Fertilizer Expenditure in the Australian Grains Industry

Fertilizer Expenditure of Grain Farms in Australia.

The Australian grains industry produces around 40 Mt of wheat, barley, oats, canola, pulses and other grains each year. The production systems vary from high rainfall zone intensive production with high yield potentials, to low rainfall opportunity cropping. Most of the grain production is rainfed, and so varies from year to year.
The data below is taken from a series of reports on farm costs for grain and mixed farming properties in each of the agroecological zones. The years surveyed were 2006-2007, 2007-2008 and 2008-2009, and the results reported are the average for those three years. Mean yields over these periods are lower than the long term average for Australia due to drought with annual wheat production of 10.8 Mt (2006-2007), 13.6 Mt (2007-2008), 21.4 Mt (2008-2009), 21.8 Mt (2009-2010), 27.4 Mt (2010-11) and 29.9 Mt (2011-2012). Production for the current 2012-2013 crop season is forecast at 22.0 Mt.

The amounts spent on fertilizers are generally the largest single variable cost for grain producers, and are 15-20% of all cash costs, or 20-25% of variable costs.


Figure 1: Australian agroecological zones, Grains Research and Development Corporation.


Table 1: Physical performance benchmarks for grain farms in Australia (2006-07 to 2008-09), averages per farm.

Table 1a	Specialist Grain Farms $/ha
Region	Av Rainfall (mm)	Farm Size (ha)	Cropped area (ha)	% wheat	Ave. Wheat Yield t/ha
Central NSW	340	2459	666	75	0.7
NSW & Vic Slopes	443	1730	1059	59	0.8
Vic HRZ & Tas	447	1034	550	39	2.1
SA & Vic Wimmera	365	880	580	33	1.3
SA & Vic Mallee	288	2596	1482	61	0.7
SA Mid North,	404	1327	747	46	1.4
WA Sandplain	470	4959	3008	46	1.9
WA Northern	278	8770	2901	79	1.1
WA Eastern	280	5081	2589	86	0.9
WA Central	340	3365	1858	59	1.6
North west NSW/SW Qld	548	9838	3261	63	1.2
North east NSW/SE Qld	614	1547	810	50	1.7
Central Queensland	635	4119	2310	52	2.0

Table 1b	Mixed Farms $/ha
Region	Av Rainfall (mm)	Farm Size (ha)	Cropped area (ha)	%wheat	Ave. Wheat Yield t/ha
Central NSW	335	4984	770	67	0.9
NSW & Vic Slopes	457	1470	415	59	0.8
Vic HRZ & Tas	522	1047	178	25	2.5
SA & Vic Wimmera	460	1041	287	35	1.2
SA & Vic Mallee	330	1907	732	55	0.9
SA Mid North,	427	1440	441	48	1.2
WA Sandplain	507	3617	1159	37	1.8
WA Northern	343	3610	1031	67	1.1
WA Eastern	272	3992	1766	72	1.1
WA Central	419	1974	1402	53	1.7
North west NSW/SW Qld	533	4424	624	72	1.0
North east NSW/SE Qld	612	1990	290	44	1.5
Central Queensland	628	7762	580	47	1.7

Table 2. The amount spent on fertilizers as a proportion of total cash costs on Australian grain farms.

Region	Specialist Grain Farms $/ha			Mixed Farms $/ha
	Fertilizer	Total Cash Cost	% Fert	Fertilizer	Total Cash Cost	% Fert
Central NSW	15.30	122	13%	6.80	108	6%
NSW & Vic Slopes	40.40	239	17%	20.10	217	9%
Vic HRZ & Tas	68.70	457	15%	35.50	266	13%
SA & Vic Wimmera	41.1	274	15%	30.3	255	12%
SA & Vic Mallee	24.90	130	19%	17.30	116	15%
SA Mid North,	47.20	278	17%	21.60	157	14%
WA Sandplain	73.70	327	23%	53.30	223	24%
WA Northern	21.90	102	21%	22.10	115	19%
WA Eastern	21.30	114	19%	34.20	162	21%
WA Central	49.30	230	21%	41.50	213	19%
North west NSW/SW Qld	4.40	157	3%	1.40	72	2%
North east NSW/SE Qld	31.40	343	9%	9.30	185	5%
Central Queensland	14.40	298	5%	2.40	86	3%

Table 3. The amount spent on fertilizers as a proportion of variable costs on Australian grain farms.

Region	Specialist Grain Farms $/ha				Mixed Farms $/ha
	Fertilizer	*Crop Costs	% Fert	$/cropped ha**	Fertilizer	*Crop Costs	% Fert
Central NSW	15.3	93	16%	56	6.8	53	13%
NSW & Vic Slopes	40.4	178	23%	66	20.1	121	17%
Vic HRZ & Tas	68.7	357	19%	129	35.5	191	19%
SA & Vic Wimmera	41.1	219	37%	62	30.3	190	16%
SA & Vic Mallee	24.9	111	22%	44	17.3	86	20%
SA Mid North,	47.2	231	20%	84	21.6	121	18%
WA Sandplain	73.7	275	27%	122	53.3	170	31%
WA Northern	21.9	76	29%	66	22.1	81	27%
WA Eastern	21.3	84	25%	42	34.2	114	30%
WA Central	49.3	190	26%	89	41.5	155	27%
North west NSW/SW Qld	4.4	110	4%	13	1.4	43	3%
North east NSW/SE Qld	31.4	267	12%	60	9.3	107	9%
Central Queensland	14.4	246	6%	26	2.4	55	4%

* Crop costs were derived from the total cash cost, less administration, livestock purchases, fodder, shearing and interest.
** $/cropped ha for specialist grain farms assumes that all the fertilizer is applied to the cropping areas.



Sources: ABARES GRDC Reports, 2011 (Various Authors)

1. Physical and financial performance benchmarks for grain producing farms, New South Wales central agroecological zone.
2. Physical and financial performance benchmarks for grain producing farms, New South Wales - Victoria slopes agroecological zone.
3. Physical and financial performance benchmarks for grain producing farms, Victorian high rainfall agroecological zone and Tasmanian grains area.
4. Physical and financial performance benchmarks for grain producing farms, South Australia and Victoria Bordertown-Wimmera agroecological zone.
5. Physical and financial performance benchmarks for grain producing farms, South Australia and Victoria Mallee agroecological zone.
6. Physical and financial performance benchmarks for grain producing farms, South Australia mid-north - lower Yorke and Eyre agroecological zone.
7. Physical and financial performance benchmarks for grain producing farms, Western Australian Mallee and Sandplain agroecological zone
8. Physical and financial performance benchmarks for grain producing farms, Western Australian northern agroecological zone
9. Physical and financial performance benchmarks for grain producing farms, Western Australian eastern agroecological zone
10. Physical and financial performance benchmarks for grain producing farms, Western Australian central agroecological zone
11. Physical and financial performance benchmarks for grain producing farms, New South Wales north-west and Queensland south-west agroecological zone
12. Physical and financial performance benchmarks for grain producing farms, New South Wales north-east and Queensland south-east agroecological zone
13. Physical and financial performance benchmarks for grain producing farms, Queensland central agroecological zone.