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Dodd & Co have just released the results of our 2009 Livestock Farming Profits Report. Martin Hall, one of our farming specialists writes:
The average net profit of the farms in this survey rose this year by £6,882 to £18,665 Which probably equates to less than £4 an hour for the business owners. Higher beef and lamb prices have improved profits, along with higher subsidy income due to the weakening of the pound against the euro.
Income from livestock trading has increased by almost £7,000, as a result of higher cattle and sheep prices. This higher income however, has been offset by higher costs, with average feed and fuel costs increasing by 17% each. This means that farmers need to ensure their businesses are being run as efficiently as possible.
Subsidies accounted for 37% of farm income in 2008/09, without this support the average farm would have made a significant loss. It is interesting to note that, although there is a large difference between the profits of the best and worst performing farms, the difference in the loss before subsidies is significantly less. This shows that the vast majority of farms do not make any money from farming livestock. The difference in profitability between the most and least profitable farms is almost entirely due to the amount of subsidy they receive. Larger farms receive more subsidies but make very little more from farming more livestock. Only the top 10% of farms made a profit when subsidy income is excluded from the figures.
“I expect next year’s figures to continue to benefit from the weak pound which makes UK exports relatively cheap in Europe and should help maintain prices. It will also keep subsidy payments high as these are calculated in Euros. Very low interest rates should keep finance costs low and encourage investment, as can be seen by the high prices being paid for land recently,” commented Martin.
After several difficult years for farmers it is encouraging to see the figures improving.
If you would like a copy of the report please contact Janice Veitch on 01228 530913.
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