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Northern Ireland agricultural incomes in 2012

The Department of Agriculture and Rural Development (DARD) has published the provisional figures for farm incomes in 2012.
Thursday, 31 January 2013

Aggregate income

Provisional figures indicate that the ‘Total Income from Farming’ (TIFF) in Northern Ireland decreased by 50.6% (52.2% in real terms) from £290 million in 2011 to £143 million in 2012.

TIFF represents the return on own labour, management input and own capital invested for all those with an entrepreneurial involvement in farming.

Total Gross Output for agriculture in Northern Ireland rose by 0.7% in 2012 to £1.7 billion. The value of output for the livestock sector as a whole increased by 3.5%, due primarily to an increase in the value of cattle output. Although dairying remained the largest contributor to total Gross Output, its output value is estimated to have decreased by 6.0% compared with 2011. The volume of raw milk produced in Northern Ireland decreased by less than 1.0% and the average farm-gate price by 5.5% compared with 2011.

The output value of cattle increased in 2012 by 16.2% to £409 million. This was due to a significant rise in price which more than offset a fall in the volume of output. The value of output in the sheep sector increased by 10.0% in 2012 to £59 million. In this case, an increase in the volume of output more than offset a reduction in the average producer price.

There were gains in the values of output of the intensive livestock enterprises, with increases of 10.4% (to £117 million) and 14.8% (to £65 million) for the pig and egg sectors respectively. These were due to increases in both volumes and prices. The value of poultry meat output remained unchanged at £241 million, with no significant changes in either volume or price.

The output value for field crops decreased in 2012 by 16.3% to £69 million. This was predominantly as a result of poor weather leading to reduced yields which were only partially offset by an increase in producer prices. There were decreases in the values of wheat output of 31.1% (to £12 million) and of oats of 22.0% (to £1.7 million). The output value of barley increased by 1.7% (to £25 million) due to a rise in the average producer price. The value of output of potatoes decreased in 2012 by 35.3% to £17 million as a result of a decrease in harvestable production.

The estimated value of the 2012 Single Farm Payment was £244 million, representing a decrease of 8.5% compared with 2011. This reduction was caused by an appreciation of Sterling against the Euro.

Total Gross Input increased by 8.5% in 2012 to £1.4 billion. Feedstuff costs, which accounted for 52.1% of the Gross Input estimate, increased by 12.7% to £730 million in 2012. There was a 5.6% rise in the volume of feedstuff purchased and a 6.2 % rise in the average price per tonne.

In 2012, the total cost of fertiliser (excluding lime) rose by 3.5% to £83 million as a result of a 6.6% increase in the volume purchased (which was partially offset by a 2.5% reduction in the average price).

Total machinery expenses increased by 5.3% to £163 million in 2012. This increase was due to a 6.3% rise in machinery repair costs and a 5.0% rise in the cost of fuel and oils.

A detailed pdf document covering the period 2008–2012 and containing all the key figures used to derive TIFF in Northern Ireland can be downloaded from the DARD website

Estimates for the United Kingdom will not be released until April 2013 and a breakdown of TIFF for the UK will not be available until then.

Farm level incomes

Farm Business Income by type of farm for 2011/12 and forecasts for 2012/13 are presented in Table 1

. These income results are based on farm accounts collected for the Northern Ireland Farm Business Survey (FBS). This is a representative sample of farms larger than 0.5 Standard Labour Requirements. The income figures presented are for accounting years with an average ending date of mid-February.

Farm Business Income measured across all farm types is expected to decrease from £34,184 in 2011/12 to £23,237 in 2012/13, i.e. a decrease of £10,947 or 32% per farm. The figures also show that the average Farm Business Incomes for each of the individual farm sectors are also expected to fall (by varying amounts) between 2011/12 and 2012/13.

For Dairy farms, the expected decrease in income in the 2012/13 accounting year was a result of lower milk prices and yields, combined with higher input costs. The main contributor to the increase in input costs was higher feed usage and prices.

Cattle and Sheep (LFA) and Cattle and Sheep (Lowland) farm types benefited from an increase in cattle prices in 2012/13 but this was insufficient to offset the combined effect of lower sheep prices, lower Single Farm Payments and higher input costs.

Cereal type farms also benefited from higher output prices in 2012/13, although the rise was insufficient to offset the combined effect of lower crop yields, lower Single Farm Payments and higher input costs. Similarly, Pig farms experienced higher pig prices in 2012/13 but these were not enough to cover increases in pig feed costs and, therefore, a reduction in incomes occurred. For Mixed type farms, the results indicate little overall change in the value of output, but increased input costs led to a reduction in average incomes.

A detailed analysis of farm incomes by type and size of farm in 2011/12 will provided in the report ‘Farm Incomes in Northern Ireland 2011/12’ which will be published on the DARD website  in March 2013.

Notes to editors:

  1. For any enquiries please contact Seamus McErlean whose contact details are - email or telephone 028 90 524675.
  2. Provisional aggregate income figures for the UK will be issued in April 2013 on the DEFRA website.
  3. The Northern Ireland estimates were prepared using provisional figures and are subject to revision when more complete data become available.
  4. ‘Total Income from Farming’ measures the return to farmers, partners and directors, their spouses and other family workers for their labour, management input and own capital invested. It, therefore, represents the total income of all those with an entrepreneurial involvement in farming.
  5. The Single Farm Payment was introduced in 2005 and as a decoupled subsidy, is not included in the individual commodity output values as previously occurred with direct payments linked to production.
  6. Financial intermediaries (mainly banks) charge explicit commissions and fees for their services to customers, as well as implicit ones by paying and charging different rates of interest to borrowers and lenders. The revenue from the margin on lending and borrowing by financial intermediaries is described as financial intermediation services indirectly measured (FISIM). The inclusion of FISIM in 2011 in the account is in line with recommended EU national accounting conventions. It is a reallocation to gross output of part of the interest paid by farmers. While the inclusion of FISIM will increase intermediate consumption and decrease gross value added, it will decrease, by the same amount, the figure shown for interest paid and consequently this change in methodology has no impact on total income from farming.
  7. Income estimates by farm type are based on the Department’s Farm Business Survey, for which the account year ends on average in mid February, whereas the aggregate income estimates are compiled on a calendar year business.
  8. Farm Business Income is the return to all unpaid labour (farmer, spouses and others with an entrepreneurial interest in the farm business) and to their capital invested in the farm business which includes land and buildings.
  9. As Income estimates by farm type are based on data collected from a sample of the farm population, they are therefore subject to sampling error. To give an indication of this, the Farm Business Income results by Farm Type for 2011/12 and their associated 95% confidence intervals (as range bars) are shown in figure 1 For each farm type, figure 1 shows their estimated average Farm Business Income and the range of values that apply to it i.e. we are 95% confident that the true average Farm Business Income for the farm type falls within the range shown. It is important to note that the size of a confidence interval is influenced by a variety of factors such as number of farms sampled, level of confidence (e.g. 90% or 95%), and variability of incomes within sampled farms.
  10. For UK statistical purposes, farms are grouped into 10 ‘robust’ farm types which have particular relevance to UK conditions i.e. Cereals, General Cropping, Horticulture, Specialist Pigs, Specialist Poultry, Dairy, Cattle & Sheep (LFA), Cattle & Sheep (Lowland), Mixed and Other. The system for the classification of farms into these types is based on that set out in Commission Regulation (EC) 1242/2008 and explained in greater detail in the EU Farm Accountancy Data Network (FADN) Typology Handbook RI/CC 1500 rev.3.
  11. The EU and UK system for classification of farms was revised in 2011. Farms are now classified in terms of Standard Output (SO) compared to Standard Gross Margin (SGM) previously. Further details of the impact of this change are presented in the report ‘Farm Incomes in Northern Ireland 2010/11’ which is available on the DARD website .
  12. The ‘Statistical Review of Northern Ireland Agriculture, 2012’, due to be issued on 28 March 2013, will contain details of the output, input and income estimates for 2012, as well as information on livestock numbers, crop areas and yields, farm structure, employment and farm business performance.
  13. For media enquiries please contact DARD Press Office 028 9052 4619 or email: DARD Press Office Out of hours contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.