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Average Farm Business Income for the dairy sector forecast to rise for 2024/25
Tuesday, 25 March 2025
Incomes fell in 2023/24
In 2023/24, Defra reported lower average Farm Business Incomes* for all farm types, except for specialist pig farms and specialist poultry farms. This followed a higher average income year in 2022/23.
On dairy farms, average Farm Business Income was 68% lower, at £70,900, with a fall in the farmgate price of milk being the primary driver.
The proportion of income from agriculture alone decreased from 58% of average dairy farm incomes in 2020/21 to 49% of income in 2023/24, showing a greater reliance on non-agricultural income. Income from agri-environment and other payments (12% share) and diversification (15% share) increased in share, while BPS payments (25% share) decreased as the scheme phases out.
Average dairy farm business income 2023/24
Dairy farm incomes for 2024/45 forecast to rise
According to Defra’s latest Farm Business Income Forecast for 2024/25, Average farm business incomes for dairy farms in England are forecast to more than double compared to 2023/24 to reach £176,000. This would represent a year-on-year increase of 150% from lower average incomes in 2023/24.
Average Farm Business Income and forecast on dairy farms in England
Recovery of the farmgate price of milk is expected to drive the growth.
It is important to note that the Farm Business Income forecast is a useful indication at a total dairy industry level but is a blunt tool and individual farms will see a wide variation depending on their farm size, systems and contracts. Dairy farming can generally be expected to see large variance in income due to the high degree of volatility seen in global dairy commodity markets.
The extent to which the Milk to Feed Price Ratio (currently in the expansion zone) will incentivise production during the season was discussed in the latest Milk Forecasting Forum. Less favourable factors such as the decline in herd size and the threat of BTV on milk production are also considerations. The full forecast will be published before the end of March.
*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. In essence, Farm Business Income is the same as Net Profit.
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