Victorian livestock participants in the Livestock Farm Monitor Project (LFMP) have recorded a significant turnaround in business performance, with strong commodity prices and improved seasonal conditions driving a sharp lift in farm profitability across the state, according to the latest LFMP annual report.
The 2025–26 LFMP report found 88% of participating farms recorded a positive profit, following 3 consecutive years of declining profitability. Farm incomes reached historically high levels, supported by record lamb prices and strong cattle, wool and mutton prices.
The report draws on financial and production data from 133 sheep, beef and mixed livestock-cropping businesses across Gippsland, Northern Victoria and South West Victoria. The project has been running continuously since 1971 and provides one of Agriculture Victoria’s most valuable sources of farm-level information to help guide policy, research and service delivery.
Agriculture Victoria Farm Business Economist Sam Henty said improved seasonal conditions helped many businesses rebuild feed reserves and reduce drought-related pressures.
‘After several challenging seasons, it is encouraging to see Victorian livestock businesses recording a strong recovery in profitability,’ Mr Henty said.
‘Higher livestock, wool and lamb prices combined with improved pasture growth gave many farm businesses an opportunity to strengthen their financial position and rebuild confidence.’
Statewide average farm profit increased substantially across all regions, with South West Victoria recording the highest average earnings before interest and tax (EBIT) at $594 per hectare, followed by Northern Victoria at $262 per hectare and Gippsland at $168 per hectare.
Mr Henty said while seasonal and market conditions improved, the report also highlights ongoing business challenges.
‘Average farm debt remains historically high and interest costs continue to place pressure on cash flow for some businesses,’ he said.
‘While many farms reduced debt during the year, managing financial risk remains a key focus for livestock businesses across Victoria.’
The report found average gross farm income was well above the 10-year average in all regions. Gippsland recorded its highest average gross farm income since 2004–05, while South West Victoria recorded its second-highest average gross farm income since 1971.
Regional findings showed the influence on farm profitability:
- Gippsland balanced higher fertiliser and supplementary feeding costs with improved late-season pasture growth and higher stocking rates.
- Northern Victoria experienced a dry spring 2025 and high feed costs despite stronger lamb, beef and wool prices.
- South West Victoria benefited from improved seasonal conditions, lower supplementary feeding costs and strong lamb prices, which reached their highest level in the project’s 56-year history.
Mr Henty said the report provides important insights to support business decision-making.
‘The LFMP helps farmers benchmark their business performance and identify opportunities to improve productivity, profitability and resilience,’ he said.
‘The information collected also helps Agriculture Victoria better understand the challenges and opportunities facing livestock businesses and supports evidence-based decision-making across the sector.’
To read the 2025–26 LFMP annual report in full, visit Livestock Farm Monitor Project.
