Farm Business Income 2013/14

Most sectors of agriculture sawa fall in profits in 2013/14 compared to the previous year.  This is according to the latest Farm Business Survey (FBS) results released by DEFRA.  These results relate to England and update the provisional ones released earlier in the year (see February article).  The FBS works on February/March year ends so the period being reported covers harvest 2013.  The full release can be found at – https://www.gov.uk/government/collections/farm-business-survey

Farm Business Income (FBI) can be thought of as the average farm profitability for the sector.  For cropping farms the wet autumn of 2012 continued to affect profitability as growers struggled to drill and many moved to spring cropping.  Weakening global markets also hit grain prices, this combination of lower yields and lower prices let to Cereal farms seeing a 28% in returns in real terms year-on-year.  Dairy farms’ profitability improved significantly, the lower grain prices played their role by reducing feed costs, but the biggest influence was the increase in milk prices.  This saw returns increase 64% between 2012/13 and 2013/14.  Grazing Livestock farmers in the lowland and LFA saw their FBI drop by 8% and 24% respectively.  The poor autumn of 2012 followed by the late cold spring meant reduced output and more reliance on purchased feed.

The figures for the years 2009/09 to the present year are shown on the chart below.    Those for 2014/15 are Andersons current predictions – the first DEFRA estimates will be published in January. 

Also shown on the chart is a breakdown for the two years 2012/13 and 2013/14.  This shows how the total farm profit for each farm type is made up, based on four ‘profit centres’.  For Cereals and General Cropping farms the drop in profit from agriculture in 2013/14 can be clearly seen; the year was so bad in fact that over half of all cereal farms made a loss from their farming operation. The agricultural activity on both types of Grazing Livestock farm was yet again loss-making with heavy reliance on diversification.  Reducing subsidy incomes the next few years could make life even tougher for these farms. 

 FARM BUSINESS INCOME (ENGLAND) – Source: Farm Business Survey