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After suffering through one of the worst droughts on record, the agriculture industry is benefitting from higher prices for most commodities while favourable weather conditions are expected to produce a near record harvest.
The value of crop production is expected to be boosted by strong price gains for grains, cotton and sugar while the value of livestock production is forecast to rise alongside higher volumes.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts the value of agriculture production to reach a record $73 billion in 2021-22 - $8 billion more than was predicted just three months ago.
Westpac's lending trends show the scaling up of family farming businesses will play a key role in achieving this milestone, with property expansion loans to third generational family farms growing from 6 per cent in 2017 to 19 per cent in 2021.
By helping these family farms expand, more generations are able to get into the business of agriculture, stay in the business of agriculture and grow the business of agriculture.
According to ABARES, the median age of the Australian agriculture industry worker is 49, nearly a decade older than the overall workforce.
By creating opportunities for younger generations within family farms to not only work in the business, but work on the business, the entire industry captures renewed innovation and sustainability.
Rural property expansion and new rural property purchases escalated significantly towards the end of 2020, as much of the east coast began to emerge from drought and has remained high throughout 2021.
Over half of Westpac's agribusiness customers have had a relationship with the bank for more than 30 years, and 87 per cent for more than a decade.
We've been able to build valuable relationships as the majority of our bankers live and are from farming families who have grown up within 300km of where they work. They understand the region and the challenges and opportunities their farmers face and are connected to the community.
Westpac data indicates that multi-generational agribusinesses tend to invest more in their enterprises to enable them to grow as each generation becomes part of the family operation and its future.
Queensland is home to the highest volume of third generational family farming customers, with their total business loans up 39 per cent, compared to the national increase of 20 per cent.
One such Queensland multi-generational agribusiness is that run by Colin Dunne. Colin is a grain and beef producer from the Duaringa district, where his family has resided for more than a century.
His parents were farmers, and now all four of his adult children work alongside Colin and his wife Catherine in the family business.
Colin says being given the opportunity to buy into agricultural land at an early age, and then being able to pass that opportunity onto his children, has been the key to his business growing to where it is today - incorporating 14 different properties, running 10,000 cattle, and supporting five families.
The Dunne's have upsized and upscaled their business to offset the impacts of both droughts and floods, by working closely with Westpac.
Colin's first port of call when business is concerned is Westpac, and he describes the relationship with his Agribusiness banker as "stronger than just lending money, it's one that follows through".
Supporting and growing family agribusinesses is an important stride towards success and Australian agriculture growing to an $100 billion industry by 2030.
We've been supporting the advancement of rural industries and regional infrastructure for over two centuries and look forward to doing it for at least another 200 years.
- Source: Westpac Agribusiness Insights Report, September 2021