Central Southern England Farm Incomes – University of Reading
14 January 2003Regional results from the annual Farm Business Survey for the 2001 harvest year show that since incomes peaked in 1995, a large proportion of farms are failing to make any profit at all. The latest results from central southern England show that 60% of the farms in the whole sample fall into this category, with the figure for cattle and sheep farms rising to 87%, followed by the small cereal farms where 83% incurred losses. Even among the dairy farms in the sample, almost 40% recorded a negative margin.
Although there had been a slight improvement in profitability1 compared with the previous year, the average margin of £12.6 per hectare for farms in the whole sample represents a mere £2,293 per holding (the corresponding figure in 2000 was -£1,800). This leaves living expenses, interest charges and funds for re-investment in the farm business to be mainly funded by outside credit sources.
For the sample as a whole, total farm output increased by 4%, which mainly reflected higher production in the dairy sector. By contrast, output on the arable farms in the survey fell reflecting the difficult planting conditions in Autumn 2000. In the cattle and sheep sector, the outbreak of Foot and Mouth Disease impacted on both costs and returns. Among the cost items, there were well above average increases in feed costs (+13%) and in the cost of fertiliser (+14%). The tight control of fixed costs that has been a feature of the results over the past few years continued, although the reduction of just under 1% was rather less than has been evident in recent years, suggesting that the scope for further economies is limited.
As usual, the results reveal some wide ranging differences between farm types2. The data shows that dairy farms fared best of all in 2001/02, recording an average profit of £17,737 per farm. In stark contrast, the average cattle and sheep farm incurred a loss of -£14,893, with the small and large arable farms making losses of -£10,621 and -£5,199 respectively.