Beef
1 November, 2026
Paydirt outpaces profit for beef producers
EVEN Australia’s best-run beef businesses make more from being land owners than they do producing beef, according to an independent industry analysis.
Grazing land values have doubled over the past 12 years, and data drawn from the 2026 Australian Beef Report confirms an ongoing trend of more wealth created from land appreciation than from beef production.
Increasing land values have kept return on assets low.
Operating returns achieved by the top 25 per cent of Australian beef businesses are less than current term deposit rates.
Meanwhile, the industry-wide average is close to breakeven, with producers reliant on capital gains for wealth creation.
The triennial national report, prepared by industry consultants Bush Agribusiness, compared industry performance in the past three years against performance over a 12-year average.
The latest 156-page report draws on data from the ABARES annual national farm surveys of specialist large-scale beef producers and Bush Agribusiness’ client base.
While the financial performance gap between the industry average and the top 25 per cent of producers has remained consistent over the past three years, the latest three-year period saw lower profits and profitability across both groups and in both the northern and the southern regions of Australia.
Report author Ian McLean explained that across all groups profits in the most recent three-year period were higher than they were for the preceding 12-year period.
“However, profitability was lower due to higher land values,” he said
The average operating return in the south over the last 12 years was effectively breakeven, the report showed but there had been an average total business return of 5.8 per cent, all of which came from increase in land value.
In the north, the average return in the same period was 5.9 per cent, with one per cent coming from operating returns and 4.9 per cent from land value increases.
“This means on average, all or close to all, of long-term industry returns are from land value increases,” Mr McLean said.
“This also raises questions about the industry’s future capacity to fund working capital.”
Overall northern beef business, with average total assets of $18 million, generated an average profit after interest of $73,000 over the three years to 2025.
Southern business overall recorded a $40,000 loss, from an average of $11 million in total assets.
Toowoomba-based Mr McLean said even the top 25 per cent, with long-term average operating returns of two to three per cent, could not afford to have too much debt before all their working capital was used to service debt and none remained for the big-ticket items.
“The fact that around half of the industry have minimal working capital available after paying their running costs and interest presents a significant risk to the human and environmental capital that they represent or manage,” Mr McLean said.
“If land values were to stabilise, or if there were a correction, then their financial capital would be at risk also.”
The top 25 per cent producers recorded a northern average cost of production of $1.79/kg LW compared to the northern average of $2.49/kg LW.
The corresponding southern comparison was $2.35/kg LW compared to $3.40/kg LW.
The 2026 report suggests beef businesses should target a less than $2.00/kg LW cost of production and high-performing breeding operations should be aiming for $1.50.
“This isn’t an easy target, but is achievable if the business has scale, discipline and an unrelenting focus on herd productivity, targeted herd expenditure and labour efficiency,” Mr McLean said.