Total income from farming fell in both 2014 and 2015, meaning that for only the second time since the 1990s it has fallen in two consecutive years.
Latest Total Income from Farming Estimates for Scotland 2013-2015 show income fell by nine per cent in 2014 compared to the previous year, and initial estimates for 2015 suggest a further drop of 15 per cent. Agriculture was worth £777 million to the Scottish economy in 2014, down from £837 million in 2013, with subsidies, potatoes and barley all seeing big falls. Although not all the data are yet in, TIFF for 2015 may have fallen back to about £667 million, which, once inflation is taken into account, is the second lowest in the past decade.
For 2015 it looks like the dairy sector suffered from the large drop in price, with the poultry-meat industry also falling back, now having lost half its value in two years. The main CAP subsidies were also down, though income from fruit increased considerably.
Overall, livestock saw a small decrease in value in both years. The largest sector, the beef industry, saw a small decline in 2014 followed by a partial recovery in 2015. Output from slaughter or sales of cattle amounted to an estimated £732 million in 2015. However, the opposite pattern was seen by sheep farmers, with a ten per cent increase in 2014 followed by an estimated four per cent fall in 2015 to £202 million. Likewise the pig industry saw an increase in 2014 followed by a fall in 2015 to £85 million. Poultry however saw large falls in both years, from £118 million in 2013 to £62 million in 2015.
The average milk price fell 23 per cent in 2015, resulting in a drop of 21 per cent in the overall value, to £364 million. Eggs increased an estimated 14 per cent during 2015 to £94 million, meaning it would have a greater value than the poultry-meat sector for the first time.
Cereals fell 13 per cent both years, with barley now worth an estimated £198 million and wheat £119 million. Potatoes also saw two drops, of 24 per cent and 12 per cent, now down at an estimated £167 million. Vegetables saw a steady 2015 after a 14 per cent fall in 2014, and now stand at £115 million. Fruit was one area that saw growth in 2015, with increases in volume and price leading to an estimated 39 per cent increase in value to £128 million.
Total costs were estimated to have fallen slightly in both years. Feed costs are estimated to have fallen as much as £70 million in 2014, and may fall further in 2015 (due to the poultry industry) to an estimated £594 million. The cost of fertiliser is estimated to have fallen nine per cent in 2014 which if, as estimated, is repeated in 2015 will give a value of £169 million. Fuel costs fell ten per cent in 2014 and look like they will fall further in 2015, to an estimated £115 million. However labour costs look like they will be up about five per cent in 2015, to £373 million.
Subsidies, including coupled support, amounted to £510 million in 2014 and £490 million in 2015. The reduction in 2015 was due to CAP Direct Payments (Basic Payment Scheme, Greening and Young Farmer Payments) being down 13 per cent on Single Farm Payment, due to both a less favourable exchange rate and a six per cent reduction in the original euro payment. Subsidies remain an important factor in the profitability of farming, accounting for 14 per cent of gross income and 74 per cent of TIFF in 2015.
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.
The full statistical publication can be accessed here...