Comparison of financial performance and debt characteristics of different vegetable farms

Industry Financials : 10-12-2012

There was a marked contrast in the structure and financial performance of specialist vegetable growers. Potato growers on average operated larger farms and had larger hectarage dedicated to vegetables while tomato growers on average operated smaller areas due to the impact of undercover production. Lettuce growers tended to be less specialised than tomato and potato growers.

Specialist lettuce growers on average had higher rates of return with farm cash income of $349,200 and business profits of $166,800. In contrast specialist potato growers average farm cash income was $282,500, specialist tomato growers $77,500 and other vegetable enterprises $99,800.

In order to achieve these rates of return lettuce growers had much higher receipts (averaging $2.3million), much higher costs (averaging $2 million) and much higher debt (averaging $1.8 million) with consequent much lower equity in the farm.

Specialist lettuce and potato growers improved their rates of return in 2010-11 in contrast to tomato growers who saw a substantial fall in cash flow and the emergence of negative business profit.

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