Poor cereal and potato prices in 2014 have resulted in Scotland’s farming not repeating the high levels of income seen in 2013.
The figures show income increased by 29 per cent in 2013 compared to the previous year, but initial estimates for 2014 suggest a drop of 18 per cent.
Agriculture was worth £823 million to the Scottish economy in 2013, up from £630 million in 2012, potatoes, milk and vegetables all doing very well. Although not all the data are yet in, income for 2014 may have fallen back to about £688 million, which, once inflation is taken into account, is about average for the past decade.
For 2014 it looks like the potato and cereal sectors both suffered from the large drop in price, though the reduction for cereals was offset by a very productive harvest. Income from potatoes fell £105 million to £170 million, though this is relative to an exceptionally strong year in 2013. Cereals fell by £46 million to £381 million.
Overall, livestock saw a small increase in value, though there was a small decline in the largest sector, the beef industry, with falling prices and slaughter numbers. Output from slaughter or sales of cattle amounted to an estimated £710 million. However, it was a better year for sheep farmers, with increased prices and numbers resulting in a 15 per cent increase in output to £203 million. The pig industry also regained some of the value lost in recent years, with an estimated output of £94 million, up £15 million on 2013. Poultry was down £18 million to £100 million.
Total costs were estimated to have fallen slightly in 2014. Feed costs are estimated to have fallen as much as £40 million, to £644 million. The cost of fertiliser is estimated to have fallen £31 million to £167 million, and fuel by £14 million, to £127 million. However labour was up £15 million to £361 million.
Subsidies amounted to £560 million in 2013 and £491 million in 2014. The large reduction in 2014 was due to Single Farm Payments being affected by both a less favourable exchange rate and an eight per cent reduction in the original euro payment. Subsidies remain an important factor in the profitability of farming, accounting for 11 per cent of gross income.
In the longer term, income from farming has been rising steadily since a dip in the late nineties. However, within that trend the figures fluctuate from year to year. 2013 was the highest in nearly 20 years.
The Total Income from Farming Estimates can be found here...