But NFU Scotland said the figures showed ‘worrying trends’ for Scottish farm output
Total Income from Farming (TIFF) in Scotland increased by £96m to £749m in 2016.
Incomes were boosted by falling costs of feed and fertiliser and the weaker pound also had an impact, improving prices for grain, beef and lamb. Sterling also improved the value of EU support by £53m.
NFU Scotland director of policy Jonnie Hall said there was a 'clear indication of a contraction of Scottish agriculture'.
He warned the 'headline' figures of an increase could disguise significant variations between sectors, farm sizes and farm types.
Livestock was expected to show a small increase in value in 2016. The sheep industry saw a big rise of an estimated £24 million, or 13 per cent increase in 2016 due to the improved price and increased numbers.
Pig and poultry income also increased and beef remained 'reasonably steady'.
In the dairy sector, average milk prices fell nine per cent in 2016 following a fall of 23 per cent in 2015. This resulted in £126 million being wiped off the value of milk between 2014 and 2016.
Egg income fell back an estimated nine per cent during 2016 to £83 million.
Cereals fell eight per cent in 2016 with barley now worth an estimated £180 million and wheat £104 million. Potatoes saw a boost with improved ware prices and volume resulting in an estimated increase of £38 million.
Costs were estimated to have fallen slightly in 2016 to £515m.
Mr Hall said: “One thing that does stand out is the impact of the exchange rate shift following the EU referendum last summer.
"That has been an important factor in helping beef and lamb prices to rally.
"However, support payments are also included in the calculation and here the impact of the exchange rate change has been stark and a big factor in TIFF increasing."
Subsidies were at £533m in 2016.
In Northern Ireland, provisional figures indicated total income from farming (TIFF) had increased by 22 per cent to £244m.
Ulster Farmers' Union president, Barclay Bell, said the increase was mainly down to the exchange rate and increased production levels.
“However, to put the £244 million figure in context it is certainly up on 2015 but that was a particularly bad year for agriculture, with the total farm income at £199 million,” he said.
The figure is ‘well below’ the income of £336m in 2013 and £312m in 2014.
He added the total income was £32m below what was received in Common Agricultural Policy (CAP) payments for that year and equates to an average individual farm business income of £18,943.
“This means that farmers invested in their businesses and worked all year for less than they would have had for pocketing the CAP payment and doing nothing else,” he said.
“Despite this increase, the CAP Single Farm Payment remains absolutely essential for farm incomes while the supply chain is clearly still not delivering proper returns for farmers.
“That is why, with Brexit looming and given the long term nature of farming, we need assurances from the UK government of continued funding for agriculture after 2020 to provide us with more certainty and confidence going forward so that UK consumers can continue to source the food locally at the standards that they expect.”