The divergence is even sharper within cropping, the sector's long-term productivity leader, averaging 1.6 per cent annual growth since 1977/78 against 1.0 per cent across all industries combined. Queensland's cropping index jumped 37.5 per cent in 2024/25, WA lifted 33.7 per cent and NSW 27.4 per cent, on the back of well-timed rainfall and strong yields through the winter cropping window. South Australia's cropping productivity told the opposite story, falling 26.1 per cent as dry conditions cut into output, with Victoria down 20.3 per cent for similar reasons.
Beef enterprises showed a more muted version of the same pattern, with the Northern Territory up 10.6 per cent and NSW up 4.5 per cent, while Victoria fell 8.3 per cent and South Australia 5.9 per cent. Despite strong cattle prices, the national beef productivity index has grown just 0.6 per cent a year over the long run, underlining how much of the current strength is being driven by favourable conditions in northern production regions rather than a structural shift in the industry.
This period ABARES released a climate-adjusted index, which strips out seasonal effects which put the national figure at 139.23 for 2024/25, a fraction of the 188.67 actual reading. The gap suggests most of this year's national improvement reflects a favourable season rather than lasting gains in technology, management or scale. Western Australia showed a similar pattern, with a climate-adjusted index of 177.56 sitting well below its actual figure of 237.12.
South Australia stood apart. Its climate-adjusted index actually edged higher, from 171.81 to 173.80, even as its actual productivity fell sharply. That suggests the state's underlying farming capability held its ground and this year's weaker outcome was a function of conditions rather than any deterioration in the fundamentals that support land values over time.
For rural property markets, this kind of divergence carries a clear message. Strong productivity years in WA, NSW and Queensland reinforce buyer confidence in regions that have already seen firm demand through 2025, while a softer season in South Australia and Victoria is unlikely to shake the underlying investment case for well-located cropping and grazing country in those states. Seasonal swings of this kind are a normal part of the cycle, and buyers weighing land in the affected states are more likely to be guided by current commodity returns and transaction activity than by a single year's productivity read.
That commodity backdrop is particularly supportive for grazing country at present. Beef and lamb prices remain near record levels and while cropping has delivered the strongest productivity gains over the long run at 1.6 per cent a year against 0.6 per cent for beef and 0.4 per cent for sheep, current returns for grazing enterprises are being driven by strong demand and tight supply rather than productivity growth alone. That combination continues to underpin buyer appetite for grazing land even in states where this year's productivity figures were softer and helps explain why price growth and transaction interest across beef and sheep country have remained firm despite the mixed seasonal picture.