THE average mixed farm in southern NSW has lost between $350,000 and $450,000 in income during the past three years, according to Albury private agronomist John Sykes.
He said the loss, calculated on an average 1100ha mixed farm, represented a 12 per cent decline in equity.
Mr Sykes said farmers had some hard decisions to make on inputs and costs.
"We have got to look hard at the crops which are not returning us a quid," Mr Sykes said.
"If growers are not aiming for 95 per cent of potential yield, their profit will drop off."
Speaking at a Riverina pre-season cropping forum last week, Mr Sykes said choosing to reduce fertiliser inputs this year could affect the ability of the business to recover from the dry seasons.
He said an option may be to start with lower levels of inputs than last year and top-dress as the season progressed.
"With average seasonal conditions, a farm business with 50 per cent equity is better off trying to hang on," he said.
"But if dry conditions continue, the answer may be getting equity up to 80 per cent."
Mr Sykes said alternative crops, including canola, had proved to be money-wasters in dry years, with just a third making an average gross margin.
"They are becoming expensive fallow crops," he said.
"Many people haven't made any money from canola in the last four years. Growers need to calculate on a break-even point of 0.4 tonnes/ha.
"It is best to spread the risks over lupins, canola and peas."
Mr Sykes urged growers to budget carefully when it came to chemicals and fertiliser but he estimated it would be 25 per cent cheaper to put in a crop this year.
He said wheat prices would range between $180 a tonne and $330 a tonne.
He said he expected canola to average $500 a tonne, triticale and barley, $200, hay, $150, and lupins, $350.
"At these prices, growers need a wheat yield of 1.6 tonnes a ha to break even," he said.
"The profits are still good but we are not out of the game altogether and have got to be careful.
"I'm not favouring we will have a fourth dry year in a row.
"My feeling is the year will be slightly above average."
National Australia Bank agribusiness manager Barry Membrey said banks remained bullish about the agribusiness sector.
"We believe the global food crisis will pull agribusiness out of the global financial crisis," he said.
"If growers are not 100 per cent comfortable with their financial position, (they should) get a second opinion from another bank or a financial counsellor to weigh up their options."
