Cereals hit hard, but growth forecast for other sectors – Farm Business Income report

Incomes for cereal farms in England are set to fall by nearly a third in 2024/25 due to a combination of challenging weather conditions and lower output prices, according to the latest Farm Business Income forecast.

Average farm business income (FBI) is predicted to fall to £27,000, with wheat hit particularly hard.

Wet autumn drilling conditions and a cool, wet harvest impacted both yields and planted areas. 

For wheat, output is forecast to be around 25% lower than in 2023/24 – smaller crop areas and yields were compounded by lower prices due to plentiful global supplies. 

Output from OSR also fell despite prices remaining firm, due to reduced yield and area. 

Offset by other crops

For general cropping farms, however, lower output from cereals enterprises is expected to be partially offset by increases from other crops, such as sugar beet and potatoes.

Despite weather challenges, firm prices and slightly increased planted areas for both these crops are expected to result in higher output.

This, together with lower input costs, will result in a 13% rise in FBI to £108,000, the report predicts.

Several other sectors, however, are set for growth. 

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Dairy: Milk price to boost incomes

Average FBI on dairy farms is expected to more than double compared to 2023/24, to £176,000. This is primarily down to the recovery in the farmgate milk price.

At UK level, the average farmgate milk price rose by around 12% from March 2024 to January 2025, compared to the previous year, Defra statistics show.

However, there is wide variation, with some farmers receiving considerably more or less than the average.

Output from other cattle enterprises is also expected to be higher.

Grazing livestock farms

Meanwhile, for grazing livestock farms – both lowland and in Less Favoured Areas (LFAs) – higher output from sheep enterprises and reduced feed costs are among the drivers increasing FBI to £28,000. 

For lowland farms, higher incomes from agri-environment activities are another key factor, according to the report.

Additionally, lamb prices, both fat and store, are consistently up on the year, including some record highs.

However, these higher prices will be tempered to some extent by a smaller lamb crop in 2024, due to challenging weather conditions at lambing and a contraction of the breeding flock. 

Output from beef cattle enterprises is expected to rise by 1%. 

For LFA grazing livestock farms, FBI is forecast to be 18% higher, due to record lamb prices, and higher average prices for breeding ewes and hoggs. This offsets a 4% fall in output from cattle enterprises. 

Pig farms benefit from lower feed prices

Specialist pig farms are also predicted to see an increase in FBI, to £155,000, due to lower costs, particularly feed, which is expected to drop 5% (reflecting the lower value of feed wheat and barley).

Higher output from pig enterprises (4%) will reflect reasonably steady prices for finished pigs, stores and weaners. Both throughput and average carcase weights are also forecast to be slightly higher.

Mixed farms

Finally for mixed farms, FBI is expected to be just over a third higher than 2023/24 at £30,000.

No income forecasts have been made for specialist poultry or horticulture farms – as these would be subject to considerable uncertainty due to the structure of the sector and the relatively small sample of these farms in the survey. 

The 2024 delinked Basic Payment will fall by a quarter at the all farm level, while the all farm level income from agri-environment payments is expected to rise by over three quarters to £23,000 – though this varies widely between sectors.

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