Accredited official statistics

Farm Business Income in England, 2023/24 forecast

Updated 14 March 2024

Applies to England

Forecasts of Farm Business Income by type of farm, England, 2023/24

This statistical release provides forecasts of Farm Business Income (total output generated by the farm business minus total farm costs) for 2023/24 alongside results from recent years (Table 1.1). Data on farm business incomes are used to monitor and evaluate Government policies and to inform wider research into the economic performance, productivity and competitiveness of the agricultural industry. The data are also widely used by the industry for benchmarking.

These figures are for March/February years with the latest estimates covering the 2023 harvest and including the 2023 rate of the Basic Payment Scheme (which is included within the total farm output and therefore contributes to Farm Business Income). Actual survey results for this period will be published in November 2024.

The forecasts for 2023/24 are derived from information available in early February 2024 for prices, livestock populations, marketings, crop areas, yields and input costs. They are intended as a broad indication of how incomes for each farm type are expected to move compared with 2022/23.

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 results

• With the exception of grazing livestock and specialist pig farms, average Farm Business Income (FBI) is forecast to fall 2023/24 following exceptional highs in 2022/23. Lower prices for key outputs such as wheat and milk are expected to be one of the main factors influencing farm incomes. The impact of lower output prices is also predicted to be compounded by continued increases to some input costs.

• Substantial falls in average FBI for cereal farms and general cropping farms will reflect lower crop output, largely driven by wheat where a combination of lower price, yield and crop area will have a major impact. On dairy farms, a fall in the farmgate milk price is forecast to be the primary driver decreasing the average FBI.

• For grazing livestock farms, both lowland and in Less Favoured Areas (LFAs), increased output from livestock and reduced feed costs are expected to be key determining factors in small increases to overall FBI.

• Lower costs for specialist pig farms, particularly for feed (reflecting price decreases to feed ingredients such as wheat), are forecast to be the primary driver increasing FBI and are expected to more than offset a fall in output.

• No income forecasts have been produced for specialist poultry farms as 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 have meant it has not been possible to produce robust forecast estimates for 2023/24. Forecasts are not produced for horticulture farms.

• The 2023 Basic Payment is expected to fall by just under 40% at the all farm level, 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.

1 Farm Business Income by farm type

Figure 1.1 Average Farm Business Income (£ per farm) by farm type, England 2022/23 and 2023/24 forecast

Figure note:

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

Table 1.1 Average Farm Business Income per farm at current prices (£/farm)

Farm Type	2020/21	2021/22	2022/23	2023/24 forecast	% Change from 2022/23 to 2023/24
Cereals	71,700	120,100	150,400	34,000	-77%
General cropping	66,900	145,400	125,200	53,000	-58%
Dairy	92,500	140,200	229,200	50,000	-78%
Grazing livestock (Lowland)	18,400	34,000	21,600	23,000	5%
Grazing livestock (LFA)	33,400	42,900	25,400	26,000	1%
Specialist pigs	48,000	11,800	67,900	91,000	34%
Mixed	40,200	74,000	68,000	37,000	-46%

Table notes:

1. Data for forecast year rounded to the nearest thousand.
2. The percentages shown are calculated against the unrounded figures and are rounded to the nearest 1%.
3. Years ending at end of February.

Table 1.2 Average Farm Business Income per farm in real terms at 2022/23 prices (£/farm)

Farm Type	2020/21	2021/22	2022/23	2023/24 forecast	% Change from 2022/23 to 2023/24
Cereals	81,400	136,700	162,900	34,000	-79%
General cropping	75,900	165,600	135,600	53,000	-61%
Dairy	105,000	159,700	248,300	50,000	-80%
Grazing livestock (Lowland)	20,900	38,800	23,400	23,000	-3%
Grazing livestock (LFA)	37,900	48,800	27,600	26,000	-6%
Specialist pigs	54,500	13,400	73,500	91,000	24%
Mixed	45,700	84,300	73,700	37,000	-50%

Table notes:

1. Data for forecast year rounded to the nearest thousand.
2. The percentages shown are calculated against the unrounded figures and are rounded to the nearest 1%.
3. Years ending at end of February.
4. Real terms prices use the latest GDP deflator data, published 22 December 2023 at:http://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ybgb/ukea

1.1 Cereal Farms

After two years of outstandingly high levels (Table 1.1), the average Farm Business Income for cereal farms is expected to fall by around three quarters compared to 2022/23 to £34,000 (Figure 1.1 and Table 1.1). Output from cereals is forecast to be substantially lower, primarily due to a fall in output from wheat (which includes both milling and feed wheat). Wheat prices will return to levels close to those seen in 2020/21, influenced by plentiful global supplies of maize and adaptation to the situation in Ukraine. Lower wheat area and yields are expected to compound the fall in price, with wet conditions meaning a drawn-out harvest (in contrast to 2022/23), losses and poorer quality grain. Similarly, barley and oilseed rape crops are expected to see lower yields alongside falls in average price. Lower crop prices are forecast to be insufficient to offset higher input costs, which are expected to rise for some key inputs such as seeds and crop protection. Overall, inputs are forecast to increase by 2% compared to 2022/23 while output will fall by a quarter. Income from agri-environment activities is expected to increase by just over a third to £18,200 while the average Basic Payment on cereal farms is predicted to be around 40% lower at £21,300.

1.2 General Cropping Farms

Compared to 2022/23, average Farm Business Income is expected to fall by 58% on general cropping farms to £53,000 (Figure 1.1 and Table 1.1). As with cereal farms, lower output from cereals and oilseed rape is forecast to be a key driver. In terms of output from other crops, the picture will be mixed. A fall in output for potatoes will reflect a smaller crop area, while output from peas and beans is predicted to see little change as lower average prices will offset increases in crop area and yield. Output from sugar beet is expected to be around 48% higher than 2022/23 (when drought conditions took a toll) supported by higher prices, crop area and yield. Overall, output is forecast to be 12% lower than 2022/23, while input costs are expected to rise by 2% with the largest increases seen to general farming costs, seeds and property costs. Agri-environment payments are forecast to rise by 39% (£5,700) while the third year of progressive reduction to the Basic Payment is expected to result in a 40% (£14,800) fall compared to 2022/23.

1.3 Dairy Farms

At £50,000, average Farm Business Income (FBI) on dairy farms is forecast to be 78% lower than the exceptional high of 2022/23 (Figure 1.1 and Table 1.1). A substantial fall in livestock output will be almost entirely driven by a decrease in output from milk and milk products of around 19%. This reflects lower farmgate prices (which began to fall in early 2023 as markets readjusted after the volatility of 2022) rather than a decrease in the overall volume of milk or number of animals, which are expected to be little changed compared to 2022/23. Defra statistics (https://www.gov.uk/government/collections/milk-prices-and-composition) indicate that, at a UK level, the average farmgate price fell from 43.59p per litre to 37.83p per litre between March and December 2023. It is important to note the wide variation in milk prices with some farmers receiving considerably more or less than the average. Crop output is expected to fall by just under a third, most notably for wheat. 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. For this type of farm, the average Basic Payment is expected to be around £14,800 which represents around 30% of overall FBI. Agri-environment payments are predicted to rise by 43% to £11,400.

1.4 Lowland Grazing Livestock Farms

The average Farm Business Income on lowland grazing livestock farms is forecast to increase by 5% compared to 2022/23 to £23,000 (Figure 1.1 and Table 1.1). Higher livestock output will be largely driven by a 21% increase in output from sheep enterprises with prices for finished and store lambs remaining strong across the period. Output from cattle is forecast to show little change compared to 2022/23; although market prices for store and finished cattle will remain firm, closing values are expected to be lower than 12 months ago. Overall, output is forecast to increase by 1% with higher livestock output partially offset by lower crop output. Input costs are expected to be unchanged overall. The average Basic Payment is predicted to fall by around 36% compared to 2022/23 on lowland grazing livestock farms to £9,900 and agri-environment payments increase by 53% to £13,800.

1.5 Less Favoured Area (LFA) Grazing Livestock Farms

On LFA grazing livestock farms, average Farm Business Income is forecast to increase very slightly (1%) in 2023/24 to £26,000 (Figure 1.1 and Table 1.1). As with lowland farms, the main driver will be increased output from sheep enterprises, despite prices for breeding hill ewes and shearlings (which are an important source of income on these farms) being lower than 2022. Output from cattle enterprises is expected to fall reflecting lower closing valuations for trading stock compared to the opening values. Crop output is also predicted to fall by around a fifth. Overall agricultural output is expected to be 1% lower, however this decrease will be offset by a 1% fall in costs. While LFA livestock enterprises generally tend to be less reliant on purchased feed, the principal driver reducing costs is predicted to be lower feed costs. The average Basic Payment is forecast to fall by around £8,500 to £14,300 and agri-environment payments (often an important income stream for LFA farms) rise by 15% to £17,700.

1.6 Specialist pig farms

The Farm Business Survey (FBS) 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.

The average Farm Business Income for specialist pig farms in 2023/24 is forecast to rise by 34% to £91,000 (Figure 1.1 and Table 1.1). Lower input costs are expected to be a key driver, primarily lower feed costs (a major expense for this type of farm) which are predicted to fall by 23% as prices track price falls for feed wheat and barley. This is expected to more than offset increases to some other inputs such as general farming and property costs. Overall input costs are forecast to be 12% lower than 2022/23. Total output will also fall, but to a lesser extent than inputs. Compared to 2022/23, finished pig prices are forecast to be around 15% higher, although throughput is expected to fall. A similar picture is anticipated for store pigs and cull sows. For pig farms growing crops, output from crop enterprises is forecast to be nearly a third lower. The average Basic Payment for pig farms will fall by around £6,600 compared to 2022/23 to £11,400 while average agri-environment payments are expected to rise by around £600 to £4,600.

1.7 Mixed Farms

Compared to 2022/23, Farm Business Income is expected to fall by nearly half on mixed farms to £37,000 (Figure 1.1 and Table 1.1). This type of farm reflects all the enterprises found in the more specialist farm types reported above. Overall output is forecast to drop by 10% with a fall in crop output of 28% the primary determining factor. Output from livestock is expected to rise by 6% with the biggest contributor higher revenue from poultry and sheep enterprises. Input costs are forecast to fall (-3%), but this will not be enough to offset the lower output. It is anticipated that the average Basic Payment for mixed farms will fall by around £10,900 compared to 2022/23 to £18,100 and the average payments from agri-environment activities increase by half to £18,500.

2 What you need to know about this release

2.1 Availability of results

All Defra statistical notices can be viewed at:
www.gov.uk/government/organisations/department-for-environment-food-rural-affairs/about/statistics

Results from the Farm Business Survey, including time series in spreadsheet format, can be found at:
www.gov.uk/government/collections/farm-business-survey

The next release is expected to be in October/November 2024. The definitive publication date will be announced on the research and statistics webpage on gov.uk.

2.2 Contact details

Responsible statistician: Alison Wray

Public enquiries: fbs.queries@defra.gov.uk

For media queries between 9am and 6pm on weekdays:

Telephone: 0330 041 6560
Email: newsdesk@defra.gov.uk

2.3 National Statistics Status

Accredited official statistics are called National Statistics in the Statistics and Registration Service Act 2007. An explanation can be found on the Office for Statistics Regulation website. Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to.

These accredited official statistics were independently reviewed by the Office for Statistics Regulation in January 2014. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’.

You are welcome to contact us directly with any comments about how we meet these standards (see contact details above). Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

Since the latest review by the Office for Statistics Regulation, we have continued to comply with the Code of Practice for Statistics, and have made the following improvements:

• Reviewed and improved data presentation to better meet accessibility guidelines.

• Automated production of the statistics using Reproducible Analytical Pipelines (RAP).

• Reviewed and improved accompanying commentary.

3 Technical note

3.1 Accuracy and reliability of results

The forecasts shown in this release for 2023/24 are provisional, based on information available in early February 2024 for prices, livestock 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 (FBS) 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 November 2024 based on results for the 2023/24 FBS), could differ from these forecasts for several reasons. These include changes to the sample and to the weighting framework. In 2022/23, of the 1,359 farms that were included in the FBS target population around 357 farms came into the sample that weren’t present in 2021/22. In addition, the FBS weights are refreshed each year in line with the latest farm population data from the June Survey of Agriculture.

3.2 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.

3.3 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 owner-occupied, 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 (this does not cover all eligible farms for Direct Payments nor agri-environmental schemes). In 2022/23, this accounted for approximately 52,500 farm businesses. Between 2019/20 and 2021/22 the samples were slightly smaller as a result of Covid-19 restrictions on data collection. Following contractual changes, the 2022/23 sample was 1,359 farms. Data are collected 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 surveys so that they can be used to produce unbiased estimators of a number of different target variables. Any extreme Farm Business Income outliers are investigated and, if necessary, moved into their own strata and given a weight of 1.

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