Hill sheep farmers in Wales saw incomes rise 56% last year, but returns for lowland dairy farms dipped by 15%.

According to the latest findings of the annual Farm Business Survey in Wales the sheep sector as a whole experienced a major leap in incomes, but falling milk prices contributed to a decline in the fortunes of milk producers.

The survey, conducted by the Aberystwyth-based Institute of Biological, Environmental and Rural Sciences, covered a representative sample of 565 farms from across Wales with financial years ending between December 2009 and April 2010.

Of those 49% were owner-occupied, 8% were wholly tenanted and 43% were of mixed tenure. In all, there were 127 dairy herds, 295 beef cattle herds and 389 sheep flocks involved.

For hill and upland dairy farms, the results showed an increase in farm business income (FBI) of 7% with the value of both outputs and inputs rising by around 20%. The milk price fell from 25.67p/litre to 22.77p during the period, a decrease of 11%.

On lowland dairy farms the value of outputs fell by nearly 3% compared to a 22% increase last year while the cost of inputs rose by 2% over the same period. The milk price fell from 26.51p/litre to 23.13p – a fall of nearly 13%.

Hill sheep farm output rose by 16.5% and inputs increased by 4%, leading to an increase in FBI of 56%.

On hill cattle and sheep farms the total value of outputs rose by 14% and inputs were up by 7%/t. The FBI rose by 37%.

Upland cattle and sheep farms recorded an increase in the value of outputs by 9% between 2007-2008 and 2008-2009, while inputs rose by 7%. The result was an increase of 19% in FBI.

The value of outputs on lowland cattle and sheep farms rose by 9%, while inputs increased 8%. The FBI increased by 13%.