Average farm income at record high

Estimates for the average farm provide an overview of the financial health of the industry. The average farm is the weighted average across all farm types included in the farm business survey.

Average farm income is around £69,100 in 2022-23. This is the highest estimate since 2012-13, the earliest year for which comparable data exists.

Figure 1: Average farm income, with and without support payments, 2012‑13 to 2022-23.2022-23 prices.

Average income increased by around £14,600 from the previous year. Rising output more than offset increased input costs and decreases in both support payments and income from non-agricultural activity.

Table 1: Farm business income (FBI) and contributions to FBI, average for all farms, 2021-22 and 2022-23. 2022-23 prices.

Income from agricultural activity is the difference between agricultural inputs and agricultural outputs (1a minus 3b in table 1) and excludes support payments, contracting and diversified income.

For the first time since 2012-13, when comparable records began, agricultural activity is profitable for the average farm. In 2022-23, increases in agricultural output exceeded increases in agricultural costs. This was mostly driven by increases in milk, cereals, and livestock outputs. Agricultural activity for the average livestock farm continues to be loss-making.

Trade disruption and tightening supplies following Russia’s invasion of Ukraine in 2022, led to volatility and higher input and output prices across the markets. Agricultural inputs, such as fuels, feed, and fertiliser, and agricultural outputs were impacted by these fluctuations. In 2022, markets were also recovering from the impact of the coronavirus (COVID-19) pandemic.

The average farm received around £46,300 in support payments and grants – a 4% decrease from the previous year. This decrease in real terms is mostly the result of inflation increasing more than support payment rates between 2021 and 2022.

The average business made a record £22,800 in profit without support payments. This is the second year in the time series that average income is profitable without support payments. This is mostly driven by higher incomes in dairy and arable farms. The average livestock farm continues to make a loss without support.

The average farm made around £5,000 from diversified activities. For example, by renting out buildings or generating electricity.