Defra’s forecast of farm incomes for the March 2015 to February 2016 year points to significant falls for average farm businesses, particularly those with cereals, dairy and pigs.
Farm Business Survey information, based on January 2016 prices, predicts a 24% reduction in cereal farm incomes to £34,000 (£45,000 in the previous year); 45% in dairy incomes to £46,500 (£83,800); and 46% for specialist pig units to £26,500 (£49,400). General cropping units are set to fall 17% to £43,000.
Specialist poultry units are predicted to see a 14% increase in incomes to £145,000 (£126,800), helped by lower input prices; lowland grazing systems are 8% up to £20,000 and less favoured area (LFA) grazing 47% higher at £21,500. General mixed farms are up 4% to £22,500.
The 2015 Basic Payment is 8-9% lower than the 2014 value, except on LFA units which saw an increase.
“The cash flow problems this creates for agriculture should be a worry for all in the agri-food sector,” warns NFU president Meurig Raymond. “Farmers need to be profitable so that they can reinvest in the future. The reality is that low profitability and falling confidence should be a wake-up call for everyone and it’s the antithesis of a sustainable framework for the UK food industry.”