Economic Report on Scottish Agriculture, 2016

4.5 Crop enterprises (Table B12)

Overall average gross margins for crop enterprises ranged from £418 per hectare for spring oats enterprises to £632 per hectare for winter wheat, with the exception of potato enterprises (a combination of ware, seed and mixed potato enterprises) which stood out at £3,574 per hectare.

Where sample sizes were sufficient to allow comparison between high and low performing enterprises, gross margins of high performers in 2014-15 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 were 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 apart from winter barley and winter oilseed rape have seen reductions in their overall average gross margin per hectare since 2013-14. This has been particularly marked for winter wheat (down 23 per cent). Winter barley and winter oilseed rape margins increased by 25 per cent and 21 per cent respectively. The decline in gross margins has been driven by reductions in prices achieved for produce across all enterprises, despite increased yields across all enterprises and reductions in spend on variable costs across most enterprises.

Taking account of the size of enterprises, potato (£76,000), mixed barley (£41,000) and spring barley (£25,000) achieved the highest average overall enterprise income. Overall enterprise income for high performing spring barley enterprises were around six times greater than those of low performers. High performing winter barley and winter wheat enterprises achieved overall income around four times greater than those of low performing enterprises.

The group average output:input ratios (the return achieved per £1 spent) was greatest for potatoes at 3.1 and winter oats at 3.0. Winter oilseed rape generated the lowest ratio at 2.1 each. Of the high performing enterprises (excluding potatoes), spring oats achieved the greatest output:input ratio at 3.7.

More detailed results, including sample size information, are available from the agriculture statistics web page, Enterprise Performance Analysis ^[8] .

Crops: Enterprise Gross Margin Measures