 Good afternoon, everyone. This afternoon I'm going to talk about farm performance and introduce some new statistics we've released today that provide greater insights than what's been easily available in the past. Then I'm going to say a bit about investment in farms and where the capital used to fund that investment's been sourced. And similar to Karen Schneider this morning, I'll make a few comments about differences in performance between family and corporate farms and some of the likely explanations for that. And to finish, I'll look at variability in farm returns and what this means for the risk involved in owning and operating farms in Australia. So you can see incomes for broad acre farms have been high in recent years. The projection of an average $179,000 of farm for 2015-16 is 75% higher than the 10-year average and would be the best result in more than 20 years in real terms. Now that's been driven by high livestock prices, especially for beef and good winter grain production in most regions. Now of course there are differences across regions and industries which I'll come back to. Incomes have been more variable in the dairy industry. In 2015-16 farm cash income at a national level is projected to average $113,000 of farm. That's around 5% below the 10-year average and dairy incomes are projected to fall in all states except Western Australia and Queensland as a result of lower farm gate milk prices, higher cash costs and slightly lower milk production. And broad acre performance has varied within and across states. Now beef cattle productions by far the most common and widely dispersed agricultural activity in Australia and higher beef cattle prices result in increased farm cash incomes for a large proportion of Australian farms. In addition to higher beef receipts, winter grain productions increased in all states except Victoria and Tasmania and higher prices for lambs and wool have also helped. Now there are detailed descriptions by state and industry in the paper but some of the highlights include highest farm cash incomes in 20 years in New South Wales and the Northern Territory, the best results since 2000-2001 in Queensland and well above average results in Western Australia and South Australia. Victoria and Tasmania are the two states where incomes are projected to fall in 2015-16. So in Victoria increased beef cattle receipts aren't expected to offset reductions from lower grain production and in Tasmania dry seasonal conditions are projected to reduce livestock and crop receipts. Now while incomes in Tasmania are expected to be much lower than in 2014, this projection is still around 36% above the 10-year average. Now there have been concerns about the large increase in farm debt that occurred through the 2000s and this chart shows the proportion of broad acre farms with relatively high debt servicing commitments. So an interest to receipts ratio of greater than 15%. And you can see that at a national level it's fallen steadily since that peak of 25% in 2006-07 to around 9% last year which is very low in historical terms. Now that's been achieved through a relatively small reduction in debt combined with improved farm receipts and lower interest rates. Now that's a national picture and debt servicing's still difficult for many farms especially in regions where seasonal conditions have been poor for an extended period. And while at a national level debt didn't change much last year, debt did increase on 24% of broad acre and dairy farms. Now importantly, much of that increase has been used to fund expansion and increase intensity both of which would be expected to have productivity and profitability payoffs in the long term. And here we can see that borrowing to fund new on-farm investment especially the purchase of land, machinery and vehicles make up the largest proportion of farm debt. Debt to fund land purchase accounted for around 44% of broad acre farm debt last year. Now that's a fairly quick overview of farm financial performance. There's much more detail in the paper but if we were looking at one indicator to summarise economic performance it would be rate of return to capital which we can see here for the last 20 years for all farms in the broad acre sector. Now this series includes capital appreciation so it's important to remember there are two components. Operating returns with capital assets which is mainly land. And you can see the contribution of each when we add rate of return excluding capital appreciation to the slide. Now there's no systematic trend farm returns go up and down over time largely driven by random changes in weather conditions and commodity markets and also changes in land prices. And this applies across the different industries. Returns are better in some industries than others but rate of return moves around a lot reflecting unpredictable variables like the weather and commodity prices which have a big effect on farm returns and sentiment in rural property markets which has a big effect on farm capital values. Now this huge variation in rates of return between individual farms and industry level averages like these ones don't necessarily represent the performance of those farms which are run primarily with the intention of making profit and produce most of our agricultural output. In particular we know that a relatively small number of the largest farms produce the vast majority of output and that these farms earn much higher rates of return than their smaller counterparts. And as such there's growing interest from corporate agriculture businesses and investors in data that describes the performance of large farms. On the other hand the majority of Australian farms are relatively small and it's important we've got a good understanding of what's happening on these farms as well. So as a result we've regularly produced performance statistics for small, medium and large farms. And to help illustrate these differences more clearly starting from this edition of agricultural commodities we're publishing annual data for selected variables in 10 farm size categories for a number of industries and regions where farm size is measured as the value of receipts generated. Now it's a rich data set that you can download as a set of Excel tables so I'd encourage those of you who are interested to have a play with it. As an example some of the key insights we can pull out just using the Broadacre statistics include things like 48% of Broadacre output was produced by the largest 10% of farms while the smallest 50% accounted for 11% of output or you can see that the average rate of return increases consistently from smaller to larger farms and that 80% of investment was made by the largest 20% of Broadacre farms. Now we hope that these statistics will help people get a better understanding of the factors driving farm performance across the sector and we're looking to further disaggregate the largest 10% to provide more information on that important cohort. Now the theme of the conference is investment and there are many opportunities to make profitable investments in Australian agriculture and a good deal of investment has been happening and we can see from the slide here that it's large farms that account for the majority of investment as you'd expect given their focus on improving productivity and profitability and with this longer time series you can see that investment has increased but it's not clear that the rate of investment has been constrained by lack of access to capital or other impediments. Rates of return in the sector aren't systematically rising and comparison with other developed countries such as the US and Canada suggests that Australian farmers already use a relatively large amount of capital in production and perhaps most importantly it's relatively large Australian farms that undertake the vast bulk of investment and these farms generally have ready access to capital in the form of their own equity and debt and so while we expect to see ongoing investment in the farm sector we shouldn't be too worried that anticipated growth in demand in Asia necessarily means that farmers should start investing in land and equipment at a substantially greater rate than they have in the past. Now as Karen Schneider mentioned this morning it's also worth pointing out that investments mostly funded by family farm operators either in the form of equity such as retained earnings or debt and that this isn't likely to change quickly. The other equity capital category in this slide represents all equity capital provided to the business by people in their spouse and what it shows is that families remain the main source of capital used on Australian farms and that's true despite the significant consolidation of farm numbers and the growth in the average size of farms that's occurred over the last 20 years and despite significant purchases of farms by corporate and foreign entities. So it indicates that many of the transactions have been transfers of farms between corporate entities from families to corporates. The ongoing dominance of family farms in Australia and in other countries reflects the fact that family farms or more precisely owner operators are quite an effective business structure in agriculture. The effectiveness of the family farm models reflected in these results you saw this morning which show that among large farms families tend to outperform corporates in terms of operating returns. Now the most likely explanation for the superior performance of family farms is that they're operated by the people who own them and who have very strong incentives to maximise returns while managing exposure to risk and to do this with a relatively long term view. The challenge for corporates is designing incentives for managers and workers that encourage them to work hard, cut costs and take advantage of opportunities in the same way that owner operators do. Even though these workers have a limited if any equity stake in the business this is especially hard to do in farming because random changes in things like the weather, commodity prices and pest and disease pressures have big effects on profits but they can be hard to distinguish from those effects caused by variation in management skill and work commitment. Now there's a long history of trying to come to groups like this on corporate farms both in Australia and internationally some of the other speakers will tell us more about it. Now I want to finish up with some comments about risk and some of the work we've done to measure it. We've recently calculated distributions of returns generated by large farms in the cropping beef and dairy industries over the past 10 years. Now although performance on any individual farm will undoubtedly differ from the aggregate figures I'm about to show you, there's a good way to understand how farms perform as investments. Now the first thing you learn when you look at the distributions is that because returns in agriculture are so variable there isn't that much information in averages because the average doesn't occur very often. One way to understand risk is to calculate the probability of earning a rate of return less than the opportunity cost of capital. So this was 30% rates of return are lower than this 39% of the time for cropping farms 43% of the time for beef farms and 49% of the time for dairy farms. This means that in any 10 year period rates of return will be less than the opportunity cost of capital somewhere between 4 and 5 years on average. Now of course these years are compensated for by years with returns much higher than 5% from the table. But investors need to be aware that all 4 of these bad years might occur in a row and that this might just be bad luck and completely beyond the control of the manager. A lot of risk in farming is driven by variation in commodity prices and the climate and there are tools to help manage these risks but farming is highly exposed to uncontrollable variables and investors need to be aware that this will apply to them too. Buying a farm with a big farm with the latest technology might reduce your exposure to risk but considerable variability will remain and it's important to realise that this applies even though investments in farming usually involve a substantial real estate component. Now the estimates in this table include a period where there were some substantial increases in land values. When you exclude capital appreciation you can see the returns from the operation on business and the impact changes in the price of land have had in the ten year period that we're looking at. Now the most striking difference is for beef where the chances of making more than 10% become very low and the chances of making less than 5% balloon when we exclude the changes in the value of capital which is mainly changes in the price of land. It's obvious from this simple set of tables that there's wide variation in returns and that the operating and capital components of agricultural investments can have quite different characteristics. Understanding and managing this variability in returns is an important component of investing in agriculture. So to sum up farm cash incomes high in most regions supported by good livestock prices especially for cattle but also good crop receipts in most areas. Agriculture is receiving more attention in terms of potential investment but it seems unlikely the source of investment funding will change substantially. It will remain largely owner equity and debt held by banks and the owner operator models likely to dominate for some time to come but given the opportunities that exist there will be continued interest from new sources of capital and it's important they understand the risk profile of the various sectors within agriculture. Thank you.