Published 29 January 2015
Forecasts of Farm Business Income by type of farm in England – 2014/15
Data on farm business incomes are used to monitor and evaluate Government and EU
policies and to inform wider research into the economic performance, productivity and
competitiveness of the agricultural industry. The data are provided to the EU as part of the
Farm Accountancy Data Network (FADN) and are widely used by the industry for
benchmarking.
This statistical notice provides forecasts of Farm Business Income for 2014/15 alongside
results from the Farm Business Survey for the years 2009/10 to 2013/14 (Table1). These
figures are for March/February years with the latest estimates covering the 2014 harvest
and including the 2014 rate of Single Farm Payment (which is included within total farm
output and therefore contributes to Farm Business Income). Actual survey results for this
time period will be published at the end of October 2015.
The forecasts for 2014/15 are derived from information available in early January 2015 for
prices, animal populations, marketings, crop areas, yields and input costs and are intended
as a broad indication of how incomes for each farm type are expected to move compared
with 2013/14. The forecasts are subject to a margin of error, reflecting, in particular, the fact
that farm income is derived as the relatively small difference between total output and total
input; small percentage changes in either of these can result in large percentage changes
in income. It should also be noted that within each year there is a wide range in income
across farms around the average figures published here.
Key points

Average Farm Business Income is expected to fall or remain broadly similar across
all farm types. This is due to lower prices for key outputs such as milk, cereals, eggs
and meat, offset to some extent by lower input costs, particularly for animal feed, fuel
and fertiliser.

The Single Payment for 2014 was around 7% lower than in 2013 primarily due to a
stronger pound.

These forecasts are provisional, and based on information available up to January
2015. Outturn figures, published in October 2015, might differ significantly to these
forecasts. See “Accuracy and reliability of results” section on Page 4 for more
details.
Enquiries to: Selina Matthews, Department for Environment, Food and Rural Affairs, Area 1A Nobel House,
17 Smith Square, London SW1P 3JR. Tel: ++ 44 (0)20 7238 3274,
email:[email protected]
A National Statistics publication. National Statistics are produced to high professional standards. They
undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free
from any political interference. For general enquiries about National Statistics, contact the National Statistics
Public Enquiry Service: tel. 020 7533 5888; email [email protected] You can also find National Statistics
on the internet at www.statistics.gov.uk
Detailed results
On cereal farms average incomes in 2014/15 are expected to remain similar to those in
2013/14 at around £50,000. Cereal and oilseed rape values for the 2014 harvest have
been considerably lower than those for the 2013 harvest as a result of record harvests
around the world, plentiful global stocks and a stronger pound. Despite firmer values in
recent weeks as global markets responded to partial export restrictions in Russia, average
values are still expected to be lower for the 2014 crop. However the return to more normal
cropping rotations, with a larger proportion of higher yielding winter crops, is expected to
have offset these lower prices. Total input costs are also forecast to be similar to the
previous year with lower input prices for items such as fuel and fertiliser being offset by
increased volumes due to the increased area of winter crops. On general cropping farms
incomes are forecast to fall to around £56,500 primarily due to a lower output from potatoes
and field vegetables. Sugar beet output is expected to be higher due to a 13% increase in
price for the 2014/15 crop.
Average incomes are expected to fall by around 11% on dairy farms in 2014/15 to
£78,000. Milk prices fell considerably during the second half of 2014; in December 2014 the
average UK milk price was 18% lower than a year earlier. However, for the year as a whole
(March to February) higher prices in the first half of the year together with high volumes, will
have partially offset the reduction seen in recent months. The average fall in milk price for
2014/15 as a whole is therefore expected to be 6%. Volumes of milk production have also
increased with producers responding to the high prices seen in late 2013 and the early part
of 2014. At the UK level, milk production for 2014/15 is currently 7% ahead of last year.
Output from beef, which is a significant enterprise on many dairy farms, is also expected to
be lower due to a fall in finished cattle prices. Input costs are also expected to fall,
particularly for feed, reflecting lower cereal and soya prices. Current indications are that
volumes of purchased dairy feed are unchanged compared to last year which may reflect
the quality of conserved forage as well as an increase in average herd size.
Average incomes on Grazing livestock farms (lowland and less favoured area) are
expected to increase slightly in 2014/15, albeit from a low base. Despite higher throughput
and heavier carcase weights for finished cattle and sheep, average prices have been lower
thus reducing enterprise output. Prices for yearling store cattle have been similar to the
previous year but throughput has also been lower, possibly reflecting reduced productivity
from 2013 as well as a smaller beef suckler herd. Total input costs are expected to fall for
both these farm types, more than offsetting the lower output from livestock enterprises and
thus resulting in higher incomes. The increases are marginal and amount to a 6% increase
for Lowland Grazing Livestock farms and a 14% increase for LFA Grazing Livestock farms.
Feed costs are likely to reflect lower volumes as well as prices due to more favourable
grazing and forage harvesting conditions during 2014.
Average Farm Business Income is forecast to fall by around 20% to £51,500 on specialist
pig farms. Data for finished pig prices indicate an average fall of 7% which is expected to
be partially offset by higher throughput and carcase weights. Input costs are also expected
to fall particularly feed which represents almost half the total costs on these farms. A
change in livestock valuation is also responsible for some of the fall in income forecast for
2014/15 as the value of weaners and store pigs is estimated to be around 13% lower at
closing, compared to opening, valuation.
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Forecasts for specialist poultry farms are subject to a considerable degree of uncertainty
reflecting both the structure of this sector and the relatively small sample of these farms in
the FBS. Despite an increase in throughput, lower egg and broiler prices are expected to
reduce total farm output on specialist poultry farms. This is expected to be partially offset
by lower input costs, particularly feed which is a key input on these farms. Average
incomes are therefore expected to fall by 11% to around £140,500.
Incomes on mixed farms are forecast to fall by 14% in 2014/15 to £25,500. These farm
types reflect all the enterprises found in the more specialist farm types reported above.
Enterprise output for both the livestock and cropping enterprises are expected to fall.
Although input costs are also forecast to fall this is to a lesser extent than output resulting in
a fall in incomes for farms within this farm type.
Table 1: Average Farm Business Income by Type of Farm in England (£/farm)
Average farm business income per farm (£/farm)
Farm Type
2009/10 (a) 2010/11 2011/12
2012/13 2012/13(b)
2013/14
2014/15
forecast
Annual %
Change
2014/15
compared
to 2013/14
At current prices
Cereals
General cropping
Dairy
Grazing livestock (Lowland)
Grazing livestock (LFA)
Specialist pigs
Specialist poultry
Mixed
43,200 84,100 93,700
67,800 110,200 100,500
59,000 65,800 86,600
28,600 21,300 32,000
27,500 21,800 29,200
70,300 44,300 38,100
91,300 72,700 46,400
32,400 50,300 74,100
68,200
91,500
51,200
16,300
19,700
40,900
94,200
38,100
67,700
89,200
52,600
16,100
18,700
41,700
90,200
37,300
49,600
67,600
87,800
15,100
14,500
65,200 (d)
157,200 (d)
29,600
51,000
56,500
78,000
16,000
16,500
51,500
140,500
25,500
3%
-16%
-11%
6%
14%
-21%
-11%
-14%
48,100 90,700 98,900
75,400 118,900 106,100
65,700 71,000 91,400
31,800 23,000 33,800
30,600 23,500 30,800
78,200 47,800 40,200
101,600 78,400 49,000
36,100 54,300 78,200
70,800
95,000
53,200
16,900
20,500
42,500
97,800
39,600
70,300
92,600
54,600
16,700
19,400
43,300
93,700
38,700
50,600
69,000
89,600
15,400
14,800
66,500 (d)
160,400 (d)
30,200
51,000
56,500
78,000
16,000
16,500
51,500
140,500
25,500
1%
-18%
-13%
4%
11%
-23%
-12%
-16%
In real terms at 2014/15 prices
Cereals
General cropping
Dairy
Grazing livestock (Lowland)
Grazing livestock (LFA)
Specialist pigs
Specialist poultry
Mixed
Years ending in end-February
(a)
Revised w eighting framew ork separating specialist poulty meat from specialist poultry layers
(b)
Farm typology based on 2010 standard output coefficients
(c)
Uses GDP deflator
(d)
The sample sizes for specialist pig and poultry farms are relatively small. There is one very influential poultry farm in 2012/13 and 2013/14. If this is excluded from the
results, average income on poultry farms increases by 31% betw een 2012/13 and 2013/14 from £76,000 to £99,800 per farm.
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Accuracy and reliability of results
The forecasts provided for 2014/15 are provisional, based on information available in early
January 2015 for prices, animal populations, marketings, crop areas and yields. The
relative changes, compared to the previous 12 months, are then applied to aggregate data
from the most recent Farm Business Survey for each robust farm type. A level of estimation
is necessary, particularly for variables where no market information is available. Outturn
results (which will be published in October 2015 based on results for the 2014/15 FBS),
could differ from these forecasts for several reasons. These include changes to the sample
and to the weighting framework. In 2013/14, of the 1,889 farms that were included in the
FBS target population around 198 farms came into the panel that weren’t present in
2012/13. In addition, the FBS weights are refreshed each year in line with the latest farm
population data from the June survey. Table 2 compares the forecasts made in January
2014 to the survey results published in October 2014
Table 2: Revisions to Farm Business Income by Type of Farm in England
Average farm business income per farm (£/farm)
Farm Type
2013/14
January 2014
Forecast
2013/14
October 2014
Outturn
95%
Confidence
Limits
% Change
49,000
84,000
101,000
19,000
26,000
78,000
103,000
35,000
49,500
67,600
87,800
15,100
14,500
65,200
157,200
29,500
+/- 9,600
+/- 13,500
+/- 9,700
+/- 3,200
+/- 3,700
+/- 32,100
+/- 110,800
+/- 6,500
1%
-20%
-13%
-21%
-44%
-16%
53%
-16%
At current prices
Cereals
General cropping
Dairy
Grazing livestock (Lowland)
Grazing livestock (LFA)
Specialist pigs
Specialist poultry
Mixed
Definition of Farm Business Income
For non corporate businesses, Farm Business Income represents the financial return to all
unpaid labour (farmers and spouses, non-principal partners and their spouses and family
workers) and on all their capital invested in the farm business, including land and buildings.
For corporate businesses it represents the financial return on the shareholders capital
invested in the farm business.
In essence Farm Business Income is the same as Net Profit, which as a standard financial
accounting measure of income is used widely within and outside agriculture. Using the term
Farm Business Income rather than Net Profit, gives an indication of the measure’s farm
management accounting rather than financial accounting origins, accurately describes its
composition and is intuitively recognisable to users as a measure of farm income.
Farm type classification
Note that the classification of farms has been revised since the 2010/11 Farm Business
Survey and backdated for 2009/10 data only. The results published here are therefore not
directly comparable with those published in earlier years. Please see the explanatory
document on our web site for further details of these changes.
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Survey coverage and weighting
The Farm Business Survey (FBS) is an annual survey providing information on the financial
position and physical and economic performance of commercial farm businesses in
England. It covers all types of farming in all regions of the country and includes owneroccupied, tenanted and mixed tenure farms. The FBS only includes farm businesses with a
Standard Output of at least €25,000, based on activity recorded in the previous June
Survey of Agriculture and Horticulture. In 2013, this accounted for approximately 58,000
farm businesses. Data are collected from a sample of around 1,900 farm businesses by
face to face interviews with farmers, conducted by highly trained researchers.
Each record is given a weight to make the sample representative of the population. Initial
weights are applied to the FBS records based on the inverse sampling fraction. These
weights are then adjusted by calibrating certain totals to match published totals from other
surveys1) so that they can be used to produce unbiased estimators of a number of different
target variables.
The weighting methodology was changed for 2012/13 to improve the reliability of the results
for farms with poultry. The change was two-staged. Poultry farms were split into two
groups (egg and poultrymeat producers) at the inverse sampling fraction stage. In addition,
the FBS estimates of total number of laying birds and total number of table birds are now
calibrated to match those from the previous June Survey of Agriculture and Horticulture.
This practice is already in place for other livestock counts (as well as crop areas and farm
counts) to draw strength from the increased robustness of the much larger sample of the
June Survey. This change has been applied retrospectively back to 2009/10.
More detailed information about the Farm Business Survey and the data collected can be
found at https://www.gov.uk/farm-business-survey-technical-notes-and-guidance
Availability of results
All Defra statistical notices can be viewed on the Gov.UK site at:
https://www.gov.uk/government/organisations/department-for-environment-food-ruralaffairs/about/statistics.
Results from the Farm Business Survey including time series in spreadsheet format can be
found at:
https://www.gov.uk/government/collections/farm-business-survey
1
Further information on calibration weighting can be found in the ‘Statistical Issues’ document here
http://webarchive.nationalarchives.gov.uk/20130315143000/http://www.defra.gov.uk/statistics/files/defra-statsfoodfarm-farmmanage-fbs-statissues_111123.pdf
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User engagement
As part of our ongoing commitment to compliance with the Code of Practice for Official
Statistics (http://www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html), we
wish to strengthen our engagement with users of these statistics and better understand the
use made of them and the types of decisions that they inform. Consequently, we invite
users to make themselves known, to advise us of the use they do, or might, make of these
statistics, and what their wishes are in terms of engagement. Feedback on this notice and
enquiries about these statistics are also welcome.
Please contact Charles Mbakwe at [email protected].
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