@article{Wimalasuriya:125040,
      recid = {125040},
      author = {Wimalasuriya, Rukman},
      title = {Risk Beyond Farmers’ Control: Grain-Sheep Mixed Farming  Systems under Rainfall and Commodity Price Variability},
      address = {1999},
      number = {410-2016-25644},
      pages = {10},
      year = {1999},
      abstract = {Variability of rainfall and commodity prices are important  off-farm factors
influencing the profitability of dryland  farming. Since neither of the above factors can
be  predicted, lessons from the past can be a preparation for  the future. Analysing farm
profit over ten years is  suggested as a way to understand the risks inherent in  farming.
Financial sustainability of a farm business  depends mainly on the net growth of farm
equity over the  years which can be achieved even with fluctuating farm  profit.
“FarmProf” is a simple spreadsheet model developed  in Excel, to analyse both annual
farm profit and farm  equity of a broadacre cropping farm or a mixed  grain-livestock
farm over a ten year period. If crop yield  data are not available, FarmProf uses rainfall
data to  estimate crop yields. The model was used to analyse the  profitability of a
hypothetical mixed farm in North-central  Victoria for the ten years from 1988-89 to
1997-98.
Annual  farm profit varied from year to year between a loss of  $20,000 and a profit of
$195,000, with an average of  $83,200 per annum. There were five high-profit years,
three  medium-profit years and two negative-profit years over the  ten years. It was
assumed that the rates and prices of farm  inputs remained constant. Even with 2 years
of net loss,  farm equity doubled over the 10 years from $700,000 to  $1,400,000. The
contribution of rainfall and cereal price  variability to the peaks and troughs in annual
farm profit  is discussed.},
      url = {http://ageconsearch.umn.edu/record/125040},
      doi = {https://doi.org/10.22004/ag.econ.125040},
}