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Chapter 4: Livestock Farms

Updated 21 December 2023

Applies to England

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Chapter 3: Cropping Farms

Chapter 5: Diversification

The following section provides detailed results for each livestock farm type. Where dataset tables are referred to in the text, these can be found at: https://www.gov.uk/government/statistics/farm-accounts-in-england-data-sets.

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 the technical notes and guidance page.

Farm Business Income can be considered as comprising income from four different parts of the business: agriculture, agri-environment, diversification and the Basic Payment Scheme. These are known as cost centres. However, as the methodology to allocate costs to each of the cost centres involves a degree of estimation, results should be interpreted with caution. Details on the methodology can be found in the FBS technical notes and guidance.

Figure 4.1: Average Farm Business Income for livestock farms in England, broken down by cost centres, 2021/22 and 2022/23

Source: Dataset table 5

Figure notes:

1. The legend is presented in the same order as the bars (read the top row from left to right, then the bottom row from left to right; read the bars from top to bottom), except for specialist pig farms in 2021/22 and lowland grazing livestock and LFA grazing livestock farms in 2022/23, where the values for the agriculture cost centre are negative

2. The data shown are the averages across all farms in the sample, including those that do not have any income within some of the cost centres

Figure 4.2 Input cost breakdown by farm type in England, 2022/23

Source: Dataset table 6

Figure note: The legend is presented in the same order as the bars

Figure 4.2 shows a breakdown of the key components of overall input costs by farm type. A more disaggregated breakdown at the all farm level can be found in dataset table 5.

Dairy Farms

On dairy farms, average Farm Business Income (FBI) was £229,200, an increase of 63% compared to 2021/22 (dataset table 5.7). A large increase in agricultural output was almost entirely driven by a rise in output from milk and milk products of 48%. Whilst the average volume of milk per cow was little changed compared to 2021/22, the number of animals increased slightly (Table 4.1) and (dataset table 6.5) and the average price of milk, supported by tight supplies during the year, rose by 41% to 46.5p per litre. It is important to note the wide variation in milk prices with some farmers receiving considerably more or less than the average. This increase was more than enough to offset a fall in crop output of 20% and rises across a range of input costs. Variable costs increased by just over a third, most notably for purchased feed and fodder which was 45% higher (Figure 4.3) and fertiliser costs which rose by 85% (dataset table 5.7). Figure 4.2 shows a breakdown of the key components of overall input costs.

The average Basic Payment fell by just under a quarter to £21,700 while agri-environment payments were £7,400, a 56% increase compared to 2021/22. At £14,000, the net contribution of diversified activities to FBI was 19% higher, largely driven by a combination of lower fixed costs and an increase in rental income.

Figure 4.3: Average compound feed prices for cattle and calves in Great Britain, 2021/22 to 2022/23

Source: Defra (Average Compound Feed Prices by main livestock categories, Great Britain)

Table 4.1: Average herd size for dairy cows in England, 2015 to 2022

Source	2016	2017	2018	2019	2020	2021	2022
Cattle Tracing scheme (all holdings)	90	93	97	101	102	105	110
Cattle Tracing Scheme (holdings with >= 10 dairy cows)	146	151	156	160	[z]	166	172
Farm Business Survey (specialist dairy farms)	174	187	188	191	189	199	209

Sources: Cattle Tracing Scheme (CTS) and Farm Business Survey England

Table notes:

1. Dairy cows are defined as female dairy cows over 2 years old with offspring from the CTS

2. 2016 and 2017 Farm Business Survey data are based on 2010 Standard Outputs

3. From 2018 onwards Farm Business Survey data are based on 2013 Standard Outputs

4. The symbol ‘z’ denotes data not available; England data collection for 2020 was disrupted by Covid-19, therefore, it was not possible to produce 2020 CTS results by size group

Figure 4.4: Milk availability in England and Wales, March 2021 to February 2023

Source: Defra monthly survey of milk utilisation by dairies in England and Wales

At 65% of farms, dairy had the largest proportion of all farm types with an FBI of over £100,000, while less than 5% of dairy farms failed to make a profit in 2022/23 (Figure 2.2). When analysed by performance bands, the lower performers moved from a loss of £15,600 in 2021/22 to a positive return on agricultural activities of £10,900 in 2022/23 (dataset table 7.6). The medium 50% of performers saw the average income on their agricultural activities more than doubled to £164,800. For the highest performing 25% the return on agriculture was 72% higher than 2021/22 at £379,100.

Figure 4.5 shows production costs for milk in 2022/23. Based on enterprise data from the FBS, the average price for milk sold from dairy enterprises (across all farm types with dairy enterprises, not just dairy type farms) was 46.4 pence per litre in 2022/23, a 41% increase on 2021/22, whilst the average cost of production was 36.4 pence per litre. Note that the cost of production is on a full economic basis (see footnote to Figure 4.5) and is spread across all milk produced including any that is used on the farm.

Figure 4.5: Proportion of milk produced by cost of production (in pence per litre) in England, 2022/23

Source: Farm Business Survey England

Figure notes:

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

2. Production costs shown here include all financial aspects of dairy enterprises such as any unpaid labour (including that of the farmer and spouse), herd depreciation and an estimated rental equivalent for land that is owned. An allowance is also made for non-milk revenue, most of which is from the sale of dairy calves, which is applied as a reduction to cost. This is to take into account the value of by-products from milk production. As a result, the production costs here represent the price that would have to be paid on all milk produced for dairy enterprises to break even.

Grazing livestock farms (lowland)

The average Farm Business Income (FBI) on lowland grazing livestock farms fell by 37% in 2022/23 to £21,600 with higher input costs the primary driver (dataset table 5.10). Variable costs rose by 6% with contract costs and fodder experiencing the biggest increases. Higher machinery costs (fuels, oil and depreciation) and general farming costs were key factors in a 16% increase to fixed costs. At the same time, agricultural output was 3% lower, although a fall in output from livestock was partially mitigated by an increase from cropping activities. Output from cattle enterprises, which typically make up the largest proportion of livestock output on lowland farms, fell by 2%. This was due to a slightly lower stocking rate and less animals sold as, on average, prices were higher for both finished and store animals compared to 2021/22 (Figure 4.6). Sheep output also fell following a strong 2021/22 with lower average prices overall (Figure 4.7) and, similar to cattle, less animals sold.

The Basic Payment was 14% lower than the previous year, at £13,800 it equated to 64% of total FBI on this type of farm (Figure 4.1). The contribution from the diversification and agri-environment cost centres increased by 15% and 30% respectively.

Figure 4.6: Average price for clean cattle (liveweight) in Great Britain, March 2021 to February 2023

Sources: Agriculture and Horticulture Development Board; Livestock Auctioneers’ Association; Institute of Auctioneers and Appraisers in Scotland

Comparing across performance bands, low and medium performing businesses again failed to make a positive return from agriculture in 2022/23 and in both cases losses increased compared to 2021/22 (dataset table 7.8). Low performers also failed to generate a positive return for the business as a whole in both 2021/22 and 2022/23 with losses increasing more than tenfold from -£900 in 2021/22 to -£9,600 in 2022/23. For the top 25% of performers, the average return on agricultural activities was £11,200, a 64% decrease compared to 2021/22 and their overall FBI was £68,600 (17% lower than the previous year).

Figure 4.7: Deadweight Standard Quality Quotation (SQQ) price in the United Kingdom, March 2021 to February 2023

Source: Agriculture and Horticulture Development Board

Figure note: The Deadweight SQQ is for lamb carcasses falling in the 12kg to 21.5kg weight bracket.

Grazing livestock farms (Less Favoured Area)

On LFA grazing livestock farms average Farm Business Income (FBI) fell by 41% to £25,400 (Figure 4.1). The fall reflects lower output from livestock while agricultural input costs increased by 5%. In common with other livestock farm types, fodder and contract costs were chief amongst the rises to variable costs, while the key increases to fixed costs were machinery fuels and oils, share of net interest payments and general farming costs (dataset table 5.15). Revenue from sheep enterprises, which tend to make the biggest contribution to livestock output on upland farms, fell by 14% although this was partially offset by a rise in cattle output of 9%. Overall, this type of farm failed to make a positive return on their agricultural activities with an average loss of £10,400. When the agricultural cost centre is analysed by performance bands, the low and medium performing groups of LFA grazing livestock farms both experienced increased losses compared to 2021/22 (dataset table 7.10), while the top 25% of farms saw the return on their agricultural activities fall from £16,500 in 2021/22 to £400 in 2022/23.

With the second year of phased reductions, the Basic Payment fell by just over quarter compared to 2021/22. At £12,900 income from agri-environment activities was 4% higher than the previous year; an important income stream for this type of farm, these payments represented just over half of their overall FBI.

Specialist pig farms

The Farm Business Survey sample for specialist pig farms is relatively small, meaning that individual farms can have a large influence on the results and the results should be treated with caution.

In 2022/23, the average Farm Business Income (FBI) for specialist pig farms was £67,900 compared to £11,800 in 2021/22 (dataset table 5.16). Average prices for both store and finished pigs showed some recovery across the survey period and this was a factor in increasing pig output by 22% (Figure 4.7). Crop output also rose (by an average of 35%) for pig farms growing crops. However, as with other farm types, these increases were countered by a steep rise in cost for some inputs (dataset table 5.18). Purchased and home grown feed and fodder rose by 24% and 84% respectively (Figure 4.8), together these accounted for over 70% of all agricultural variable costs. Figure 4.2 shows a breakdown of the key components of overall input costs. There were also rises across a range of fixed costs, most noticeably general farming costs, water and electricity. For specialist pig farms these factors combined resulted in an average return on agricultural activities of £5,900.

Income from diversified activity rose by more than two thirds with tourism, food processing and retailing accounting for most of the increase.

Note that these changes should be treated with caution because of the small sample size and the wide confidence intervals. Contract rearers are also well represented in the Farm Business Survey sample. Business models for contract rearing operations are varied and these types of farms may not be impacted by price variations to the same extent as non contract rearing farms. In 2022/23, there was also a particularly influential specialist pig farm in the sample. Reweighting this farm so it only represents itself in the results would reduce average FBI for specialist pig farms to approximately £63,000, with an averaged diversified income of approximately £21,000. For more information on weighting see Survey Details and Technical Notes.

Figure 4.8: Deadweight Average Pig Price (APP) in Great Britain, March 2021 to February 2023

Source: Agriculture and Horticulture Development Board

Figure note: the Average Pig Price (APP) series was introduced in April 2014; for more information see GB deadweight pig prices (UK spec), AHDB

Figure 4.9: Average compound feed prices for pigs in Great Britain, 2021/22 to 2022/23

Source: Defra (Average Compound Feed Prices by main livestock categories, Great Britain)

Specialist Poultry farms

The Farm Business Survey sample specialist poultry farms are relatively small, meaning that individual farms can have a large influence on the results, and the results should be treated with caution.

Average Farm Business Income on specialist poultry farms fell by nearly a quarter in 2022/23 to £105,900 (dataset table 5.19) with increases to input costs outweighing a smaller rise in output. Variable costs were 11% higher with the key driver the increased cost of purchased feed, which typically accounts for the major proportion of variable costs on poultry farms. A fall in fixed costs of 8% was insufficient to compensate for this and overall, agricultural costs rose by 6%. In comparison, output was 4% higher. Output from eggs rose by a third driven by an increase in price (Figure 4.9) and quantity. For quantity, this was in contrast to the trends seen in UK statistics (UK statistics), which show a decrease in egg production across the survey period. Output from poultry meat enterprises was virtually unchanged compared to 2021/22. These factors resulted in an overall return on agricultural activities of £59,600, a 22% decrease on 2021/22. Income from the other cost centres of diversification, agri-environment payments and the Basic Payment also fell, particularly diversification which was 17% lower, driven largely by a fall in income from the rental of buildings (dataset table 5.20).

Note that these changes for specialist poultry farms should be treated with caution because of the small sample size and the range of enterprises covered by this farm type. For example, there are farms producing broilers, turkeys, ducks and geese and for laying flocks the systems cover organic and conventional free range enterprises as well as enriched cages.

Figure 4.10: Quarterly Egg Packing Station prices in the United Kingdom, 2021 and 2022

Source: Quarterly UK Egg Packing Station Survey

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Chapter 3: Cropping Farms

Chapter 5: Diversification