Pig farm incomes expected to fall, says Defra

The average income on specialist pig farms in England is expected to fall by around 20% over the next year, a 2011-12 forecast from Defra has revealed.

The farm business income in England report paints a broad outline of the next 12 months, based on information available for prices, animal population, marketing, crops and yields expected. March 2010 – February 2011.

The survey reveals the knock-on effect of higher cereal prices on pig farms, which continued to increase throughout 2011 and now account for around half the input costs. The falling income comes despite the increase in livestock, which was driven by firmer prices for finished pigs. Since 2009/10, the average income on specialist pig farms has more than halved, with a particularly steep decrease between 2009/10 and 2010/11.

The survey also revealed that specialist poultry farms were also expected to fall by around 8%, as the increase production costs offset the increase of value of both broiler and egg production.

However, Defra said that grazing and livestock farms in lowland and less favoured areas (LFA) should see an increase in average incomes in 2011/12 compared to 2010/11, despite the increase in costs and bought-in feed prices. This has largely been driven by firmer prices for fat and store cattle, as well as high values for finished lambs, cull ewes and replacement breeding sheep. The value for beef cattle per head is expected to be considerably higher by February 2012 than February 2011, which the report says will have a positive impact on incomes. Lowland grazing farms with a higher proportion of beef cattle are expected to do better than LFA grazing livestock farms. However, neither lowland nor grazing farms will reach the levels of income for 2009/10.

Defra acknowldeged that the forecast is subject to a margin of error and that the figures are an average of the wide range of incomes. It also recognised that farm income is derived as a small difference between output and input, so even small changes tend to result in large percentage changes in income.