Economic Report on Scottish Agriculture 2015

4.5 Crop enterprises (Table B12)

Overall average gross margins for crop enterprises ranged from £454 per hectare for winter barley enterprises to £815 per hectare for winter wheat, with the exception of potato enterprises (a combination of ware, seed and mixed potato enterprises) which stood out at £4,221 per hectare.

Where sample sizes were sufficient to allow comparison between high and low performing enterprises, gross margins of high performers in 2013-14 were around two to three times greater than that of low performers but, for spring oats, high performers achieved margins around four times that of the low performers.

For crop enterprises the differences in financial performance between high and low performing groups was due to the high performers achieving; higher sales prices per tonne which is expected to reflect generally higher quality, higher yields producing a greater volume of output per hectare, and better management of variable costs.

All crop enterprises have seen reductions in their overall average gross margin per hectare since 2012-13. This has been particularly marked for winter oats (down 32 per cent), spring oats and winter barley (both down 35 per cent). Winter oats enterprises experienced a 16 per cent reduction in production levels (due to a 14 per cent reduction in area and a two per cent fall in yield) combined with increased costs (up 17 per cent). Spring oats margins were also reduced by a fall in price per tonne (down 27 per cent) and increased costs (up 20 per cent), which lowered margins despite a four per cent increase in production levels. Winter barley margins decreased due to reduced yields (down by ten per cent) and price per tonne (down by 14 per cent). A small one per cent reduction in production costs could not offset these changes.

Taking account of the size of enterprises, potato (£97,000), mixed barley (£52,000) and spring barley (£29,000) achieved the highest average overall enterprise income. High performing spring, mixed and winter barley enterprises achieved a considerable advantage, with overall enterprise gross margins £39,000, £24,000 and £23,000 higher than those of low performing enterprises respectively. Winter oats (£9,000) achieved the lowest overall enterprise income.

The group average output:input ratios (the return achieved per £1 spent) was also greatest for potatoes at 3.4 and winter wheat at 2.5. Winter oilseed rape and winter barley generated the lowest ratios at 1.9 each. Of the high performing enterprises (excluding potatoes), spring oats achieved the greatest output: input ratio at 4.4.

More detailed results, including sample size information, are available from the agriculture statistics web page, Enterprise Performance Analysis^[9].

Crops: Enterprise Gross Margin Measures