Arable Up
Substantial increases in average Farm Business Incomes are expected on cereal and general cropping farms reflecting much higher prices for cereals, oilseed rape and potatoes. Drilling conditions in the autumn of 2009 enabled a return to winter cropping and, although average yields were lower and input costs higher, the sharp rise in crop prices is expected to lead to a significant increase in output. The strengthening of Sterling relative to the Euro between September 2009 and September 2010 will however reduce average single farm payments by approximately 8 to 10 percent for these farm types.

Livestock and Dairy Down
On dairy farms, Farm Business Income is forecast to fall by around 25% compared to 2009/10. Although total farm output is expected to increase reflecting a higher average milk price for the year ending February 2011, higher costs, particularly those associated with purchased feed, are forecast to more than offset the increased output. Both prices and quantities of purchased feed are likely to rise due to the lower yields of forage caused by the unfavourable growing conditions in 2010. The high price of straw for bedding is expected to have a further impact on profitability in this sector.

Grazing livestock farms are also expected to see a marked fall in average incomes in 2010/11. Input costs are expected to rise, particularly for purchased concentrate and forage feeds and for fuel, and although output from the sheep enterprise is expected to be higher, a decline is anticipated for the beef enterprise. This results from lower prices for fat and store cattle along with a fall in the closing valuation compared to the previous year.

Average Farm Business Income is forecast to fall on specialist pig and poultry farms in 2010/11. This is primarily a result of higher feed costs combined with lower prices for eggs and pigmeat reducing output. For specialist pig farms the falling value of trading livestock towards the end of the accounting year is also expected to lead to a considerable change in the year on year closing valuation.

Mixed farms fall by 40%
Incomes on mixed farms are also expected to fall by around forty percent in 2010/11. Overall farm output is forecast to increase slightly, largely due to a substantial increase in output from the cereal and dairy enterprises more than offsetting a marked fall in output from the cattle enterprises and a lower single farm payment. However higher costs, notably for feed and fuel, are expected to more than offset this modest increase and lead to an overall fall in income compared to the previous year.