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UK Farming Statistics


30 April 2015

UK Agricultural Industry Total Factor Productivity 2014 - 1st EstimateUK Agricultural Industry Total Factor Productivity 2014 - 1st Estimate


UK Farming Statistics

Total factor productivity of the UK agricultural industry 2014 – 1st estimate

This release presents the first estimate of total factor productivity of the UK agricultural industry and volume indices for 2014. Total factor productivity of the agricultural industry in the United Kingdom is an indicator of how well inputs are converted into outputs giving an indication of the efficiency and competitiveness of the industry. Year to year variations in total factor productivity may be due to factors outside the farmer’s control, such as, weather conditions or disease outbreaks.

For the first time land is included in the productivity calculation which brings it in line with other countries who produce the productivity indicators. The introduction of land has slightly reduced the overall increase in productivity. There have also been other changes to the indicator this year which are highlighted in the revision section of the document.

Key points:

• Total factor productivity of the agricultural industry in the United Kingdom is estimated to have risen by 6.0% between 2013 and 2014. This follows two years of poor productivity when bad weather conditions affected production. Compared to 2011 productivity is up by 1.7%.

• The volume of all outputs rose by 6.5% driven by a 13% increase in the volume of all crops following a year of high cereal yields. There was a 0.4% increase in volume of all inputs

• Since 1973 total factor productivity has increased by 52% driven by a 34% increase in the volume of outputs and a 12% decrease in the volume of inputs.

Productivity

While weather conditions or other factors such as disease outbreaks may have short term impact on agricultural productivity, it is developments in productivity over a longer period that constitute one of the main drivers of agricultural income. Productivity growth means that more value is added in production and more income is available to be distributed.

Latest figures

Total factor productivity of the agricultural industry in the United Kingdom is estimated to have risen by 6.0% between 2013 and 2014. Following two years where productivity was negatively affected by the weather 2014 was a marked change. Despite above average rainfall at the start of the year, with floods in south west England the remainder of the year was conducive to good crop growth. As a result in 2014 we saw record cereal yields which led to a 13% increase in the volume of crops produced in 2014. Weather does not have such a large influence on animal production but there was still a 2.9% increase in the volume of livestock output. This increase was largely down to an 8.2% increase in milk production, which was the highest level of production since 1987. Overall the volume of all outputs is estimated to have increased by 6.5%. In 2014 there was only a small change in the volume in inputs: 0.4% increase. This was due to a small increase in the use of animal feed, partly to achieve the higher milk yields, as well as an increase in the consumption of fixed capital.

2014 compared to 2011

As productivity in 2012 and 2013 were negatively affected by the bad weather it is interesting to compare 2014 against 2011. Again we see increase in total factor productivity but now a more moderate 1.7% increase. There was a 3.8% increase in the volume of all outputs offset by a 2.1% increase in all inputs.

The volume of crop output rose by 4.7% between 2011 and 2014, compared to 13% between 2013 and 2014. The key driver for this change was the increase in cereals where there was a 14% increase between 2011 and 2014, reflecting the record yields seen in 2014.

For livestock there was a 2.6% increase between 2011 and 2014. This increase was driven by the high milk production in 2014 where there was a 7.1% increase in milk output.

Compared to 2011 there was a 2.1% increase in the volume of all inputs used. There was a 3.0% increase in the volume of intermediate consumption used driven by a 21% increase in plant protection products due to increased disease pressures in 2014.

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