Farm Incomes Perked Up For 2011

THERE was good cheer for the farming community as the Department of Agriculture and Rural Development (DARD) has published the provisional figures for farm incomes in 2011. There was an overall increase in farming income and some sectors performed better than others.

Agriculture Minister Michelle O’Neill warmly welcomed the increase in agricultural income for 2011, indicated by DARD figures.

The Minister said: “It is encouraging to see a rise in overall farm income, which shows the agricultural industry is continuing to do well in these difficult economic times.

“However, the continuing high costs of inputs, such as feed, fertilizer and fuels, and weakening euro will continue to challenge the industry.

“It is also encouraging that in 2011 farm income was greater than Single Farm Payment (SFP). However, SFP still represents 87 per cent of farm income which underlines the importance of the forthcoming negotiations on the reform of the Common Agricultural Policy (CAP).

“There is no doubt we need a strong, well funded CAP that provides support and fosters improved competitiveness without overburdening us all with red tape and I am committed to fighting for these outcomes in the ongoing CAP reform negotiations.”

AGGREGATE INCOME

Provisional figures indicate the ‘Total Income from Farming’ (TIFF) in Northern Ireland increased by 20.8 per cent from £255million in 2010 to £308million in 2011. 

TIFF represents the return on own labour, management input and own capital invested for all those with an entrepreneurial involvement in farming.

Farming in the old days in County Down. (Photo courtesy of Down County Museum).

The value of Gross Output increased by 13.3 per cent for the livestock sector and this was primarily due to an increase in the value of milk and cattle output. Dairying remained the largest contributor to total Gross Output and its output value is estimated to have increased by 15.3 per cent compared with 2010. The volume of raw milk produced in Northern Ireland increased by 6.2 per cent and the average farm-gate price of milk was 8.8 per cent above 2010 levels. 

The output value of all cattle increased in 2011 by 19.5 per cent to £375million. This was due to a rise in price which more than offset a decrease in the volume of output. The value of output in the sheep sector decreased by 9.3 per cent in 2011 to £55million. This was due to a reduction in the volume of output which was only partially offset by an increase in sheep prices.

There were gains in the value of outputs for the intensive livestock enterprises, with increases of 9.3 per cent to £104 million, 10.5 per cent to £239million and 5.2 per cent to £55million for the pig, poultry and egg sectors respectively. These were due to increases in both volumes and prices.

The output value for field crops increased in 2011 by 12.2 per cent to £80million. This was predominantly as a result of increased producer prices. In 2011, annual average producer prices for barley, wheat and oats increased by 32.4 per cent and 25.9 per cent and 24.8 per cent, respectively. There were increases in the value of barley output of 30.9 per cent to £25million, in wheat of 25.6 per cent to £17 million and in oats of 19 per cent to £2.3million. The value of output of potatoes increased in 2011 by 4.5 per cent to £23million. This was as a result of an increase in the volume of production.

The total value of the Single Farm Payment estimated to have accrued in 2011 was £267million, representing a net decrease of 1.6 per cent compared with 2010. In 2011 there was a higher modulation rate deduction in 2011 compared with 13 per in 2010.

Total Gross Input increased by 9.5 per cent in 2011 to £1.27billion. Feedstuff costs, which account for 51.3 per cent of the Gross Input figure, increased by 11.5 per cent to £651million in 2011. A 2.1 per cent fall in the volume of feedstuff purchased was more than offset by a 14.6 per cent rise in the price per tonne.

In 2011, there was an increase of 33.1 per cent in the price of fertiliser. The total cost of fertiliser input rose by 8.4 per cent to £78million as a result of this increase in price, which was partially offset by an 18.5 per cent reduction in the volume of fertiliser purchased.

Total machinery expenses increased by 11.8 per cent to £143 million in 2011. The increase was due to a 4.4 per cent rise in machinery repair costs and a 19.3 per cent rise in the cost of fuel and oils.

A detailed PDF document covering the period 2007–2011 and containing all the key figures used to derive TIFF in Northern Ireland can be downloaded from the DARD Website www.dardni.gov.uk/provisional_agricultural_income_figures_2007_-_2011

Figures for the United Kingdom will not be released until April 2012 and a breakdown of TIFF for the UK will not be available until then.

FARM LEVEL INCOMES

Farm Business Income by type of farm for 2010/11 and forecasts for 2011/12 are presented in Table 1 http://www.dardni.gov.uk/farm_level_incomes_2010_2011_and_2011_2012

These income results are based on farm accounts collected for the Northern Ireland Farm Business Survey (FBS). This is a representative sample of farms larger than 0.5 Standard Labour Requirements. The income figures presented are for accounting years with an average ending date of mid February.

Average Farm Business Income measured across all farm types is expected to increase from £29,159 in 2010/11 to £30,673 in 2011/12, i.e. an increase of £1,514 or 5 per cent per farm.

For individual farm types, the results show that Farm Business Income is expected to increase between 2010/11 and 2011/12 on only Dairy farms. The increase in incomes for Dairy farms is the result of higher milk prices in the 2011/12 accounting year. It is important to note, however, the increase in milk prices was counteracted to some extent by higher input costs, in particular for feeds and fertilisers.

The results also show Farm Business Income is expected to fall by varying amounts on Cereals, Cattle and Sheep (LFA), Cattle and Sheep (Lowland), Pigs and Mixed farms for 2011/12 when compared with the previous year. All these farm types experienced higher product prices in 2011/12 but this was not enough to offset increases in input costs and, therefore, a reduction in incomes. The most notable increases in input costs for each farm type were fertilisers for Cereals farms, feeds for Pigs farms, and feeds and fertilisers for Cattle & Sheep (LFA), Cattle & Sheep (Lowland) and Mixed farms.

Farm Business Income was introduced in 2008 as the headline measure of farm income following consultation by DARD in 2006-07. In light of views expressed during the consultation, it was decided the previous headline measure, Net Farm Income, would continue to be published for an interim period, but as a secondary measure. Therefore, average Net Farm Income by farm type for 2010/11, along with forecasts for 2011/12 are presented in Table 2 http://www.dardni.gov.uk/farm_level_incomes_2010_2011_and_2011_2012.htm

A detailed analysis of farm incomes by type and size of farm in 2010/11 will appear in the report ‘Farm Incomes in Northern Ireland 2010/11’ which will be published on the DARD website http://www.dardni.gov.uk/agricultural-statistics-farm-business-survey in March 2012.