New figures released by Defra have shown farm incomes increasing by 13% during 2013, marking a substantial recovery for the agriculture sector following the weather-hampered returns of the previous year.
According to Defra, total income increased by £631 million to £5.46 billion – meaning income is just 0.7% lower than it was in 2011 after inflation has been taken into account.
A Defra spokesperson said that the falling numbers of farm workers mean that individuals in the sector are taking home a higher share of the total income figure.
This meant that individual incomes rose to an average of £28,426 – an increase of 15% compared to 2012 and a rise of 0.6% against 2011 figures.
Andrew Heskin, a partner in Moore Thompson’s Farming Sector team, said: “After the appalling winters recently, it is great news that our farmers have seen a general increase in their income.
“The signs are also promising that thanks to a mild winter and relatively dry spring, our farmers and growers will enjoy a good 2014, particularly if the weather stays fine.
“However farmers must not become complacent, because as we have seen before, one bad summer can wipe out a lot of good work.
“We would urge farmers to put in place the right financial measures to ensure they are protected against any future hardship.”
According to Defra, a rise in output helped fuel this rise in earnings.
Output from crops increased by 3.7% (£334 million) to £9.2 billion, with the main driver an increase in potato prices of 22%.
Cereals had a mixed performance, with wheat prices up 7%, but a 20% reduction in total area planted meant output actually fell by £75 million. Barley fared better with an increase of total output of £199 million, however this was offset with a drop of 6% in prices due to the increase in supply. Oilseed rape saw a £245 million decrease in total value.
In the livestock sector, poultry output increased by £250 million, the pig sector rose by £141 million, while the dairy industry increased income by £505 million in total output of £4.2 billion. The success in the dairy industry was achieved on the back of a rise in milk prices, which rose on average from 28.1p per litre in 2012 to 31.6p a litre in 2013.
However the livestock industry as a whole was reduced in total against its potential because the cold start to 2013 meant feed costs rose by £740 million.
Being at the heart of the Fens, Moore Thompson has always provided specialist accountancy advice to agricultural and horticultural businesses with an agricultural team that knows the farming business inside and out.