Dairy farm income continues to rise

Average income for dairy farms was £248,700 in 2022-23. This is the highest value in the time series and an increase of 42% from the previous year.

Figure 3: Average farm business income, dairy and all farms, 2012-13 to 2022-23. 2022-23 prices.

Agricultural output increased by 26%, which was largely driven by increases in both average milk prices and average yields. Outputs from milk and milk products rose by 26%, or £182,700. Other contributors to the rise in agricultural output were cattle and crop by-products, forage and cultivations. Cattle output increased by £19,200, or 17%, whilst crop by-products, forage and cultivations rose by 234%, or £13,100.

Higher agricultural outputs more than offset large increases in feed and machinery costs.

Table 3: Farm business income (FBI) and contributions to FBI, dairy, 2021-22 and 2022-23. 2022-23 prices.

Dairy performance has varied a lot in the last ten years. Dairy farms are sensitive to market prices and experience fluctuating performance.

Dairy farms have a high average income compared with other farm types. However, while some dairy farms make large incomes, others will make a loss. They also have the largest average business size. The average standard labour requirement (SLR) for a dairy farm is 8, compared with an average of 3 across all farm types.