03/06/2008 - 08:42

Grain producers' to improve production

03/06/2008 - 08:42

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Grains producers are in a strong position to expand production and boost productivity because of recent capital investments in land, plant and machinery, according to a new ABARE report.

Grain producers' to improve production

Grains producers are in a strong position to expand production and boost productivity because of recent capital investments in land, plant and machinery, according to a new ABARE report.

The report, Financial performance of grains producers, 2005-06 to 2007-08, was released today by ABARE's acting Executive Director, Karen Schneider.

"In 2007-08, improved yields and increased production are projected to result in a recovery in grains producers' incomes and business profits," Ms Schneider said.

"Assuming a return to average seasonal conditions, grains producers are in a strong financial position to expand farm production and incomes," she said.


"Grains producers have considerable financial capacity to fund their expansion in 2008-09 as they have substantial liquid asset reserves, high equity levels and strong farm cash flows from 2007-08," Ms Schneider added.

However, Ms Schneider cautioned that "many producers' high equity levels have been driven by a steady increase in land values in recent years."

Producers' capacity to borrow additional funds is dependent upon land values remaining high.

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