Most farmers enjoy healthy recovery, but beef battles on

The incomes of Australian farmers have rebounded strongly this year thanks to rising global demand for food, soaring commodity prices and higher production levels in some farm sectors.

Dairy, sheep, mixed livestock and crop farmers, in particular, have enjoyed a better year, according to a report by the Australian Bureau of Agricultural and Resource Economics.

The cash incomes of dairy farmers for 2007-08 will average $137,100 per farm, more than four times greater than 2006-07 when farmers battled the twin challenges of drought and low milk prices.

The $137,100 average makes dairying the most lucrative type of farming in Australia at the moment, ABARE says.

The bureau's Farm Surveys Results, 2005-06 to 2007-08 report also indicates that dairy farmers need a turnaround in their finances, with the average dairy farm shouldering a debt that would make many Melbourne home buyers shudder.

The latest ABARE figures available (at June 2007) put average Victorian dairy farm debt at $473,300, about $40,000 greater than the median Melbourne house price. The national average dairy farm debt is even greater at $493,760.

Diversified farms, farming livestock and crops, have also fared well in 2007-08, with their farm cash income tipped to average $106,900 — more than four times greater than in 2006-07.

Incomes for sheep farmers are recovering strongly, ranked just behind their diversified farming colleagues. The average cash income for Australian sheep farms is tipped to be $93,400, more than three times greater than the lowly $29,580 received in 2006-07 and their highest annual income in real terms since 1987-88.