The weather was a key influencer for incomes across all farm types; a very cold, late spring and an extremely hot, dry summer affected profitability

The dairy and red meat sectors have seen a significant decline in profitability in England, mainly due to higher costs and sustained bad weather.

Defra released the most recent set of accounts for Farm Business Income in England on 31 October.

The report shows a considerable decline in profitability across the dairy and red meat sectors.

It highlights the significant reliance on BPS payments for many farm businesses across the UK.







A variety of economic factors and challenging weather conditions have also contributed towards the general decline across livestock sectors.

Dairy has seen a significant decrease in average farm business incomes, dropping by 38% on the previous year to £73,700 for 2018/19.

Both fixed costs and variable costs increased year-on-year.

Direct agricultural income for the dairy sector accounted for £30,300 of the total farm income, BPS and agri-environment schemes accounted for £34,000 and diversified income averaged £9,400.

The average milk price rose by 2 percent in 2018/19 and output rose by 7 percent.

Despite these small rises in both price and production for the dairy industry, the more notable increases in on-farm costs outweighed this improvement.

Increases in the cost of feed, labour and machinery have all contributed towards the significant drop in incomes, with feed costs alone increasing by 22%.

However, dairy remains the sector with the highest percentage of farmers making a profit of over £75,000 per annum.

It also continues to have the highest average farm business income out of the livestock sectors outside of poultry.

Despite this, farming unions have recently highlighted how increased price pressures is putting the long term prosperity of the dairy sector at severe risk.

The latest financial results are sourced from the 2018/19 Farm Business Survey, covering the 2018 harvest and 2018 Basic Payment.

Figures are for the accounting year ending March/February, with the most recent year shown ending February 2019.