ABARES is forecasting a record agriculture production value of $94.7 billion, $41.6 billion from livestock, this financial year, but what does that mean for profits in farmers' pockets?
According to the ABARES September 2025 Agricultural Commodities Report, which was released this week, the average profits of beef farms are set to increase slightly, but average farm cash income is expected to fall.
The report forecasts beef farms' average profits to increase in 2025–26 by $15,000 in real terms from $6,000 in 2024–25 to $21,000 in 2025–26, on the back of rising cattle prices, driven by strong global demand and favourable seasonal conditions in northern Australia, supporting herd sizes and an increase in the value of ‘stocks on hand’.
However, average farm cash income for beef farms is expected to decrease by $34,000 in real terms from $178,000 in 2024–25 to $144,000 in 2025–26, as reduced beef sales weigh on revenue in real terms, coupled with higher prices for beef stock purchases.
Meanwhile , sheep farms' average profits are forecast to increase by $15,000 in real terms, however this is from a $29,000 loss in 2024–25 to a $14,000 loss in 2025–26, with rising prices and favourable seasonal conditions leading to restocking and growth in herd sizes and hence an increase in the value of ‘stocks on hand’.
Overall, sheep farms are expected to face their fourth consecutive year of negative profits,
as low real wool prices, relatively high input costs and average pasture growth continue to weigh on profitability.
The report details that average broadacre farm (beef, sheep, cropping and mixed) total cash costs were forecast to lift to $717,000 this finance year from $693,000, and total average cash receipts to fall to $1,041,000 from 1,053,000.
The ABARES Saleyard Indicator Price for cattle is forecast to increase by 11% to average
675 cents per kilogram (carcase weight) in 2025–26.
This indicator is calculated by averaging MLA’s National Heavy Steer and Processor Cow indicator prices.
In early August 2025, both the National Heavy Steer and Processor Cow indicators nearly reached 800 cents per kilogram (carcase weight), significantly higher than ABARES forecast year-average price for 2025–26 of 675 cents per kilogram (Figure 9.2).
However, saleyard prices are expected to fluctuate over the remainder of 2025–26 as processor competition for cattle is tempered by reduced processing capacity in some southern areas, particularly for mixed sheep-beef processing facilities.
Strong demand for lamb coupled with reduced global production has seen Australian lamb saleyard prices recently surge to new highs, however over the second half of 2025–26, prices are expected to moderate from recent highs as processors reduce throughput in response to falling margins and the forecast limited availability of lambs.
The annual beef production volume is forecast to decline by 9% to 2.5 million tonnes. Despite this, beef production in 2025–26 is expected to be 13% higher than the 10-year average and the third highest on record.
Average carcase weights are also forecast to increase with an improved climate outlook for southern Australia and high pasture growth in Queensland and the number of cattle in feedlots is expected to increase further in 2025–26 with strong demand from north Asian markets for grain-fed beef and lower feed grain prices in Australia.
Lower per capita domestic beef consumption and strong global demand for Australian products is expected to keep the share of production exported elevated at 79% in 2025–26, up from 75% on average over the previous 10 years.
World beef supply in 2025–26 is forecast to be relatively stable in major exporting countries with lower supply from Australia and the United States broadly offset by higher supply from Brazil and New Zealand.
National Farmers Federation President David Jochinke said despite the sector taking a hit from droughts, floods and uncertainty from global trade disruptions, farmers had held a steady hand.
“The lift is largely underpinned by strong livestock prices, but credit must be given to calm approach by the government and industry on the tariff turbulence," Mr Jochinke said.
“Most of all, the result is also a reflection of blood, sweat and smart investment from farmers.”
Mr Jochinke said with the 2030 Roadmap goal of $100 billion annually within reach, now was the time for smart policy to get the sector over the line.
Minister for Agriculture, Fisheries and Forestry, Julie Collins, said every community relies on farmers, which was why the government was backing them to grow their businesses and to succeed.
“The continued growth in our agriculture, fisheries and forestry sector is good for our farmers, it’s good for our regional economies, and it’s good for our trade relationships," Ms Collins said.
“This record forecast is not only a result of increased demand for our world-class products, but what you can achieve when government works with industry to deliver for them."
