed 6%.
  • The current value of farm plant was equal to 94% of farm Income earned.
  • All Farm Loans amounted to 7.4 % of the value of farmland owned at current farmland value.
  • Cash profit (before depreciation and Finance/Interest costs) were 4.4 times the amount paid on interest/finance costs of running the median farm.

How can this information be used to help?  The above ‘snapshot’ provides a start to compare any Wimmera farm.    By knowing how a farm compares against the middle or median farm starts to provide direction on what next to look for and what direction to take if there is a need to improve or the desire to do better.

Watts Price Accountants of Horsham commenced reporting on Wimmera Farm Performance in 1991.   Work on the 30th Report (for the 2020 FY) has already commenced.  Any Wimmera Farm is welcome to be involved and receive a comprehensive Report on seventeen KPI’s for 2020 and the previous five year rolling average.

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