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.
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.
