Farm incomes fell in 2012-13, DEFRA survey shows
Farm incomes in England fell across most farm types in 2012-13 as the effect of the poor growing season and harvest was felt across both cropping and livestock sectors.
Figures released by DEFRA show average farm business income (FBI) across all sectors apart from pig and poultry fell year on year to February 2013. This was mostly because of lower outputs, higher costs and a 12% drop in single farm payments due to the pound strengthening against the euro.
“These results highlight the financial impact of the appalling weather of 2012. Whether it was reduced output or higher feed bills, the bottom line for many farmers will have taken a hit,” NFU chief economist Phil Bicknell said.
“Nor should we forget that the weather of 2012 will shape farming’s fortunes in 2013-14, particularly the knock-on impact of planting problems last autumn on this year’s cropping. Financially, this year is likely to be another tough one for some farming sectors,” he added.
Cereals
Average business income fell by just over 25% to about £68,000. “Both the yield and quality of cereal and oilseed rape crops were affected by the poor growing season but a substantial increase in prices driven by global markets meant that overall output from the crop enterprises, particularly winter barley, increased,” said DEFRA in the farm business income report.
However higher input costs, particularly for seed, fertiliser and crop protection had offset this, resulting in a net fall in average incomes, the report added.
General cropping
Average incomes on general cropping farms fall to a lesser extent, at about 9%, than those on cereal farms. This was due to a higher output from potatoes, but falls in other enterprises, such as sugar beet, saw total agricultural output fall.
“This reflects changes to the sample with a smaller average cropping area compared to the previous year. Input costs also fell although this can also be attributed to a reduced tillage area,” said the report.
On a per hectare basis, agricultural costs on these farms had increased in line with those on cereal farms, it added.
Dairy
Average FBI fell substantially by about 40% to £51,000. While agricultural output was higher, due to higher milk prices, input costs increased to a greater extent, particularly for feed.
“This is likely to reflect increased volumes as well as higher prices for purchased feed and forage due to a combination of reduced grazing days and lower quality home produced forage,” the report said.
Livestock
Lowland and less favoured areas both saw large falls.
“Lower livestock output reflecting lower sheep prices in 2012, combined with higher costs, resulted in a 48% fall in incomes on lowland grazing farms and a 33% fall for LFA grazing livestock farms,” the report said.
“Both these farm types failed to make a positive return from agriculture reflecting the difficult conditions for beef and sheep farmers throughout the year.”
The lower exchange rate for the single payment also represented a noticeable reduction in receipts for these farm types, it added.
Mixed
Mixed enterprise incomes fell by nearly 50% to about £38,000, with output falling a quarter. Total costs fell 15%, however this was likely due to changes in the sample compared with last year.
Pigs and poultry
Pig farm output increased, with a smaller increase in costs than expected, leading to an increase in FBI of 8% on this farm type.
For specialist poultry farms, average incomes more than doubled due to a substantial increase in output, according to the report. Although egg prices increased, average output from eggs was unchanged due to a fall in production, it said, and input costs also increased on these farms but to a lesser extent than output.
However, the sample size was relatively small for these sectors, so individual farms could have a large influence on the results, the report advised.
The full report is available at DEFRA’s website
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