Chapter 3: Farming income
Published 6 June 2024
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Summary
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In 2022/23, the average Farm Business Income (FBI) across all farm types in Great Britain (Northern Ireland data for 2022/33 were not available at the time of publication) was £86,000 compared to the UK average of £72,000 in 2021/22.
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FBI varies greatly with 17% farms in Great Britain failing to make a positive FBI in 2022/23, while 41% of farms had an FBI of over £50,000.
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In 2023/24, lower prices for key outputs such as wheat and milk are expected to be one of the main factors influencing Farm Business Income. The impact of lower output prices will also be compounded by continued rises for some input costs.
Introduction
This chapter presents Farm Business Income. Total Income from Farming (TIFF) data can be found in Chapter 4.
Farm Business Income (FBI) is the preferred measure for comparisons of farm type and represents the return to all unpaid labour (farmers, spouses and others with an entrepreneurial interest in the farm business) and to all their capital invested in the farm business including land and farm buildings.
Total Income from Farming (TIFF) represents business profits and remuneration for work done by owners and other unpaid workers. It is used to assess UK agriculture as a whole.
Table 3.3, found at the end of this chapter, provides more detailed information on definition, method used and similarities and differences for the two income measures.
Farm Business Incomes by farm type
The estimates of Farm Business Income are averages. It should be noted that across different regions and farm types, some farmers receive considerably more or less than these averages. Northern Ireland data for 2022/23 were not available at time of publication.
Forecasts of Farm Business Income for England, 2023/24 (i.e. the year ending February 2024 and harvest 2023) at current prices are shown in Table 3.1a. These forecasts include Basic Payment Scheme receipts which are recorded as due for the appropriate accounting year, for example receipts of the 2023 Basic Payment Scheme are recorded in the 2023/24 accounting year.
Note that forecasts of Farm Business Income in Wales and Scotland have not been produced. Forecasts for Northern Ireland were not available at time of publication. In England, no income forecasts for 2023/24 have been produced for specialist poultry or horticulture farms. These forecasts are subject to a considerable degree of uncertainty, reflecting both the structure of these sectors and the relatively small sample of these farms in the Farm Business Survey. These factors, combined with the market uncertainties and extreme price volatility of the last year, have meant it has not been possible to produce robust forecast estimates.
Lower prices for key outputs such as wheat and milk are expected to be one of the main factors influencing Farm Business Income in 2023/24. For some farm types, the impact of lower output prices will also be compounded by continued rises for certain input costs. In England, the average Basic Payment is expected to be around 40% lower across all farm types, reflecting the third year of progressive reductions to the payment. Although variation between farm types is forecast, at the all farm level payments from agri-environment activities are expected to increase to £15,000 (a rise of around £4,000).
On cereal farms in England, after two years of outstandingly high levels, average Farm Business Income is forecast to fall by around three quarters to £34,000. The fall is expected to be primarily driven by a substantial drop in output from crop enterprises, particularly wheat where lower prices (returning to around levels seen in 2020/21) will be influenced by plentiful global supplies of maize and adaptation to the situation in Ukraine. The area of wheat and the yield are also expected to be lower. At the same time, input costs are predicted to increase slightly compared to 2022/23, compounding an overall fall in output of around a quarter.
At £53,000, average income for general cropping farms in England is forecast to be 58% lower than 2022/23. As with cereal farms, a sizeable drop in output from cereals and oilseed rape is expected to be a key driver. The picture for other crop enterprises is forecast to be mixed, with falls in output for potatoes, peas and beans but a rise in output from sugar beet reflecting higher prices, crop area and yield. Overall, output is forecast to be 12% lower than 2022/23 while input costs are expected to increase by 2% with the largest rises to general farming costs, seeds and property costs.
On dairy farms in England, average income is forecast to fall by 78% to £50,000 from the exceptionally high level of 2022/23. A decrease in output from milk of around 19% is expected to be a key factor, driven by lower farmgate prices (which began to fall at the start of 2023). At the same time, input costs are forecast to be unchanged with lower feed costs and wages (reflecting a reduction in the number of workers rather than lower wages) offset by increases to general farming costs and, to a lesser extent, property costs and other livestock costs.
In England, income on lowland grazing livestock farms is forecast to increase by 5% to £23,000 while on less favoured area (LFA) grazing livestock farms average income will be marginally higher (1%) at £26,000. For both types of farm, increased output from sheep enterprises will be one of the main drivers reflecting firm prices for finished and store lambs across the period. Output from cattle is forecast to be little changed for lowland farms and slightly lower for LFA farms, as closing values are expected to be lower than 12 months ago. Input costs are forecast to be little changed on lowland farms and to decrease slightly for LFA farms.
Forecasts for specialist pig farms are subject to a considerable degree of uncertainty, reflecting both the structure of the sector and the relatively small sample of these farms in the Farm Business Survey in England. The average Farm Business Income for specialist pig farms is expected to increase by just over a third compared to 2022/23 to £91,000. Lower costs, particularly for feed (reflecting price decreases to feed ingredients such as wheat) are forecast to more than offset a reduction in output from both pig and cropping enterprises.
Incomes on mixed farms in England are expected to fall by nearly half to £37,000. The changes reported previously for specialist farm types will all have influenced the incomes for this farm type.
Tables 3.1a and 3.1b Farm Business Income by country and type of farm (average Farm Business Income per farm, £/farm)
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Table 3.1a Farm Business Income by country and type of farm (average Farm Business Income per farm at current prices, £/farm)
| Standard Output Typology | 2020/21 | 2021/22 | 2022/23 | 2023/24 (Provisional) |
|---|---|---|---|---|
| England | ||||
| Cereals | 71,500 | 120,000 | 150,500 | 34,000 |
| General cropping | 67,000 | 145,500 | 125,000 | 53,000 |
| Dairy | 92,500 | 140,000 | 229,000 | 50,000 |
| Grazing livestock (lowland) | 18,500 | 34,000 | 21,500 | 23,000 |
| Grazing livestock (LFA) | 33,500 | 43,000 | 25,500 | 26,000 |
| Specialist pigs | 48,000 | 12,000 | 68,000 | [x] |
| Specialist poultry | 77,500 | 138,000 | 106,000 | [x] |
| Mixed | 40,000 | 74,000 | 68,000 | 37,000 |
| Wales | ||||
| Dairy | 60,000 | 88,000 | 165,000 | [x] |
| Grazing livestock (lowland) | 23,000 | 26,500 | 18,500 | [x] |
| Grazing livestock (LFA) | 30,000 | 38,500 | 24,500 | [x] |
| Scotland | ||||
| Cereals | 65,000 | 88,000 | 99,500 | [x] |
| General cropping | 72,000 | 85,500 | 167,000 | [x] |
| Dairy | 101,500 | 164,000 | 248,500 | [x] |
| Grazing livestock (lowland) | 30,500 | 32,000 | 19,500 | [x] |
| Grazing livestock (LFA) | 19,500 | 24,000 | 24,500 | [x] |
| Mixed | 46,000 | 61,500 | 85,500 | [x] |
| Northern Ireland | ||||
| Dairy | 63,000 | 83,000 | [x] | [x] |
| Grazing livestock (LFA) | 20,500 | 23,000 | [x] | [x] |
Table 3.1b Farm Business Income by type of farm in the UK (average Farm Business Income per farm, £/farm)
| Standard Output Typology | 2020/21 | 2021/22 | 2022/23 | 2023/24 (Provisional) |
|---|---|---|---|---|
| At current prices | ||||
| Cereals | 70,500 | 115,500 | 144,000 | [x] |
| General cropping | 67,500 | 132,500 | 133,000 | [x] |
| Dairy | 81,500 | 119,500 | 218,000 | [x] |
| Grazing livestock (lowland) | 19,500 | 32,500 | 21,000 | [x] |
| Grazing livestock (LFA) | 26,500 | 33,000 | 25,000 | [x] |
| Specialist pigs | 50,500 | 14,000 | 68,000 | [x] |
| Specialist poultry | 77,500 | 138,000 | 106,000 | [x] |
| Mixed | 41,500 | 71,500 | 70,000 | [x] |
| All types (including Horticulture) | 46,500 | 72,000 | 86,000 | [x] |
| In real terms (at 2022/23 prices) | ||||
| Cereals | 74,500 | 123,500 | 144,000 | [x] |
| General cropping | 71,500 | 141,500 | 133,000 | [x] |
| Dairy | 86,000 | 127,500 | 218,000 | [x] |
| Grazing livestock (lowland) | 20,500 | 34,500 | 21,000 | [x] |
| Grazing livestock (LFA) | 28,000 | 35,500 | 25,000 | [x] |
| Specialist pigs | 53,500 | 15,000 | 68,000 | [x] |
| Specialist poultry | 82,000 | 147,500 | 106,000 | [x] |
| Mixed | 44,000 | 76,000 | 70,000 | [x] |
| All types (including Horticulture) | 49,500 | 77,000 | 86,000 | [x] |
Notes for table 3.1a and 3.1b:
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[x] data unavailable.
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Years are accounting years ending on average in February.
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Figures for 2020/21 to 2022/23 rounded to the nearest £500.
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Forecast figures for 2023/24 rounded to the nearest £1,000.
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Figures for 2023/24 are provisional and subject to revision.
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Table 3.1a figures are at current prices.
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Table 3.1b figures are shown at current prices and in real terms. Real term figures are adjusted for inflation using GDP deflator.
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Table 3.1b UK farm type averages include data for some member countries that are not presented separately in the country level breakdown at Table 3.1a. Data for 2022/23 are for Great Britain only.
Download the full Farming income dataset
Distribution of farm incomes and performance
Tables 3.2a to 3.2c show the variation in the level of Farm Business Income, Net Farm Income and Cash Income across farms in England, Wales and Scotland for 2022/23. Northern Ireland data for 2022/23 were not available at the time of publication.
Around 17% of farms in Great Britain (GB) failed to make a positive Farm Business Income compared to 10% in 2021/22, although there was some slight variation between countries with the proportion higher in Wales at 19%. Just over a third of farms in Great Britain fell into the lower income brackets (less than £20,000). At the top end of the scale, 41% of farms had a Farm Business Income of more than £50,000, no change on the 2021/22 UK proportion. However, there was again some variation between countries in this highest income category. For England and Scotland, the proportion of farms was 43% and 45% respectively, while for Wales the proportion of farms was 25%.
A greater proportion of farms fall into lower band income ranges for Net Farm Income. This is because Net Farm Income is a narrower measure of income; it is net of an imputed rent on owned land and an imputed cost for unpaid labour (apart from farmer and spouse). On this basis a quarter of farms in Great Britain failed to make a profit.
For comparison, the full distribution of farm incomes for 2021/22 can be found in Chapter 3 of the 2022 Agriculture in the UK.
Tables 3.2a to 3.2c All farm types: distribution of farm incomes by country 2022/23 (percentage of farms)
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Table 3.2a Farm Business Income (percentage of farms)
| Farm Business Income | England | Wales | Scotland | Great Britain |
|---|---|---|---|---|
| Less than zero | 17% | 19% | 17% | 17% |
| 0 to less than £5,000 | 4% | 6% | 4% | 4% |
| £5,000 to less than £10,000 | 5% | 11% | 4% | 6% |
| £10,000 to less than £20,000 | 9% | 14% | 11% | 10% |
| £20,000 to less than £30,000 | 9% | 11% | 8% | 9% |
| £30,000 to less than £50,000 | 14% | 13% | 11% | 13% |
| £50,000 and over | 43% | 25% | 45% | 41% |
| Average (£ thousand per farm) | 96 | 47 | 69 | 86 |
Table 3.2b Net Farm Income (percentage of farms)
| Net Farm Income | England | Wales | Scotland | Great Britain |
|---|---|---|---|---|
| Less than zero | 25% | 32% | 23% | 25% |
| 0 to less than £5,000 | 6% | 9% | 4% | 6% |
| £5,000 to less than £10,000 | 5% | 8% | 3% | 5% |
| £10,000 to less than £20,000 | 9% | 11% | 11% | 10% |
| £20,000 to less than £30,000 | 8% | 10% | 7% | 8% |
| £30,000 to less than £50,000 | 10% | 12% | 15% | 11% |
| £50,000 and over | 37% | 19% | 36% | 35% |
| Average (£ thousand per farm) | 83 | 34 | 57 | 73 |
Table 3.2c Cash Income (percentage of farms)
| Cash Income | England | Wales | Scotland | Great Britain |
|---|---|---|---|---|
| Less than zero | 11% | 11% | 10% | 11% |
| 0 to less than £5,000 | 4% | 5% | 2% | 4% |
| £5,000 to less than £10,000 | 4% | 5% | 2% | 4% |
| £10,000 to less than £20,000 | 11% | 15% | 10% | 11% |
| £20,000 to less than £30,000 | 9% | 14% | 11% | 10% |
| £30,000 to less than £50,000 | 12% | 15% | 15% | 13% |
| £50,000 and over | 50% | 35% | 50% | 48% |
| Average (£ thousand per farm) | 112 | 64 | 85 | 102 |
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Figure 3.1 shows the differences in performance of farms in England for 2022/23. Performance is measured as “£ of output per £100 of input”. An imputed value for unpaid labour is added to the input costs. The chart illustrates the significant variation in performance with 45% of farms failing to recover their costs in that year.
Figure 3.1 Distribution of performance across farms 2022/23: England only (£ output per £100 input)
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| £ output per £100 input | % |
|---|---|
| 0 < 60 | 7.6% |
| 60 < 70 | 4.9% |
| 70 < 80 | 9.0% |
| 80 < 90 | 10.8% |
| 90 < 100 | 13.1% |
| 100 < 110 | 11.9% |
| 110 < 120 | 10.7% |
| 120 < 130 | 10.3% |
| 130 < 140 | 6.0% |
| 140 < 150 | 4.5% |
| 150 < 160 | 4.3% |
| 160 < 170 | 2.5% |
| 170 and over | 4.4% |
Notes:
- Performance is based on the ratio of farm business output to farm business costs which includes an adjustment for unpaid labour
Source: Farm Business Survey
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Definitions and explanatory note
There are two main measures of agricultural income which are closely related and complement each other. Total Income from Farming provides an estimate of total income for agriculture as a whole whereas Farm Business Income provides a breakdown of average incomes by farm type. Table 3.3 compares the two measures in terms of definition, methodology and main similarities and differences.
Table 3.3 Comparison table showing main similarities and differences between Total Income from Farming (TIFF) and Farm Business Income (FBI) statistics
| Total Income from Farming | Farm Business Income | |
|---|---|---|
| Geographic scope | United Kingdom | England |
| Reference period | Calendar year | 12-month period March to February |
| Definition | Represents business profits and remuneration for work done by owners and other unpaid workers. | Represents the return to all unpaid labour (farmers, spouses and others with an entrepreneurial interest in the farm business) and to all their capital invested in the farm business including land and farm buildings. |
| Data source | A wide range of data sources including industry data and Defra survey data (i.e. the Farm Business Survey). | Farm Business Survey: annual sample surveys run by each of the four UK countries. |
| Method | Gross output at basic prices | Total output from agriculture (includes crop and livestock valuation change) |
| plus Other subsidies less taxes | plus Total output from agri-environment schemes | |
| less Total intermediate consumption, rent, paid labour | plus Total output from diversification | |
| less Total consumption of fixed capital (depreciation) | plus Single/Basic payment scheme | |
| less Interest | less Expenditure (costs, overheads, fuel, repairs, rent, depreciation, paid labour) | |
| plus Profit / (loss) on sale of fixed assets. | ||
| Differences | The main aggregate measure of farm income used to assess agriculture as a whole. | The preferred measure for comparisons of farm type. |
| Treatment of stocks: the physical changes in stocks valued at average calendar year prices. | Treatment of stocks: the change in the book value of stocks between the start and end of the accounting year. | |
| Similarities | Complete range of on-farm activities including income from diversified activities where they are included in the farm accounts. | Complete range of on-farm activities including income from diversified activities where they are included in the farm accounts. |
| Does not subtract imputed rent for owner occupiers. | Does not subtract imputed rent for owner occupiers. |
Revisions
Compared with the provisional 2022/23 results published in the 2022 edition of AUK, the outturns (based on actual survey results from the Farm Business Survey) for LFA grazing livestock farms were higher than forecast due to input cost increases being lower than anticipated. For all other farm types, the forecasts were within the confidence intervals of the survey outturns.
No England forecasts were produced for specialist pig or specialist poultry farms in 2022/23 as these are subject to a considerable degree of uncertainty, reflecting both the structure of these sectors and the relatively small sample of these farms in the Farm Business Survey. These factors, combined with the market uncertainties and extreme price volatility of the last year, meant it was not possible to produce robust forecast estimates.