Changes to Farm Typology: Use of 2017 Standard Output Coefficients
Technical information on the 2017 Standard Output Coefficients used in the Farm Business Survey, England
Applies to England
The Farm Business Survey (FBS) provides information on the financial position and physical and economic performance of farm businesses in England. This paper contains information on the changes to farm typology as a result of updating the 2017 Standard Output Coefficients used in the Farm Business Survey, England (link to main Farm Business Survey collection page).
More information about the Farm Business Survey and the data collected can be found at: www.gov.uk/farm-business-survey-technical-notes-and-guidance.
The dataset for this paper, which includes the 2017 Standard output coefficients, can be downloaded at the following link : .
Background
Since 2010/11, farms have been assigned to a farm type using the European Commission’s (EC) classification system based on a farm’s Standard Output (SO) as laid out by Commission Regulation 1242/2008. This methodology was first applied (retrospectively) to the 2009/2010 survey data. Whilst the UK is no longer bound by the regulation, to maintain continuity, use of this classification system is continuing at present.
Standard Outputs (SOs) are a financial measure for the total value of output of any one enterprise, per head for livestock and per hectare for crops. For crops, this is the main product (e.g. wheat, barley, peas) plus any by-product that is sold, for example straw. For livestock it is the value of the main product (milk, eggs, lamb, pork) plus the value of any secondary product (calf, wool) minus the cost of replacement. Each farm is assigned a total SO by aggregating the SOs for its agricultural enterprises and assigning a farm type based on the proportion of the total SO derived from different enterprises. Given the diversity of farm production structures and systems, such groupings allow for more meaningful analysis of farm survey data.
The threshold for inclusion into the Farm Business Survey (FBS) in England is 25,000 euros of standard output. Any change to SO coefficients has an impact on both the survey population as well as the classification of farms.
New SO coefficients have been introduced for the 2023/24 FBS results. Previously published survey results for 2022/23 have been recalculated for comparability. This document illustrates the impact of these changes using the 2022/23 FBS data.
Changes to standard outputs
The Standard Output (SO) of an agricultural product is based on 5-year averages of price coefficients and are calculated separately for each International Territorial Level 1 (ITL1) geographical breakdown (a map of the ITL regions can be found on the ONS Open Geography Portal website). Average price coefficients are applied to reduce the impact of price changes on farm type classifications and are periodically revised leading to series breaks within the published FBS data. The coefficients previously used were averaged over the period of 2011 to 2015 (referred to as 2013 SOs). New SOs have been recalculated for the period of 2015 to 2019 (referred to as 2017 SOs). The 2013 and 2017 SO coefficients for England can be found on the ‘2013 and 2017 Standard Output Coefficients’ ODS file.
Impact on FBS population
Due to price and exchange rate changes, the 2017 SO coefficients vary from the 2013 SOs. This has resulted in SO increases for some farms and decreasing for others.
Based on the 2013 SO, the 2022/23 FBS population had 52,501 farm businesses which were above the FBS threshold. The change to 2017 SO typology resulted in 1,069 farms in the FBS population falling below the FBS threshold, while 244 farms saw their SOs rise above the FBS threshold. The net result was 825 fewer farm businesses having a total SO of at least 25,000 euros.
The updated 2022/23 population based on the 2017 SO is 51,676 farm businesses.
Impact on FBS typology
The typology methodology means that any changes to the SO coefficients will impact the farm type of individual farms. Just over 2% (1,233) of farm businesses above the FBS threshold (of 25,000 euros) saw their farm type change as a result of the change in SO. Table 1 illustrates the net impact of the changes to the farm type classification for the 2022/23 FBS population. A more detailed breakdown highlighting the movement between individual farm types can be found in the Impact of SO change table.
Both lowland and Less Favoured Area (LFA) grazing livestock farm types saw net decreases of 544 and 209 farms respectively. The majority of these farms fell below the FBS threshold as a result of moving to 2017 SOs. The general cropping farm type saw a similar decrease of 258 farms; this was driven by 140 general cropping farms falling below the FBS threshold and also a net loss from farms changing farm types.
Cereals, dairy, specialist pigs and specialist poultry farm types saw the smallest increases of farm numbers in the FBS population (72, 18, 41 and 36 respectively).
Table 1: Summary of impact of Standard Output coefficient changes on farm types within the FBS population, 2022/23
| Farm type | FBS population 2013 SO | Moved to below threshold | Moved to above threshold | Changed to a different farm type | Changed to this farm type | FBS population 2017 SO | Net Difference | Percentage Change (%) |
|---|---|---|---|---|---|---|---|---|
| Cereals | 13,243 | 106 | 1 | 191 | 368 | 13,315 | 72 | +1% |
| General Cropping | 5,290 | 140 | 14 | 392 | 260 | 5,032 | -258 | -5% |
| Dairy | 5,132 | 4 | 0 | 17 | 39 | 5,150 | 18 | 0% |
| Grazing Livestock (Lowland) | 12,115 | 499 | 38 | 157 | 74 | 11,571 | -544 | -4% |
| Grazing Livestock (LFA) | 6,498 | 209 | 6 | 57 | 7 | 6,245 | -253 | -4% |
| Specialist Pigs | 1,274 | 0 | 9 | 16 | 48 | 1,315 | 41 | +3% |
| Specialist Poultry | 1,396 | 4 | 13 | 5 | 32 | 1,432 | 36 | +3% |
| Mixed | 5,331 | 62 | 30 | 324 | 310 | 5,285 | -46 | -1% |
| Horticulture | 2,222 | 45 | 133 | 74 | 95 | 2,331 | 109 | +5% |
| Total | 52,501 | 1,069 | 244 | 1,233 | 1,233 | 51,676 | -825 | -2% |
Source: 2013 and 2017 Standard Output Coefficients dataset
Impact on FBS results
The change in the methodology introduces a break in the time series. Any longitudinal analysis covering the change in SOs should make note of the change. Results for the 2022/23 Farm Business Income (FBI) by farm type are shown in Figure 1 for both sets of SO coefficients to provide an indication of the impact of the changes. The full FBI time series can be found on the Farm Business Income publication.
The average Farm Business Income for all farms saw a very small increase (1%) in FBI as a result of the SO change, from £96,100 to £97,100. Cereals, dairy and horticulture all saw a very small decrease in their average FBI. Specialist poultry and pigs farms saw the largest changes in their average FBI, 10% and 7% respectively whilst the grazing livestock farms (both lowland and LFA) saw an increase of 6%.
Figure 1: Average Farm Business Income in 2022/23, calculated on 2013 and 2017 Standard Output coefficients
Source: Farm Business Income timeseries, 2023/24
Dataset
Link to Farm business survey - technical notes and guidance - GOV.UK