TheBeefSite.com - news, features, articles and disease information for the beef industry

UK Total Income from Farming


30 November 2012

UK Total Income from Farming 2011 – 2nd EstimateUK Total Income from Farming 2011 – 2nd Estimate

Total Income from Farming for 2011 is estimated at £5,567 million, an increase of £1,084 million (24%) compared to 2010.
Total Income from Farming in the UK

  • In real terms, after adjustment for the effect of inflation, Total Income from Farming rose by £851 million (18%); this represents the best performance for the agricultural industry since the mid-1990s.
  • Total Income from Farming per annual work unit (AWU) of entrepreneurial labour (farmers and other unpaid labour) is estimated to have risen by 16% in 2011 to £30,000 in real terms. Over the longer term, Total Income from Farming per Annual Work Unit (AWU) of entrepreneurial labour has performed better than Total Income from Farming owing to a decline in the number of farmers and other unpaid workers.

Agricultural industry income trends in the UK (in real terms)

Main findings

Values are expressed in current prices, i.e. based on prices in the year in question, except where otherwise stated.

Total Income from Farming is estimated to have increased by £1,084 million (24%) to £5,567 million in 2011 compared to 2010. In real terms, after adjustment for inflation, Total Income from Farming is estimated to have risen by £851 million (18%). In the longer term, 2011 represents the best performance for the agricultural industry in the UK since the mid-1990s.

The value of gross output at basic prices rose by £3,043 million (15%) in 2011 to £23,638 million. The value of total crop output rose by £1,480 million (20%) to £8,905 million, largely due to increases in the value of output of wheat, barley and oilseed rape. The value of total livestock output rose by £1,392 million (12%) to £12,610 million, due mainly to increases in the value of output for cattle and sheep produced for meat, and milk.

The value of output of wheat increased by £559 million (35%) to £2,168 million and the value of output of barley increased by £320 million (60%) to £857 million owing to higher quality crops, increased demand and significantly higher prices compared to 2010. The value of oilseed rape rose by £440 million (63%) to £1,137 million owing to an increase in the area planted, high yields and strong prices. The values of output of wheat and barley have doubled since 2006, while the value of oilseed rape has increased from £310 million to £1,110 million in the same period.

The value of output of cattle produced for meat rose by £430 million (20%) to £2,584 million owing to increased production and strong prices due to high demand, especially for manufacturing beef. The value of output of sheep rose by £170 million (17%) to £1,149 million owing to increased production and record prices due to tight supplies in the United Kingdom and globally. The value of milk production rose by £413 million (12%) to £3,742 million owing to an increase in production helped by favourable weather conditions and higher prices paid to farmers. The value of output of livestock has risen by 60% since 2006 while the value of milk output has risen by 50% in that period.

The value of intermediate consumption, the goods and services consumed or used as inputs in the productive process, is estimated to have increased by £1,372 million (10%) to £14,874 million. The value of all inputs consumed has increased, particularly those for animal feed, energy and fertilisers.

The value of consumption of animal feed rose by £426 million (11%) to £4,385 million reflecting increases in prices for cereals and oilseed rape in particular though there is a lag between price increases in the raw ingredients and compound feed. The value for energy, principally motor and machinery fuels, is estimated to have increased by £170 million (14%) to £1,371 million and the value of fertilisers consumed is estimated to have increased by £275 million (20%) to £1,626 million, reflecting higher prices for these commodities. The cost of animal feed, energy and fertilisers have increased significantly in recent years by 71%, 65% and 100% respectively since 2006.

The increase in the value of output more than offset the increase in the value of intermediate consumption leading to an increase in Gross Value Added at basic prices of £1,671 million (24%) to £8,764 million.

Net Value Added at factor cost, which is gross value added at basic prices adjusted for consumption of fixed capital, other taxes on production and other subsidies on production, is estimated to have increased by £1,222 million (17%) to £8,450 million. The value of consumption of fixed capital, which is capital, such as equipment, buildings and the breeding herd, used up in the process of generating new output, is estimated to have increased by £312 million (9.5%) to £3,610 million. The value of other subsidies on production, which are payments received as a consequence of engaging in agricultural production but which are not linked to production, principally the Single Payment Scheme and agri-environment schemes, fell by £129 million (-3.5%) to £3,418 million.

Compensation of employees, which is total remuneration in cash or in kind payable to employees in return for work done, is estimated to have increased by £107 million (4.8%) to £2,315 million.

Description of Total Income from Farming

Total Income from Farming is income generated by production within the agriculture industry including subsidies and represents business profits and remuneration for work done by owners and other unpaid workers. It excludes changes in the values of assets, including stocks, due to price changes but includes non-agricultural activities such as further processing or tourist activities where these cannot be separated from the agricultural business. It is the preferred measure of aggregate income for the agricultural industry conforming to internationally agreed national accounting principles required by the UK National Accounts and by Eurostat.

Total Income from Farming per Annual Work Unit (AWU) of entrepreneurial labour is a related measure. It expresses Total Income from Farming in terms of annual work unit of entrepreneurial labour input. An annual work unit of entrepreneurial labour input corresponds to the input of one person with an entrepreneurial interest in the farm business who is engaged in agricultural activities on a full-time basis over an entire year. Annual work units are used rather than the number of individuals so to take account of part-time and seasonal work.

Total Income from Farming is designed to show the performance of the whole of the agricultural industry. A measure of farm incomes, Farm Business Income, designed to compare performance across different types of farming, is available in the publication Farm Accounts in England on the Defra website at http://www.defra.gov.uk/statistics/foodfarm/farmmanage/fbs/publications/farmaccounts/.

DOWNLOAD REPORT:- Download this report here

Our Sponsors

Partners


Seasonal Picks

Animal Welfare in EPS - 5m Books