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Exchange rate helps farming bounce back

Published: 31 Jan 2017 09:30

A National Statistics Publication for Scotland.

January 31, 2017

 

Total income from farming is estimated to have increased by £96 million in 2016, after two years of decline.

The Chief Statistician in the Scottish Government today published Total Income from Farming Estimates for Scotland 2014-2016, which contains near-final estimates of Total Income from Farming (TIFF) for 2015 and an initial estimate of 2016 TIFF. The figures show income fell by 16 per cent in 2015 compared to the previous year, but initial estimates for 2016 suggest an increase of 15 per cent.

Agriculture was worth £653 million to the Scottish economy in 2015, down from £775 million in 2014, with subsidies, milk and barley all seeing big falls.

Although not all the data are yet in, TIFF for 2016 appears to have bounced back to about £749 million, which, once inflation is taken into account, is the fourth highest since 2000. The weakening of the pound following the EU referendum led to improved prices for grain, beef and lamb, resulting in a boost to the value of outputs. Another important effect of the exchange rate was the increase in the value of EU support payments. The 17 per cent change in the exchange rate resulted in total payments increasing by £53 million.

Overall, livestock is estimated to have seen a small increase in value in 2016. The largest sector, the beef industry, again remained reasonably steady in 2016 after initial falls in price in the first half of the year. Output from slaughter or sales of cattle amounted to an estimated £696 million in 2016. However, a more positive pattern was seen by sheep farmers, with an estimated £24 million, or 13 per cent increase in 2016 due to the improved price and increased numbers; this followed on from a four per cent drop in 2015. Likewise both the pig industry and the poultry industry saw a drop in 2015 followed by an increase in 2016, pigs now being worth £89 million and poultry £84 million.

The average milk price fell 23 per cent in 2015, and nine per cent in 2016. This resulted in £126 million, or 28 per cent, being wiped off the value of milk between 2014 and 2016, down to £328 million. Eggs dropped back an estimated nine per cent during 2016 to £83 million.

Cereals fell 12 per cent in 2015 and a further eight per cent in 2016, with barley now worth an estimated £180 million and wheat £104 million. Potatoes saw a boost in 2016, with improved ware prices and volume resulting in an estimated increase of £38 million, or 23 per cent, to £209 million. The vegetable sector saw a small decrease in value in 2015, but looks more positive in 2016, and now stands at an estimated £123 million. Fruit, on the other hand, dropped back in 2016 from the very high value of 2015, and now stands at £115 million, though still on a strongly upward trend.

Total costs were estimated to have fallen slightly in both years. Feed costs fell £49 million in 2015 to £532 million, and may fall further in 2016 to an estimated £515 million. The cost of fertiliser was fairly steady in 2015, but is estimated to have fallen £33 million to £153 million in 2016. Fuel costs fell 17 per cent in 2015 but look like remaining steady in 2016 at £119 million. Labour costs look like increasing only slightly in 2016, to £381 million, following an eight per cent increase in 2015.

Subsidies, including coupled support, amounted to £480 million in 2015 and £533 million in 2016. The 2016 figure, which for accounting purposes is based on the payment year irrespective of when payments are actually made, is made up of £400 million in pillar 1 support, a further £91 million in pillar 2 payments, and £42 million in coupled support.

In the longer term, income from farming has been rising steadily since a dip in the late nineties. However, within that trend the figures have fluctuated from year to year.

The publication also includes a range of related data. This includes comparisons with elsewhere in the UK, which show Scotland and Wales consistently below other areas, with Northern Ireland at similar levels to the lower performing English regions. Scottish regional estimates show that, on a per hectare basis, the highest level of income from farming was in the North East. Productivity indicators, which measure the amount of output per input, irrespective of prices, show improved productivity each year since 2012.

Income from farming information is used to monitor the performance of the industry, but also as part of the calculation of Scottish GDP and in the UK National Accounts. The 2016 figures will be revised next year, once more complete data are available.

The figures released today were produced by independent statistical staff, free from any political interference, in accordance with professional standards set out in the Code of Practice for Official Statistics.

 

NOTES FOR NEWS EDITORS

1.            The full statistical publication can be accessed at:

www.gov.scot/stats/bulletins/01261

2.            Further information on Agriculture and Fisheries statistics within Scotland can be accessed at:

www.gov.scot/Topics/Statistics/Browse/Agriculture-Fisheries

 

3.            More information on the standards of official statistics in Scotland can be accessed at: www.gov.scot/Topics/Statistics/About