Farm incomes in Wales are expected to drop by 15% for 2018-19 because of the fall in milk prices and higher feed costs, according to latest forecasts from the Welsh government.
Provisional figures suggest average farm business income across all farm types is expected to fall from £35,500 in 2017-18 to £29.500 in 2018-19, after a challenging 12 months.
Dairy farms are forecast to see the biggest drop in cash terms, with average farm business income expected to fall from £84,500 to £64,500 due to the reduction in milk prices in 2018 and higher costs.
Incomes on lowland cattle and sheep farms are also forecast to drop to £17,000 a farm, driven primarily by a negative valuation change because of lower sheep prices at the end of the year.
Incomes on Less Favoured Area (LFA) cattle and sheep farms are forecast to be down by about 9%.
While the value of the beef output on lowland farms is forecast to be slighter higher than in 2017-18, input costs are expected to be higher because of the increase in feed and other livestock costs.
John Davies, NFU Cymru president, said the forecasts showed just how challenging the past year had been, with farmers struggling as a result of the long, wet winter in 2017-18, followed by last summer’s drought.
“These figures once again show the volatility all farm types in Wales are subjected to, and reinforces the need for future agriculture policy in Wales to include a central volatility/stability component, alongside public goods and productivity measures, that help farmers be able to manage and mitigate the impact of this volatility.
“It is only from a position of financial stability that farming businesses can have the confidence, and are able, to invest in new technology and productivity measures.”
Final figures for 2018/19 will be published in December 2019.