Australian winter crop gross margins

As the 2024/25 seeding period approaches, farmers are finalising their decisions on crop selection and optimising crop rotation. Commodity and farm input price forecasts for this season diverge significantly from previous seasons, impacting overall profitability.

Report summary

This report serves as a benchmarking tool for the gross margins of Australian wheat, barley, and canola, using the relatively “quiet” season of 2017 as the starting point. The report discusses the findings of our margin model for the three major winter crops on a national level and the potential cropping acreage.

The 2023/24 season saw substantial price reductions for grains and oilseeds and, to a lesser extent, for farm inputs. Looking ahead to the 2024/25 season, we expect gross margins to improve due to lower production costs, with potential reductions of up to 20% in fertiliser and agrochemical costs. The outlook is significantly better than last season but will be subject to rainfall and temperatures during the winter months.

Gross margins can also be indicative of a business’s ability to generate cash. In that sense, 2024/25 should see a rebound close to historical levels, though the figures are below the averages from 2017 to 2023/24. The recent land value growth experienced in rural Australia can be partly attributed to these gross margin trends.