Producers looking to upgrade as a result of the good results and outlook from ABARES can source cheaper machinery finance through Business Finance Australia. The good numbers were announced by ABARES – the Australian Bureau of Agricultural and Resource Economics and Sciences at a conference in Canberra on 7 March and include record level forecasts for 2022/23 in some areas. The reports and snapshots show continued strong growth in agriculture and although income for broadacre farms is projected to decrease this financial year, it is still well beyond the 10 year average. For fisheries and aquaculture the forecast for 2022/23 is also strong with an 8% increase expected. One of the reasons for the good growth in some areas is given as operators investing in productivity. Machinery and equipment manufacturers focus heavily on including features in new models which will generate improved productivity, reduced costs and increase profitability. Review this summary of the ABARES announcements and our finance update and see why it could be time to decide ‘yes’, to upgrading your equipment with cheaper machinery finance. Snapshot of Agricultural Sector The snapshot for agriculture announced by ABARES reveals a strong outlook for the sector on the back of impressive results. The industry is exhibiting strong growth and performance. The areas of exports, risk management and incomes were highlight as key. The forecast for this financial year is for production and exports to achieve record numbers. For broadacre farms and the dairy sector, incomes continue to exceed historic levels. benchmarks. According to Dr Jared Greenville, the ED of ABARES, the statistics are only one part of the overall picture. He said that the strong results can be attributed to past reforms, what is produced and exported being changed and to the investment made in productivity. These initiatives are what have strongly positioned agriculture to optimise the recent favourable conditions and the high commodity prices. There are some challenges ahead. Specifically, ABARES note these as adapting to how profits may be negatively impacted with the change in climate. Despite the more recent conditions providing extensive benefits. One of the issues that producers should note is the growing significance of sustainability. This is increasingly important to consumers and to investors. So much so that in many countries, sustainability is a key criteria for trade policy and for investments. Dr Greenville notes that agriculture in Australia is extremely sustainable and rates well on many of the criteria, when compared with competitors in other countries. This is an advantage which Dr Greenville said the sector needs to maintain. Climate conditions are expected to deteriorate but the good moisture in the soil, rebuilt herds and stock as well as high levels of water storage, should provide safeguards. According to Dr Greenville, these factors should provide a buffer for another year. Broadacre Farms – Prospects In regard to broadacre farms, as mentioned above, income is projected to fall by 7% this financial year. But despite this fall, cash incomes are 46% beyond the 10 year average. All states are expected to record a decrease except for South Australia and Western Australia. Forecasts for Aquaculture The report released by ABARES on aquaculture and fisheries is also positive. The forecast is for the value of gross production to increase 8% in 2022/23. Aquaculture contributing the majority to the increases. Higher values for abalone, tuna and salmonid are driving what is forecast to be an 11% production value increase in aquaculture, according to Dr Greenville. In 2023/24 production values in both areas is expected to remain stable and exports rise by 7%. Capitalising with New Assets With positive forecasts for both agriculture and aquaculture, producers might capitalise further with investment in new assets – upgrading old machinery. The timing may also be opportune in regard to machinery finance. While the RBA has just increased interest rates for a 10^th time, it has indicated further increases are likely. A pause also looks like being closer, but that may come after another increase. Securing finance before any further rate rises can represent a significant saving over the full term of the finance, which may be 7 years. Another very compelling reason to upgrade is the end to temporary full expensing at the end of this financial year. This tax measure has been extremely popular over the last 3 years with many business owners taking advantage of being able to claim the full price of new equipment in the year of purchase. Chattel Mortgage is seen as best suited for operators considering an accelerated asset depreciation measure. To assist with deciding if this is the ideal time for upgrading machinery, use our calculator to obtain rough finance estimates. Or just call us and our consultants will provide quick quotes as more accurate figures for budgeting purposes. For cheaper machinery finance on agriculture and aquaculture equipment, contact Business Finance Australia on 1300 000 033 DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.