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 the 2011 one.  The graph below shows that all sectors 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 reduced.  The wet weather meant spray costs increased and also fuel due to increased field operations and drying corn.  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 are forecast to fall by 44% in real terms compared to last year.  Average milk price is expected to have increased by 1% over the year taking it to record levels (see Livestock Section below) following the lows of 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 are forecast to see the largest falls, with lowland and LFA units falling by 45% and 53% respectively.  Although cattle prices have remained firm, sheep have fallen quite dramatically.  Coupled with increasing feed costs, this will see average incomes fall to their lowest levels for four years.