Farm income swings highlight volatility challenge
Defra’s latest farm income figures show huge swings in farm profitability across the different farming sectors.
The figures, based on March 2013 to February 2014, show dramatic falls for arable farms while dairy, pigs and poultry have made gains.
See also: Farm incomes fell in 2012-13, Defra survey shows
| Net income for farms of various type (average £/farm) | ||
|---|---|---|
| Farm type | 2012-2013 | 2013-2014 |
| Cereals | 49,400 | 30,700 |
| Gen crops | 72,100 | 50,100 |
| Dairy | 36,000 | 73,100 |
| Poultry | 105,000 | 168,000 |
| Pigs | 41,800 | 64,400 |
| Grazing livestock | ||
| – Lowland | 6,600 | 4,800 |
| – LFA | 10,400 | 6,000 |
| Source: Defra | ||
The NFU said the changes in fortunes reflected the challenging volatility facing farmers. The union also said that the incomes did not reflect the current market or changes in recent months, most notably the dramatic downturn in the fortune of the UK’s dairy industry.
NFU deputy president Minette Batters said: “Commodity markets and prices have seen considerable fluctuations since the last dataset released from February, on top of high levels of volatility in the UK and global markets.
“The long-term prospects for agri-food are positive, but we can’t plan for tomorrow if we can’t survive today’s challenging conditions.”
Minette Batters, NFU deputy president
“Wheat prices which have fallen by 30% since this time last year; global dairy commodities which are down 45% since their peak in February and UK beef prices fell to three year lows earlier this summer.”
Ms Batters added: “The dynamics of agricultural commodity markets have shifted and this really is a new trading environment for all in the food chain. It’s essential that we have a long term approach in our farm businesses given the long production cycles involved, and we need to see a similar injection of longer term thinking from our partners in the supply chain.”
She also pointed out that while CAP payments helped farming businesses manage volatility it should be recognised that levels of support were diminishing.
“This means the government has a greater role to play.
“Extending tax averaging and fiscal measures such as capital and infrastructure allowances can all help to lessen the turbulence in farm businesses and ensure consistent investment patterns. The long-term prospects for agri-food are positive, but we can’t plan for tomorrow if we can’t survive today’s challenging conditions.”
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