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DEFRA Forecasts Farm Business Income (FBI) Trends in 2023/24

Latest DEFRA Agricultural FBI Forecasts & Statistics

Here we examine the annual statistics report on farm business income in England, provided by the Department for Environment, Food & Rural Affairs. Delving into the intricate dynamics of agricultural economics, this report offers valuable insights into the financial landscape of farm businesses across the nation.

The forecast for Farm Business Income (FBI) in 2023/24 unveils a complex narrative across various farm types, with most sectors bracing for a downturn following exceptional highs in the previous year. Several factors are poised to influence farm incomes, ranging from lower output prices to continued increases in input costs.

Price Pressures and Input Expenses

Lower prices for key outputs, such as wheat and milk, are anticipated to be significant drivers of reduced farm incomes. These lower output prices are expected to be compounded by ongoing increases in input costs, presenting a challenging financial landscape for farmers across the board.

Sector-Specific Impacts

Cereal and General Cropping Farms: Substantial falls in average FBI for these sectors are projected, primarily driven by lower crop output, particularly in wheat. Factors such as decreased prices, yields, and crop areas contribute to this decline.

Dairy Farms: A decrease in the farmgate milk price is forecasted to be the primary driver behind the reduction in average FBI for dairy farms.

Grazing Livestock Farms: Both lowland and Less Favoured Areas (LFAs) grazing livestock farms are expected to see small increases in overall FBI, driven by increased output from livestock and reduced feed costs.

Specialist Pig Farms: Lower costs, particularly for feed, are expected to offset a fall in output, leading to an increase in FBI for specialist pig farms.

Government Support and Sustainability Initiatives

The 2023 Basic Payment is expected to decline by nearly 40% at the all-farm level, reflecting the third year of progressive reductions. However, payments from agri-environment activities are anticipated to increase, reaching £15,000 at the all-farm level, signaling a rise of approximately £4,000.

In conclusion, the forecast for FBI in 2023/24 paints a nuanced picture of challenges and opportunities across various farm sectors. As farmers navigate these complexities, strategic planning, resilience, and adaptation to changing market dynamics will be paramount. Moreover, leveraging available support mechanisms and embracing sustainable farming practices will be essential for fostering resilience and sustainability in the face of evolving agricultural landscapes.

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