Value of Agricultural Commodities Produced (VACP) EXPLAINED
What is VACP?
The objective of the Value of Agricultural Commodities Produced (VACP) series is to value the annual production of agricultural commodities.
VACP has three major categories:
- the value of crop production
- the value of livestock disposals (domestic slaughtering and exports of live animals)
- the value of livestock products (including wool, eggs and whole milk)
Data used in calculating VACP comes from multiple sources:
- Buyers of agricultural commodities. There are many sources including VACP surveys of grain merchants, fruit and vegetable processors, cotton ginners, nurseries and sugar mills.
- Other ABS Surveys, such as Livestock and Poultry Slaughtering and Wool Receivals.
- Administrative data sources, such as exports data, fruit and vegetable market reports and newspapers.
- Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and industry sources are used, where available, for comparative purposes.
How is VACP calculated?
Gross value is the value placed on recorded production at wholesale price(s) realised in the market place. The market place is defined, in general, as the point(s) of valuation of a commodity where ownership of the commodity is relinquished by the agricultural sector. Local value is the value placed on recorded production at the place of production, including indirect taxes. The ABS produces only Gross Value estimates for preliminary release.
Market prices are sourced from ABS collections and reported industry information. A weighted market price is derived if both quantity and price data are available, otherwise the market price is a simple average of reported price point data.
The gross value (GV) of a commodity is calculated by summing the derived market values.
Using Bananas as an example, assuming annual recorded production is 50 tonnes and the market distribution is as shown in the table below:
Example of calculating gross unit value (GUV)
| Market | Production quantity (tonnes) | Market value ($) | Average market price ($) |
| Fresh fruit | 5 | 5,000 | 1,000 |
| Factory input | 30 | 6,000 | 200 |
| Overseas exports | 15 | 18,000 | 1,200 |
| Total all markets | 50 | 29,000 | derived GUV = 580 |
Each market value is calculated by multiplying the allocated production quantity data by the weighted average market price.
The derived gross value of Bananas is $29,000 (sum of derived market values) and the derived average Gross Unit Value is $580 [derived gross value ($29,000) divided by total recorded production (50 tonnes)].
Marketing costs are the costs of moving the agricultural product from the place of production (i.e. farm) to the market place. These include freight, cost of containers, commission, insurance, storage, handling and other charges necessarily incurred by the producer in delivering commodities to the market place.
Local value is the value placed on recorded production at the place of production, including indirect taxes. The local value of a commodity is calculated by subtracting total marketing costs from gross value.
How often is it collected/released?
Data is collected and released annually. VACP preliminary data are generally published within five months of the reference period, and at the same time as the preliminary agricultural production data in Principal Agricultural Commodities, Australia (cat. no. 7111.0). Final data follows, approximately seven months after preliminary data has been released.
At what geographical level is the data released?
The commodity values are initially published at the state level so as to allow comparison between States and Territories and at the national level to give a total recorded agricultural production value for the year and to allow trend analysis against previous years. Subsequent releases follow at the Natural Resource Management (NRM) and Statistical Area 4 (SA4) level in Agricultural Survey years, as well as at the Statistical Area 2 (SA2) level in Agricultural Census years.
Some useful terms
Gross Value (GV)
Gross value is the value placed on recorded production at wholesale price(s) realised in the market place.
Gross Unit Value (GUV)
Is the per unit value of the above GV. It is the weighted average unit price of production at wholesale prices realised in the market place.
Local Value (LV)
Local value is the value placed on recorded production at the place of production, including indirect taxes.
Local Unit Value (LUV)
Is the per unit value of the above LV. It is the weighted average unit price of production at the place of production, including indirect taxes.
Marketing Costs
Marketing costs are the costs of moving the agricultural product from the place of production to the market place. They include freight, cost of containers, commission, insurance, storage, handling and other charges necessarily incurred by the producer in delivering commodities to the market place.
Market Place
The market place is defined, in general, as the point(s) of valuation of a commodity where ownership of the commodity is relinquished by the agricultural sector.
Markets include:
· Local
· Overseas exports
· Factory input
· Interstate exports
· Statutory marketing authorities
· Retained on farm
· Any other known markets
Reference Period
The reference period refers to the year ended 30 June. Values are in respect of production during the financial year irrespective of when payments are actually made.
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