Farm Business Incomes

Farm profitability fell considerably for arable and dairy farms in the 2023/24 year according to the latest Defra statistics.  Other livestock sectors did rather better with returns similar to the previous year.

These results come from Defra’s first estimates for Farm Business Income (FBI) for the year 2023/24 (March to February).  These include the 2023 harvest and 2023 BPS.  They are preliminary estimates at present, with more detailed figures due to be published in November.  Although titled ‘income’, what the data shows is average net profit for a typical farm in each sector.  The chart below summarises the data for the past few years – all figures are in real terms at 2022/23 prices.

An average is first given for the five years 2014/15 to 2018/19.  The data for the four following years has been split into the contribution from each of four profit centres. It shows how important subsidy income (BPS and agri-environmental income) is to the profitability of some sectors of English farming.  The light blue columns are the latest figures just released.

There are some big drops in FBI for Cereals, General Cropping and Dairy farms.  These fall by 79%, 61% and 80% respectively.  However, it can be seen that profits in both the 21/22 and 22/23 years were unusually high for these sectors.  Whilst there is an element of ‘reverting-to-the-mean’ it can be seen that profits in 2023/24 are estimated to be lower than long-term trends.  There was relatively little change in Grazing Livestock returns (beef and sheep).  Pig profits rose by 24%.  Defra has not made an estimate for FBI in the Poultry sector, so the figure shown on the chart is our forecast.

For the 24/25 year just starting, it currently looks like being a ‘up horn, down corn’ year.  Low prices in the arable sector will be compounded by low yields in many cases due to the weather.  Lower grain prices should help the livestock sector due to reduced feed costs. 

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