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Chapter 2: Key Results and Overview Across England

Updated 21 December 2023

Applies to England

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Chapter 1: Key Events

Chapter 3: Cropping Farms

Key results

Figures are for March to February years, with the most recent year shown ending February 2023. This covers the 2022 harvest and includes the Basic Payment due in the 2022/23 accounting year.

In simple terms, Farm Business Income is the output generated by the farm business minus total farm costs. For the full definition of Farm Business Income see Survey Details and Technical Notes.

• In 2022/23, exceptional price volatility, in terms of both input costs and output revenue was a key factor determining incomes. This led to a mixed picture for Farm Business Income (FBI) across the different farm types. The average FBI was lower compared to 2021/22 for general cropping, grazing livestock, both lowland and those in Less Favoured Areas (LFA), poultry and mixed farms. There were rises for other sectors and these were particularly substantial for cereal and dairy farms.

• On cereal farms, average FBI rose by 25% to £150,400 with a combination of increased yields and firm prices more than offsetting rises across most input costs. For general cropping farms, a 14% fall in FBI to £125,200 was driven by the reduced Basic Payment and lower agricultural output (whilst cereals and oilseed rape generally did well, some other crops typically grown on general cropping farms such as sugar beet, potatoes, peas and beans were impacted by the hot, dry summer of 2022).

• On dairy farms, average FBI increased by nearly two thirds to £229,200. A substantial rise in output was driven by output from milk rising by 48% as a result of higher prices. This more than offset increases to input costs.

• Increased costs (particularly machinery, contract costs and feed) and lower agricultural output were major influencing factors on average FBI for grazing livestock farms which fell by 37% for lowland farms to £21,600 and by 41% for those in the LFA to £25,400.

• On specialist pig farms, average FBI increased to £67,900 with higher output from pig enterprises (reflecting improved prices for store and finished animals), crops and diversification activities offsetting substantial cost rises, particularly for feed. Average FBI on specialist poultry farms fell to £105,900; an increase to egg output was not enough to offset higher costs (notably feed) and a fall in both crop output and revenue from diversified activities.

• The progressive reduction to the Basic Payment was introduced in 2021. In 2022/23 across all farms types the average payment received was approximately £22,700. This was 19% lower than in 2021/22 and accounted for around a quarter of FBI.

• In 2022/23, 69% of farm businesses in England had some form of diversified activity. The main diversified activity was letting out buildings for non-agricultural use, with just under half of farms in England engaging in this activity. This was followed by the production of solar energy, with 22% uptake.

• The most profitable diversified activity was letting out buildings for non-agricultural use, with an average enterprise income of approximately £23,600, whereas the least profitable activities were having sport and recreation facilities and the production of solar energy, both with average enterprise incomes of £5,000

Overview of farms in England

Where table numbers are referred to in the text, these can be found within the dataset spreadsheets at: https://www.gov.uk/government/statistics/farm-accounts-in-england-data-sets.

At an England all farm level, average Farm Business Income was £96,100 in 2022/23; a 12% increase compared to 2021/22. However, the all farm level FBI masks considerable variation between farm types (Figure 2.1).

2022/23 was a period of exceptional price volatility primarily as result of the war in Ukraine. Higher costs for key inputs such as fertiliser, seed, contract costs and animal feed were seen across the board. However, some farm types, such as dairy and cereal farms, also saw large increases to output revenue which more than offset the input rises. At the same time, other types of farm (for example, grazing livestock and general cropping farms), saw their output revenue change little or even fall and this combined with the input cost rises led to a decrease in average FBI.

Overall, output increased for cereal and oilseed rape enterprises, the result of higher prices, tight global supplies (both influenced by the war in Ukraine) and generally favourable conditions producing increased yields. However, conditions were not ideal for all crops and some, such as sugar beet, suffered in the summer drought resulting in lower output.

Output from livestock increased at the all farm level, but as with crops there was variation across enterprises. For farms with sheep enterprises, generally lower prices following a very strong 2021/22 resulted in a fall in output from sheep. At the same time, cattle enterprises benefited from higher average prices for both finished and store cattle. For dairy enterprises output rose considerably, again linked to price rises (rather than increased production) and for all farms in England (not just those who are specialist dairy farms) the average pence per litre for milk was around 14% higher than 2021/22. After a difficult 2021/22, there was some recovery in pig prices which helped increased output from pig enterprises by around a fifth.

Costs were substantially higher overall compared to 2021/22; at the all farm level purchased animal feed costs experienced the highest value increase rising by around 40%. After this, fertilisers and contract costs contributed most to variable cost rises, while for fixed costs the largest increases were for machinery, machinery oil and fuel and general farming costs.

In 2022, the second year of progressive reduction to the Basic Payment, a 20% reduction was applied to the first £30,000 of the payment with larger incremental deductions on the bigger payment bands. The average Basic Payment for farms in England was £22,700. This was 19% lower than in 2021/22 and accounted for around a quarter of Farm Business Income. When considered on a per hectare basis, the average payment was 18% lower compared to 2021/22. There was considerable variation in the importance of the Basic Payment across individual farm types with grazing livestock and mixed farms most reliant on the payments.

The period covered by these results (1 March 2022 to 28 February 2023) also saw the launch of the Sustainable Farming Incentive. In 2022/23, the relative contribution of the agri-environment cost centre to FBI increased by around a third at the all farm level with cereal farms seeing the largest increase in income from agri-environment activities and LFA grazing livestock and pig farms the smallest. For general cropping and poultry farms the average return on agri-environment activity fell.

It is planned to publish more detailed analysis of changes to the Basic Payment and agri-environment payments during the agricultural transition period in February 2024.

Figure 2.1 shows average Farm Business Income by farm type together with 95% confidence intervals. These show the range of values that may apply to the figures. Further details on accuracy or results can be found in the Survey Details and Technical Notes section.

Figure 2.1 Average Farm Business Income (£ per farm) by farm type, with 95% confidence intervals, in England, 2021/22 and 2022/23

Source: Dataset table 1.1

Figure notes:

1. The legend is presented in the same order as the bars

2. The sample sizes for specialist pig and poultry farms are relatively small, with average incomes subject to greater variation.

Farm Business Income varies both between and within farm types (Figures 2.1 and 2.2). The variation in incomes within farm types reflects a number of factors such as farm size, location and soil type. Some farm types also undertake a diverse range of agricultural activities. For example, horticulture includes specialist glasshouse farms, specialist fruit, specialist hardy nursery stock and market garden vegetable producers who may experience large differences in their production costs and outputs.

Figure 2.2 Distribution of Farm Business Income by farm type in England, 2022/23

Source: Dataset table 8

Figure notes:

1. The legend is presented in the same order as the bars

2. Due to small sample sizes, the last two categories have been merged for LFA grazing livestock farms; the last category therefore represents ‘£75k and over’

3. Due to small sample sizes, some categories have been merged for specialist pig farms; the categories for pig farms are ‘Less than £0k’, ‘£0 to £49.9k’, ‘£50 to £99.9k’ and ‘£100k and over’

4. Where the value is less than 5%, the label is not shown on the chart

5. The sample sizes for specialist pig and poultry farms are relatively small with average incomes subject to greater variation

In 2022/23, 17% of farms failed to make a profit (compared to 9% of farms in 2021/22). However, the proportion was higher for some types, such as lowland grazing livestock, specialist pigs and horticulture. For each of these farm types at least a fifth of farms failed to make a profit. At 65% of farms, dairy had the largest proportion of farms with an income of more than £100,000, while grazing livestock farms (both lowland and LFA) had the lowest proportion.

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Chapter 1: Key Events

Chapter 3: Cropping Farms