November 1, 2011
English cereal farmers' incomes increase
England's cereal farmers saw their incomes having large increases last year, according to the farming ministry Defra.
Figures produced by it for England only showed those growing grain, oilseeds and potatoes benefiting significantly from price improvements.
Farm business incomes, in effect net profits to the owners before their labour costs, showed real-term gains of between 49-97% to GBP57,300-111,700 (US$92,104-179,546) in the year to February 28 for those with cereal, general cropping and mixed farming businesses.
Defra said higher milk prices helped dairy farmers, but they were hit by increased feed and fertiliser costs which were each estimated to be up 30%. Average incomes were GBP66,200 (US$106,409), up 7%.
The ministry calculates its figures from face-to-face interviews with 1,900 farm businesses. It said subsidies continued to make an important contribution to average farm incomes for many farm types, although less so in the latest financial year.
NFU England said the figures showed the mixed financial fortunes facing farmers.
The chief economist of Defra said the increase in incomes on cereal farms was expected and represented a turnaround from the losses made the year previously when prices were below production costs.
Subsidies to livestock farms were critical in ensuring they remained in the black.
The chief economist also added, "Although the dairy industry experienced a 7% rise in income, it was not only the improved price of milk that made the difference. Defra points to the increased cropping output on some dairy units as the reason farmers were partly able to offset higher feed and fertiliser costs. This underlines the on-going need to ensure dairy farmers get a fair return at the farm gate for their milk."
He also said while farm-gate prices might be stronger, this was not reflected in the bottom line for many farm businesses. He added, "Our big challenge in the long term is to produce more and impact less. That requires efficiency gains and productivity increases, and in turn that needs investment. Farmers will only invest if they are profitable."