Weather and pandemic cause farm profits to drop 21%

Defra says 2020 has been one of the most challenging for farming in recent years
Defra says 2020 has been one of the most challenging for farming in recent years

Extreme weather and the Covid-19 pandemic have been blamed for a sharp drop in this year's total agricultural income, Defra has said in a new report.

Total Income from Farming (TIFF) - a measure of the performance of the UK agricultural industry - is expected to be £4.2bn, a fall of £1.1bn (-21%).

Adverse weather conditions and the ongoing coronavirus crisis were 'key influencing factors' for the decline, the forecast explained.

The exceptionally wet autumn of 2019, flooding in February, a dry spring, followed by a hot summer and heavy rain in August impacted crop harvests and yields in 2020.

Meanwhile, Covid-19 disrupted supply during lockdown, Defra's report said, reducing the demand for some commodities due to the closure of hospitality. Labour availability was also affected.

"The variable and extreme weather conditions affected crop production and lowered yields whilst the global pandemic led to supply chain disruption and impacted on farm-gate prices," Defra said in its report.

The value of crop output is estimated to have decreased by 13% to £8.7bn, largely driven by lower production affected by the weather, reduced crop areas and yields, plus pests and disease.

The value of livestock output is estimated to rise slightly (+2%) to £15 billion, overall farm gate prices were higher with little change in production, Defra said.

Both the dairy industry and meat producers faced supply disruption due to the lockdown together with the closure of the food service and hospitality sectors.

The value of intermediate consumption is estimated to decline slightly by 1%, to £16.8 billion.

Lower global oil prices reduced the costs of fertiliser and fuels however some costs, such as seeds and protection products were higher due to increased use related to the weather conditions

The report added that this year, agriculture is expected to contribute £9.4bn to the national economy (Gross Value Added), a decrease of £1 billion (-10%).