Australian farm profits forecast to fall 39% amid rising production costs

Australian farm profits could decline by 39% in the 2026/27 financial year amid rising production costs and difficulties securing seasonal workers. According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), average broadacre farm business profits are forecast to fall from $219,000 in 2025/26 to $133,000 in 2026/27. The National Farmers’ Federation (NFF) highlighted these concerns following its Members’ Council meeting in Canberra.

Rising input costs remain one of the main factors putting pressure on Australian farmers’ financial performance. According to the NFF, fuel prices increased by 21% in 2025/26, while fertilizer prices rose by 16%. Higher production costs are adding financial pressure on farm businesses and reducing profitability. In response, the federation has called on the government to introduce targeted financial support measures for farmers and strengthen the country’s fuel security.

Labor shortages remain another major challenge for Australia’s agricultural sector. According to NFF President Hamish McIntyre, changes to migration policies, visa processing delays and potential restrictions on the Working Holiday Maker program are creating uncertainty for agricultural businesses, particularly during harvest periods. Farmers are concerned that the proposed changes could complicate workforce planning and increase labor costs.

The federation emphasized that seasonal workers arriving in Australia under the Working Holiday Maker program play an important role in meeting agricultural labor demand. They cannot be fully replaced by workers recruited through the Pacific Australia Labour Mobility (PALM) scheme. Proposed restrictions and quotas for second- and third-year visa extensions could further complicate the situation. The NFF is calling for predictable visa processing times and continued access to emergency workforce arrangements.

Australian farmers have also expressed concerns over the proposed Australia–European Union Free Trade Agreement. The NFF opposes the current terms, arguing that they provide insufficient access for Australian agricultural products to the EU market. In particular, the proposed agreement would gradually expand market access for Australian beef to approximately 30 thsd tons annually over ten years, equivalent to just one week of Australia’s total beef exports. Industry representatives argue that these terms do not provide sufficient opportunities to expand agricultural exports.

Tags: EU, Beef cattle, agricultural products, Australia