Data released on Thursday by Defra show falling farm incomes between 2014 and 2015. Reacting to the release, NFU officials said a significant drop in commodity prices is a major factor behind the falling incomes.
 
Defra’s release focuses on income from March 2014 to February 2015, and shows a decline in the profitability of almost all farming sectors, emphasising the volatility challenges for farm businesses. The statistics, which cover the 2014 harvest and the 2014 SPS payment, update forecasts published on 29th January.  
 
The NFU highlighted the impacts of falling prices in areas where declines have continued since February, such as pig farming, dairying and lamb production.

The union said commodity prices are in a markedly different place than they were as recently as two years ago. UK farmgate milk prices have now fallen for 21 consecutive months while lamb prices failed to reach early season highs in 2015. The May/June average lamb price was at its lowest level since 2008, down some 20% on 2014 levels.

Wheat and sugar beet prices are also currently at multi-year lows.  
 
Responding to the figures, NFU Deputy President Minette Batters said, “While the short term focus is on income and cash flow, Government must prioritise working with the NFU and its partners throughout the food chain ensuring that we a achieve a better functioning supply chain, only then will farmers have the confidence to invest in the future and build resilience.”
 
Batters said the NFU wants government to introduce favourable policies and "embrace technological advances", which she claimed would allow farming to thrive; the union has pushed for deregulation, embraced GM crops and reacted against moves in the EU to restrict certain agricultural chemicals over concerns about their effects on health and the environment.
 
However, she also called for greater support form other supply chain actors, adding, “It’s critical that others in the food chain now recognise the financial pressures that farmers, as suppliers of raw materials, are facing. There are some positive initiatives out there. More widely the supply chain can help by working to put in place the mechanisms that help farmers manage volatility.”
 
She concluded, “During these challenging times, it is crucial that there are no delays to CAP payments, which would only compound cash flow concerns. This includes ensuring BPS is paid in a timely manner early in the payment window and also making pillar 2 payments as early as possible.”

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