Grazing livestock and poultry enterprises fared best in the March 2020 to February 2021 period, according to the initial Defra Farm Business Income estimates for England, based on survey data. Cereals, dairy and pigs were all down year-on-year.

Defra says the challenging weather conditions over the twelve months – an extremely wet autumn and winter 2019 followed by a spring drought in 2020, in addition to the effects of Covid-19 restrictions for much of the period – are reflected in the 2020/21 income estimates.

Average farm business incomes for cereal and general cropping farms are expected to fall in line with the lower planted areas and yields from harvest 2020, despite a rise in prices for many crops compared with 2019/20.

But average livestock farm incomes are forecast to rise, with the exception of dairy and specialist pig farms. The increased output, driven by firm prices and strong domestic demand in the period, is expected to more than offset higher input costs, particularly for feed.

Defra calculates that the average 2020 Basic Payment is 2% higher than in the previous year. However, this is the last full payment at CAP rates – from the 2021 scheme year, BPS will start to be phased out, with larger claims reducing fastest.

By enterprise, the average cereal farm income is forecast to fall by 43% year-on year to £36,000. Crop output is expected to fall by 17%, partially offset by a 2% fall in input costs. General cropping farms see a 35% decrease to £55,000, with output down by 7% and input costs by 1%.

Dairy farms are expected to see a 10% drop in incomes to £76,000. Milk output increased 1% through stable pricing and a slight increase in volumes over the period, with input prices also up by 1%, with feed affected by higher cereal values.

Lowland grazing livestock farms saw a 78% rise to £17,000 – output is forecast up 18% through higher cattle and lamb prices, while input costs are 2% higher. Less Favoured Area (LFA) units see a 42% increase to £32,000, with later lamb and breeding stock sales catching the rising prices.

While cautioning a small sample size, Defra estimates specialist pig farm incomes at just £5,000 for 2020/21, an 87% fall. Output fell by 1% while costs rose by 5%, largely through feed. Specialist poultry enterprises are also subject to small sample uncertainty, but Defra estimates average incomes to have risen by 48% to £130,000. Higher egg prices in the pandemic drove output up 7%, with poultrymeat also rising, while input costs were 2% higher.

Lastly, mixed farm incomes are expected to increase by 8% to £31,000, with overall output and input costs little changed from the previous year.

The full Farm Business Income survey results for 2020/21 will be published in November 2021. The full forecast tables are available here.