Overview This report presents the detailed financial performance estimates for lamb-producing farms for 2015-16, 2016-17 and 2017-18, and discusses incomes, investment, farm debt, and costs of production in a historical context. The report draws on data from the ABARES annual Australian Agricultural and Grazing Industries Survey (AAGIS). The report was commissioned by Meat & Livestock Australia (MLA). The report will be published as a series of chapters online throughout the year. The web-reports are a new format for publishing this information - aimed at delivering information to stakeholders as the chapters are completed rather than as one annual report. Farm financial performance (published 17 May 2018) This chapter presents estimates of the incomes, profits, costs and rates of return for lamb-producing farms. Key Issues Average farm cash income of Australian lamb-producing farms is projected to decrease by around 5 per cent in 2017-18 to $273,000 per farm. Farm cash income in 2017-18 is projected to be the second-highest in over 20 years, an estimated 66 per cent higher than the average between 2000-01 and 2016-17 (in real terms *). The expected decline in incomes is a result of lower crop receipts partly offsetting higher prices for lambs, sheep and wool. Farm debt and equity (published 31 May 2018) This chapter presents estimates of the debt, equity, and debt-servicing capacity for lamb-producing farms. Key Issues Average farm debt of Australian lamb-producing farms increased by around 14 per cent to $815,000 in 2016-17 (in real terms*). Average farm debt for lamb-producing farms is projected to increase further in 2017-18. The average equity ratio of lamb-producing farms has trended downwards slightly over the 10 years to 2016-17, averaging around 86 per cent. The proportion of farm receipts needed to fund interest payments is projected to increase to around 5 per cent in 2017-18. Farm capital and investment (published 3 July 2018) This chapter presents estimates of farm capital and farm investment for lamb-producing farms. Key Issues The total value of capital for Australian lamb-producing farms increased by 115 per cent in real terms from 2000-01 to 2016-17. On average, 66 per cent of lamb-producing farms each year made additions to their total capital over the 10 years to 2016-17. Physical characteristics (published 27 July 2018) This chapter presents estimates of physical characteristics for lamb-producing farms. Key Issues From 2000-01 to 2016-17 the total number of Australian farms producing lambs for slaughter fell by 12 per cent. Most of this decline was in Victoria and New South Wales. The number of lambs sold per farm increased as part of a long term shift in production from wool to lambs. Cost of production (published 31 May 2018) This chapter presents and discusses cost of production estimates for lamb-producing farms. Key Issues Average on-farm per kilogram live weight cost of sheep production increased between 2015-16 and 2016-17, mainly as a result of increase in prices paid for sheep and lambs purchased. * Note: real dollar values are adjusted to remove the effect of inflation.