Farm Incomes

England

Defra has released its provisional estimates for farm business income (FBI) by type of farm in England for 2012/13. It will come as no great surprise that the 2012 year has not been as profitable as 2011. The table below shows that all sectors (apart from poultry) have experienced a fall in incomes. This is largely due to the weather making it such a difficult growing season, but also feed cost increases.

Although prices for cereals were higher, average yields were lower and the issue over quality has been well documented, meaning the income many received was lower. The wet weather meant spray costs increased and also fuel due to increased field operations and drying grain. General cropping farms will also have experienced similar problems. The substantial increase in potato prices is expected to offset the fall in yields and output is expected to actually see an increase. However, growing and harvesting costs are forecast to have increased by even more, resulting in an overall reduction in incomes.

Incomes from dairy farms fell by 44% in real terms in 2012. Average milk prices increased by 1% over 2012, taking it to record levels following the dips during the summer of 2012. But large rises in the costs of inputs most notably feed, and also an increase in the volumes of feed purchased due to poor quality forage will more than offset this rise in milk price. Grazing livestock farms saw the largest falls in percentage terms, with lowland and less favoured areas (LFA) units falling by 45% and 53% respectively taking average incomes to their lowest levels for four years.

Scotland

The Scottish Government released information on two provisional income measures; total income from farming (TIFF) and the average FBI for 2011/12. Initial estimates for 2012 show TIFF falling by £111m to £635m, a 19% fall in real terms. The figures for 2012 show output increasing year-on-year for barley, finished cattle and milk products, but a reduction for wheat, potatoes, OSR, poultry and finished lambs, with the weather impacting on yields and lower prices for lambs. Total input costs for 2012 have risen by £44m (2%) compared to 2011 levels. The main increases are from...