Farm incomes are forecast to be slashed significantly across several sectors during the year to February, Defra figures show.
Forecast of Farm Business Incomes for 2015/16, released on January 28, shows declines of nearly 50 per cent in some sectors due to lower prices across the majority of UK farm commodities.
Pig farm incomes are forecast to be back an average 46 per cent to £26,500 while dairy farm incomes are expected to fall 45 per cent to £46,500.
Referring to dairy incomes, the report stated: “Reduced output [is] driven largely by the fall in milk price, but also for cull cows and replacement heifers.
“Increased milk production [is] expected to offset this slightly together with reduced input costs, particularly feed. EU dairy fund payment is included in income."
Cereals farm incomes are expected to be down 24 per cent to £34,000 and general cropping down 17 per cent to £43,000.
“Cereal output reduced primarily due to weaker prices driven by plentiful global supplies, declining demand and a stronger pound. Reduced areas were offset by higher yields,” the report added.
“Input costs are expected to be lower, particularly for fuel and fertilisers.”
The figures cover the 2015 harvest and include the 2015 rate of Basic Payment, which is expected to be 8-9 per cent lower than the 2014 payment for all farm types except Less Favoured Area (LFA) grazing livestock.
Higher moorland and Several Disadvantages Area payments are expected to increase output on these farms.
LFA grazing livestock is forecast to be up 47 per cent to £21,500 per farm and lowland grazing livestock up 8 per cent to £20,000 with input costs, particularly feed and fuel, expected to fall slightly more than output.
“Sheep output is expected to be lower as plentiful supplies led to lower prices. Cattle output is expected to rise slightly with tight supplies leading to firmer prices for fat and store cattle,” claimed the report.
Poultry incomes are expected to be up 14 per cent while mixed farms are up an average 4 per cent.
For non-corporate businesses, Farm Business Income represents return to all unpaid labour on a farm. It is similar to a measure of net profit.