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Statistical news release: Northern Ireland agricultural incomes in 2008

Thursday, 29 January 2009

The Department of Agriculture and Rural Development (DARD) has published the provisional figures for farm incomes in 2008.

Aggregate income

Provisional figures indicate that the ‘Total Income from Farming’ (TIFF) in Northern Ireland decreased by 1.3% (5.5% in real terms) from £236million in 2007 to £233million in 2008. A substantial rise of 13% in Gross Output (to £1.40 billion) was more than offset by a 19% increase in Gross Input (to £1.06billion), leaving overall TIFF for 2008 slightly reduced compared with 2007.

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

Livestock sectors contributed £1.12billion to agricultural gross output in 2008, 80% of the total. Gross output rose for all the main livestock sectors. Dairying remains the largest contributor to total gross output but recorded the lowest relative increase, at 4%, to reach a gross output of £444million. This figure reflects a slight decrease in the volume of milk sales off farm to 1.91 billion litres and an average raw milk price per litre in 2008 that was 5% higher than in 2007 as a result of strong global demand for milk products during the first half of 2008. The current milk price is considerably below the price at this time last year.

Total market returns in the beef sector increased by 19% in 2008. This was due primarily to increases in price of 29% and 32% for prime and cull cattle, respectively. There were changes in the volume of beef sector throughput, with the number of eligible cull cows and bulls marketed increasing by 8% while the number of prime cattle marketed decreased by 13%. The value of output of culled cows and bulls (excluding disposals through the Older Cattle Disposal Scheme which closed at the end of 2008) increased by 38% to £50 million as a result of the increased price and volume figures. The value of output of prime cattle also increased in 2008, by 12% to £279million, because of the rise in prime cattle prices and despite the fall in volume.

Total gross output increased by 25% in the sheep sector to £49million in 2008. This was due to a 20% rise in clean sheep prices and a 13% rise in cull sheep prices.

There were also gains in the value of outputs for the intensive livestock enterprises, with increases of 17% to £77million, 23% to £184million and 15% to £33 million for the pig, poultry and egg sectors, respectively. The gross output increases in the pigs and poultry sectors can be attributed to increases in the producer prices. In the egg sector there was an increase in throughput volume and in producer price.

The output value for field crops increased in 2008 by 8% to £67million. This was predominately as a result of increased production and sales. Annual average producer prices in 2008 for barley and oats increased by 4% and 5%, respectively, while prices for wheat reduced by 1%. There were increases in the value of barley output by 14% to £19million, in wheat by 39% to £14 million and in oats by 9% to £1.6million. In contrast, the value of output of potatoes fell by 5% in 2008 to £21million as a result of decreases in both production (6%) and in producer price (2%).

The total value of the Single Farm Payment estimated to have accrued in 2008 was £254million, representing a net increase of 11% compared with 2007. This reflects a more favourable exchange rate between Sterling and the Euro, which was only partly offset by higher modulation deductions (11% in 2008 compared with 9.5% in 2007).

Total input costs rose by 19% in 2008 to £1.06 billion. This was mainly as a result of a 20% rise in the cost of feedstuffs to £525 million (which represents 50% of total input costs to the industry). There was only a 1% rise in the volume of feedstuff purchased, but there was a 19% rise in the price per tonne.

There was a continuation of the trend of recent years towards lower total fertiliser usage on Northern Ireland farms, with a fall of 5% in the total volume purchased, but this was more than offset by an 81% increase in the price per tonne, resulting in the total cost of fertiliser input rising 72% to £83million in 2008. Although the total volume of fertiliser usage fell in 2008, the sale of straights actually increased, while sales of compound fertilisers dropped by 22%.

Total machinery expenses increased by 11% to £114million in 2008, reflecting the higher price of fuel and oils which farmers experienced for most of the year.

The total cost of borrowings to the agricultural industry remained at £58million in 2008. This was a combination of lower interest rates and an 11% increase in the level of borrowings.

Figures for the United Kingdom, also released today, indicate that UK Total Income from Farming increased by 42% in 2008 to £3.46billion, a rise of 36% in real terms. The decrease in Northern Ireland compared with the increase in the UK is due largely to a 66% or £1.27billion increase in the gross output of cereals in the UK as a whole, as a result of an increase in the volume of production and the fact that the average price for cereals was higher in 2008 compared with 2007. The cereals sector is relatively small in Northern Ireland accounting for only 2.5 per cent of output. Another factor contributing to the differing position for NI compared with the UK as a whole is that the GB milk price remained relatively high throughout 2008, probably because GB producers are much less dependent on export markets. In Northern Ireland, milk prices have weakened during the latter half of 2008 in line with global markets. In 2008, gross output in the UK dairy sector rose by 22% compared with 4% in Northern Ireland.

Farm level incomes

Farm Business Income by type of farm for 2007/08, together with forecasts for 2008/09 is presented in Table 1, which can be accessed via the DARD website  These income results are based on farm accounts collected for the Northern Ireland Farm Business Survey (FBS). This is a representative sample of all Northern Ireland farms larger than 0.5 Standard Labour Requirements. The income figures presented are for accounting years with an average ending date of mid February.

Average Farm Business Income measured across all farm types is expected to decrease from £30,127 in 2007/08 to £29,558 in 2008/09, i.e. a decrease of £569 or 2% per farm. At the individual farm type level, the results show that Farm Business Income is expected to increase between 2007/08 and 2008/09 on both LFA and Lowland Cattle and Sheep farms. The main reason for this increase in incomes is higher beef and lamb prices in the 2008/09 accounting year. The results also show that Farm Business Income is expected to fall sharply on Cereal, General Cropping, Dairy, Pig, and Mixed Farms for 2008/09 when compared with the previous year. This downturn in incomes for Cereal, General Cropping, and Mixed farms is mainly the result of lower cereal prices and higher fertiliser prices in the 2008/09 accounting year. For Dairy farms, the decrease in incomes can be mainly attributed to higher feed and fertiliser prices in 2008/09, and for Pig Farms the main reason is higher feed costs.

Farm Business Income was introduced last year as the headline measure of farm income following consultation by DARD in 2006-07. In light of views expressed during the consultation, it was decided that the previous headline measure, Net Farm Income, would continue to be published for an interim period, but as a secondary measure. Therefore, average Net Farm Income by farm type for 2007/08, along with forecasts for 2008/09 is presented in Table 2, which can be accessed via the DARD website

A detailed analysis of farm incomes by type and size of farm in 2007/08 will appear in the report ‘Farm Incomes in Nort

hern Ireland 2007/08’ which will be published on the DARD website in March 2009.  

Notes to Editors:

  1. Provisional aggregate income figures for the UK were also issued today by a News Release on the DEFRA website link to external website
  2. The Northern Ireland estimates, released to coincide with the publication of the UK figures, were prepared using provisional figures and are subject to revision when more complete data become available.
  3. 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.
  4. The Single Farm Payment was introduced in 2005 and is a subsidy which is part of aggregate output, but is not included in the individual commodities output as occurred with direct payments previously.
  5. 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.
  6. Following consultation in 2006-07, DARD decided that from January 2008 Farm Business Income will replace Net Farm Income as the headline indicator of farm incomes in statistical releases and publications. DARD’s consultation document on the new income measure and the response to the consultation can be found on the DARD website
  7. Farm Business Income was also introduced in England, Scotland and Wales and is used for UK farm income statistics. It is closely aligned to the main EU measure of farm incomes Family Farm Income and therefore allows easier comparison between Northern Ireland and other Member States.
  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. Farm Business Income differs from Net Farm Income in the following ways:
  9. It represents the return to all unpaid labour, not just the farmer and spouse. Therefore no notional deduction is made for any unpaid labour. It treats the tenure of farms as it is: tenants as tenants, owner occupiers as owner occupiers and those with both types of tenure as mixed.
  10. Net Farm Income (NFI) represents the return to the farmer and spouse for their manual and managerial labour and on the tenant-type capital in the farm business. It is intended as a consistent measure of the profitability of tenant-type farming. NFI is not a proxy either for farm business income or for farm household income.
  11. To represent the return to farmer and spouse alone, a notional deduction is made for any unpaid labour provided by non-principal partners and directors, their spouses and by others; this unpaid labour is valued at average local market rates for manual agricultural work.
  12. To confine the measure to the tenant type activities and assets of the business, an imputed rent is deducted for owner occupied land and buildings and for landlord-type improvements made by the tenant; no deduction is made for interest payments on any farming loans, overdrafts or mortgages and any interest earned on financial assets is also excluded.
  13. In previous years, Cash Income was also presented as a measure of farm income. Cash Income is revenue less total cash costs. The costs, therefore, exclude any imputed costs and depreciation charges. Cash income also excludes valuation changes.
  14. Average Cash Income measured across all farm types is forecast to increase from £40,563 in 2007/08 to £41,123 in 2008/09, which is an increase of £560 per farm.
  15. The ‘Statistical Review of Northern Ireland Agriculture, 2008’, due to be issued on 26 March 2009, will contain details of the output, input and income estimates for 2008, as well as information on livestock numbers, crop areas and yields, farm structure, employment and farm business performance.
  16. Crown Copyright 2009 A National Statistics publication
  17. National Statistics are produced to high professional standards set out in the National Statistics Code of Practice. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. You can also find information about National Statistics onlinelink to external website
  18. All media enquiries to DARD Press Office, telephone 028 9052 4619. Out of hours, contact the Duty Press Officer via pager number 076 9971 5440, and your call will be returned.