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Cereal Farm Business Income Forecast – Defra Research 2024

Farm Business Income Research For Cereal Farmers

The latest Farm Business Income forecasts for cereal farms in England for the 2023/24 period paint a sobering picture after two years of exceptional performance. The average Farm Business Income (FBI) for cereal farms is projected to plummet by approximately three-quarters compared to the previous period, settling at £34,000.

A Downturn on the Horizon – Factors at Play

The primary driver behind this significant decline is a substantial reduction in cereal output, particularly in wheat. Wheat, encompassing both milling and feed varieties, is anticipated to witness a notable decrease in output. This decline is driven by several factors, including a return to wheat prices reminiscent of those observed in the 2020/21 period. Global maize supplies, coupled with adaptations to the situation in Ukraine, are exerting downward pressure on wheat prices.

Furthermore, adverse weather conditions leading to a prolonged and challenging harvest, in contrast to the favorable conditions of the previous period, are expected to result in losses and lower quality grain.

Balancing Act: Input Costs vs. Crop Prices

The challenges extend beyond wheat, with barley and oilseed rape crops also forecasted to experience diminished yields alongside declines in average prices. These lower crop prices, unfortunately, are unlikely to offset the upward trajectory of input costs.

Key inputs such as seeds and crop protection are anticipated to witness a 2% increase compared to the previous period, exacerbating the financial strain on cereal farmers.

Seeking Silver Linings

Amidst the gloomy projections, there are glimmers of hope. Income from agri-environment activities is expected to surge by just over a third, reaching £18,200. This highlights a potential avenue for diversification and additional revenue streams for cereal farmers, emphasizing the importance of embracing sustainable farming practices. Moreover, while the average Basic Payment on cereal farms is predicted to undergo a significant decrease of approximately 40%, amounting to £21,300, it remains a vital component of farm income.

In conclusion, the forecasts and projections for cereal farm business income in the 2023/24 period paint a challenging picture. However, with careful management, adaptation to changing market dynamics, and exploration of alternative revenue streams, cereal farmers can weather the storm and emerge stronger on the other side. As we forge ahead, let us remain vigilant, innovative, and united in our commitment to sustaining the vitality of the agricultural sector.

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