Posted 1 August 2017 By Mike Shawyer, Partner
In Rural and Landed Estates
The annual government report on agriculture has recently been issued. At 110 pages it is not easy reading, but it certainly sheds light on an industry which we, as accountants, normally only observe on a piecemeal basis.
Five interesting things
- The average age of farmers rose from 56 to 59 between 2000 and 2013. Only 3% of farmers are under 35.
- Between 1973 and 2016, farm productivity has risen by 50%, and between 1988 and 2016, pesticide and fertiliser use per hectare dropped by about 25%.
- Cereal yields per hectare (ha) have not shown huge increases recently. The average wheat yield in 2016 was 7.9 tonnes per hectare (t/ha) compared to 7.7t/ha in 1984, and the comparisons for other cereals are similar. In contrast, sugar beet yields have risen by almost regular annual increments from 34.6 t/ha in 1980 to 66 t/ha in 2016, having reached a staggering 80t/ha in 2014.
- There are fewer animals on farms than there used to be, but they are bigger. Between 1984 and 2016, the national beef herd dropped by 3.4m (25%) and the pig herd fell by 3m (60%). During the same period, cattle weights rose by 31% and pigs by 34%. There are also 45% fewer dairy cows, but they are still producing almost the same amount of milk. Only sheep numbers and sizes remain virtually unchanged.
- The perception of “rich farmers” is simply wrong. The average farm achieved a profit in 2016 of £18,800, down from £20,200 in 2015 and lower in real terms than any year since 2007. In 2016, 26% of farms made a trading loss and 45% made profits of less than £10,000. Since the average annual farm subsidy is about £15,000, we can deduce that over 50% of holdings would have made a loss without that subsidy.
The 2016 report gives a snapshot of an industry that has achieved staggering increases in efficiency but still struggles to turn a commercial profit. It shows farmers growing older, working harder, producing more and being paid less.
To discuss this or anything else please contact Mike Shawyer on 01793 818300 or send him an email.