Total income from farming recovers

Total income from farming is the official measure of the profit (output minus costs) gained by the agricultural industry in Scotland.

Estimates are provided in current (nominal) and real (constant 2024) prices. Real (constant 2024) prices use the latest gross domestic product GDP deflators. Inflation is unusually high in 2023 at around 7%.

Initial estimates for 2024 predict a strong recovery from a 5-year low in 2023. Total income is estimated to reach around £1.3 billion in 2024, an increase of £0.4 billion (49%). In real terms, adjusted for inflation, this is a 44% increase. This increase is driven by decreased total input costs compared to the previous year resulting in a higher profit margin.

At the time of publication, not all data are available for 2024 and this estimate is subject to a degree of revision in future years as more data become available.

Figure 1: Total income from farming estimates for Scotland, 2004 to 2024. Current (nominal) and real (constant 2024) prices.

Total income fluctuates year to year, but has been generally increasing over time. Figure 1 shows total income from farming in Scotland over the last 20 years.

In real terms, total income from farming rose 20% over the last ten years. The value of farming output rose 10%, outpacing a 3% rise in total input costs.

For more recent years, comparisons are made in current (nominal prices). The real terms (constant 2024 prices) values are also provided for context.

The rest of this section provides commentary on changes in recent years from 2020 to 2024 as this is the first release of total income from farming since 2020 figures were released.

High prices, particularly milk, cereal and red meat, drove increasingly high profit margins across 2020 to 2022, despite increasing costs.

Total income fell in 2023 as many market prices dropped and costs continued to increase. In 2023, total income was at a 5-year low of around £885 million (£920 million in real terms).

In 2023, average farmgate milk prices and cereal prices dropped from exceptional highs seen in 2022. But these and many other prices remained strong, and gross output remained relatively high despite the decrease from its exceptional 2022 figure. Gross output decreased by 1% to just below £4.6 billion from its 2022 high of £4.6. In real terms, this is an 8% decrease to around £4.8 billion from a high of £5.2 billion in 2022.

Profit margins in 2023 were strongly impacted by increasing costs across a wide range of inputs. Total costs increased by £0.3 billion (9%) to £4.3 billion in 2023. Large increases were seen in costs of labour, fertiliser and interest payments. In real terms, total costs increased by £0.1 billion (2%), to £4.4 billion in 2023.

Initial estimates for 2024 predict a strong recovery of total income from farming from its 5-year low in 2023. Continuing high prices support a stable gross output around £4.6 billion in 2024. A decrease in total costs by nearly £0.5 billion (11%) is predicted to drive an increased profit margin. In real terms, output value decreased by 4% and total costs decreased by 14%. Total costs are estimated at £3.8 billion.

The 2024 estimates are subject to a degree of revision in future years as more data become available. As total income is the difference between two larger estimates of total input and output, small changes in these estimates can result in large revisions to the estimate of total income. 

Table 1: Total income from farming (TIFF) and contributions to TIFF, 2023 and 2024, current (nominal) prices and percentage change (current and real terms).