Farm income falls in 2023-24 from record high

The Chief Statistician has released figures on 2023-24 farm incomes. These show that farm incomes experienced a sharp decline in 2023-24, after record highs in 2022-23. The downturn in incomes is attributed to three main factors. First, some agricultural output prices saw a large drop following exceptionally high levels of the last year. This was compounded by decreases in output levels, with adverse weather conditions playing a role in diminishing production. Finally, while some input costs show a modest decrease, costs did not fall at the same pace as output prices, putting additional pressure on profit margins.

Average farm income, a measure of farm profit after costs, fell 51% from the high of the previous year. At £35,500 for the average farm, income is at its lowest level since 2019-20.

Falls in cereal and milk prices resulted in large drops in income for arable and dairy farms. Average incomes of arable, dairy and mixed farms remain the highest across all farm types. But a larger proportion of farms within these farm types are unprofitable compared to the previous year. In 2023-24, 31% of cereal and dairy farms are loss-making.

Livestock farms, which make up 60% of commercial farms, continue to make a loss on their agricultural activity on average. Lowland cattle and sheep farm income fell by 87%, the largest drop in income across livestock farm types, largely driven by falls in livestock output. The proportion of unprofitable lowland cattle and sheep farms increased to 68%. The average income of Less Favoured Area (LFA) livestock farms decreased by a third.

Increases in costs for fertiliser were often offset by decreases in feed and fodder, land and property costs. Across most farm types, regular labour costs fell. In some types, this was offset by increases in casual labour costs.

Background

The full statistical publication with supporting data tables is available at:

Scottish farm business income: annual estimates 2023-2024 - gov.scot (www.gov.scot)

These results are calculated from the 2023-24 Farm Business Survey, which covers the 2023 cropping year and the 2023-24 financial year. The Farm Business Survey is an annual survey of approximately 400 commercial farms with economic activity of at least approximately £20,000. Farms which do not receive support payments, such as pigs, poultry and horticulture, are not included in the survey.

Trade disruption and tightening supplies following Russia’s invasion of Ukraine, led to volatility and high cereal prices in 2022. Prices of commodities such as wheat stabilised somewhat during 2023.   

Official statistics are produced in accordance with the Code of Practice for Statistics.