Big rise in dairy and lowland beef and sheep incomes forecast

DAIRY and lowland livestock grazing farms in England are see to see substantial increases in income in the current financial year, the latest Defra estimates show.

Average incomes on arable, mixed, dairy, upland and lowland beef and sheep farms are all forecast to rise in 2011/12. But pig and poultry farms and those classified as ‘general cropping’ will suffer drops in incomes fall, Defra Farm Business Income figures show.

In summary the provisional figures for England (not inflation adjusted) show:

  • Dairy 2011/12 average incomes up 27 per cent to £84,000 on 2010/11.
  • Cereals up 6 per cent to £90,000.
  • Grazing Livestock (Lowland) up 30 per cent to £28,000.
  • Grazing Livestock (LFA) up 12 per cent to £24,000.
  • Mixed farms up 7 per cent to £54,500.
  • General cropping down 24 per cent to £85,000.
  • Specialist pigs down 20 per cent to £35,500.
  • Specialist poultry down 8 per cent to £62,500.

Defra statisticians attributed the ‘substantial’ increase in dairy farm incomes to a 10 per cent rise in milk prices, combined with firmer prices for breeding heifers, beef cattle and cull cows.

The improved fortunes for upland and lowland grazing livestock farms are largely the result of firmer prices for fat and store cattle alongside continuing high values for finished lambs, cull ewes and replacement breeding sheep.

The value of beef animals, in particular, is considerably higher than a year ago, explaining why lowland farms are benefitting more than LFA farms, where sheep account for more of output.

In the cases of both dairy and grazing livestock these increases in output have more then offset rising costs, particularly for feed and fertiliser

The slight increase in cereal farms incomes forecasts is put down to much higher incomes derived from oilseed rape crops due to increased area, yield and prices. Output from cereals is also expected to increase due to higher wheat and barley prices and slightly higher wheat yields.

Pig farms are set to suffer a second successive big  fall in income as soaring feed costs, which account for more than half of overall costs, continue to outweigh higher prices.

It is a similar story on poultry farms, where higher output from the egg and broiler sectors will be offset by increased costs, mainly of feed.

The predicted fall in general cropping income is primarily due to lower output from potato producers as favourable spring planting conditions and subsequent high yields in 211 resulted to lower prices.

NFU chief economist Phil Bicknell said the forecasts are in contrast to the performance of the wider economy, underlining agriculture’s contribution to it. “This is undoubtedly positive news for parts of the industry,” he said. 

But he cautioned that, while the figures were welcome, the continued rise in input costs and the Eurozone crisis means ‘there’s no room for complacency’.

“Not all farm types saw improvements to their bottom line. All farmers have faced significantly higher operating costs over the last year, with the 18 per cent increase in fuel costs and the 20 per cent rise in fertiliser prices the most significant,” he said.

He added that the figures also mask ‘much variation’, with, for example, some parts of the country affected more than others by drought conditions in 2011.

·        The 2011/12 forecasts, which include 2011 harvest and SPS data,  are based on information available in early January for prices, animal populations, marketing, crop areas and yields.

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