Total farm incomes fall, but egg and poultry producers benefit from boost in demand

Latest figures published by Defra show the total income from farming fell by £929 million (17%) to £4.69 billion in 2018. Agriculture contributed £9.58bn or 0.51% to the national economy (Gross Value Added), a decrease of £626m (6%) on the year. 

This was driven by volatile weather last year disrupting crop production. However, the value of total livestock output rose by 3% to £14.8bn. The main contributors to this decrease are the rise in animal feed (+£509m), goods and services (+£358m), fertiliser (+£116m), energy and labour costs (+£110m each). Gross value added at basic price, which identifies agriculture’s contribution to the Gross Domestic Product (GDP), fell by 6% (£626m) to £9.56bn. 

The value of eggs rose by £17mto £641m, entirely volume driven as throughput at egg packing stations rose by 5.2% putting downward pressure on price (-2.3%).

Poultry meat rose in value by £208m to £2.62bn, the highest recorded value. Continued expansion of the sector to meet demand boosted production (+5.7%) with prices 2.8% higher than the previous year.

Energy costs on UK farms rose by £113m to £1.35bn, global oil prices continued to rise in 2018, pushing up energy costs however weather conditions and efficiency savings helped reduce usage on farm. Other goods and service costs rose by £358m to £3.6bn reflecting the increased demand for straw by the livestock industry. 

The total value of compensation to employees was £2.74bn, a rise of £112m In line with the national living wage increase average labour costs were higher whilst labour volume was slightly down on the previous year. In 2018 agriculture provided 1.17% of jobs in the United Kingdom.

Responding to the publication of the figures, NFU President Minette Batters said: “These figures are a stark reminder of the impact last year’s weather has had on British farming and demonstrates just how exposed agriculture is to increasingly volatile weather.

“Food and farming contributes £122bn to the economy, and this figure has risen steadily over the years. It clearly demonstrates the strategic importance of farm businesses to the country and the farmers and growers that provide food for the nation, all while caring for our countryside. This must be recognised by the Government.”

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