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Livestock farms could see lift in average farm business income
Thursday, 22 April 2021
By Bronwyn Magee
According to Defra’s latest farm business income forecast*, livestock farms in England are expected to see an increase in average farm business income for the 2020/21 year.
Average income on lowland grazing farms is predicted to rise by 78% in 2020/21 to £17,000, while LFA grazing farms are expected to see a 42% increase to average £32,000 for the year.
The value of output on cattle enterprises is expected to increase due to the higher average cattle prices seen over the past year, with tighter supplies and strong retail demand supporting the elevated prices. Similarly, sheep output values are also expected to increase as finished prices have continued to trend well above year earlier levels.
As such, an 18% increase in livestock output is expected for lowland farms, while an 17% lift is expected for farms in LFA. This comes as further increases are expected for LFA farms due to higher breeding stock prices and elevated lamb prices from July onwards.
Input costs have increased, particularly through higher feed costs, but also in machinery and other livestock costs. However, these increases are estimated to be outweighed by output gains. Furthermore, Agri-environment payments for LFA farms are expected to increase 6%, further contributing to increases in farm profitability.
*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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