Severe frosts and low grain prices dragged Western Australian farm profits down last year despite the best crop ever recorded.
The annual Planfarm Bankwest Benchmarks report analysed data from 550 broadacre farm businesses and found frosts were most severe in southern inland regions, which generated the lowest cash returns.
The report showed the average WA farm business made an operating surplus of $667,815 from a turnover of $2.2 million, which was down from a $680,227 surplus of just more than $2.1 million last year.
Damaged crops and low prices saw year-on-year return on capital drop from 4.7 per cent in 2016 to 4.2 per cent in the 12 months to February 2017.
WA delivered 16.6 million tonnes of grain last year — a record harvest.
Bankwest WA state manager Richard Bator said 2016 was expected to produce the highest yields in history for most farmers.
But Mr Bator said extreme frosts significantly affected financial returns.
“Underneath that headline [record harvest], it’s apparent the impact of frost and lower grain prices saw overall operating surpluses decline,” he said.
Kondinin farmer Lindsay Tuckwell estimated she lost 60 to 70 per cent of her crop to frosts last year.
Ms Tuckwell said the farm profits took a significant hit because she and her husband were not insured for frost damage.
“It put us behind the eight ball, to be honest,” she said.
Ms Tuckwell said they only had a couple of minor frosts during September and she was “quietly confident” they would avoid major damage this year.
But she said grains prices were still low and despite forward-selling some grain, she was hoping prices would increase before harvest.