Farm profitability in the south-east has dropped by two-thirds, according to the University of Reading’s annual Farm Business Survey.

The agriculture and food investigation team have published results for the 2004 harvest year, which revealed that average profitability fell from 15,242 in 2003 to 5521 in 2004.

Two-thirds of farms failed to make any profit at all.

Among the dairy farms in the survey, small specialist producers incurred an average loss of 7000 per farm.

By contrast, larger specialist milk producers generated a positive margin of 43,000.

The lower prices associated with most crops harvested in 2004 also led to a significant fall in profitability on arable farms.

Small predominantly cereal farms recorded average losses of over 10,000 compared with an average margin of just over 12,500 achieved by their larger neighbours.

Poor results were again evident on the lowland cattle and sheep farms in the survey with an average loss of almost 11,000 per farm.