Farm Incomes Drop November 3, 2016 12:00 am Farming profits declined in almost all sectors in 2015/16. This, perhaps unsurprising, finding comes from 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 January article). The FBS works on February/March year ends so the period being reported covers harvest 2015. The full release can be found at – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/562946/fbs-businessincome-statsnotice-27oct16.pdf Farm Business Income (FBI) can be thought of as the average farm profitability for the sector. As shown on the chart below, most sectors saw a fall in returns in 2015/16 compared to 2014/15. The total height of the bar gives illustrates the overall FBI. The only sectors to buck the trend were General Cropping and LFA Livestock. Looking ahead, the figures for the current 2016/17 year (in light blue) are Andersons estimates. These show a mixed picture, but with further drops forecast for cereals farms and, notably, the dairy sector. The first DEFRA estimates for 2016/17 will be published in February. it can be seen that, for almost all sectors, profitability is well-down on the average for the five years 2007/08 to 2011/12 (the dark blue columns). The chart shows a breakdown of where the profit comes from for the years 2012/13 to 2015/16, based on four ‘profit centres’. For Cereals and the two Grazing Livestock farm types it can be seen that the return from agriculture was negative in 2015/16. It took part of the Basic Payment to return these farms to profit. Of course, FBI is only an average for the sector. The range in performance across farms is vast, and the more efficient units are likely to have made a much better return than these average values show. FARM BUSINESS INCOME (ENGLAND) – Source: Farm Business Survey
