Soaring input costs offset a 13.9 rise in Scottish production

Published on Wednesday 1 February 2012 00:00

Output from Scottish farms rose 13.9 per cent, or £338 million last year to produce a total of £2,760 million worth of grain, potatoes, beef, lamb and all the other foods grown on farms in this country.

But, according to Scottish Government figures released yesterday, much of this increase was wiped off balance sheets with costs – mainly animal feedstuffs, fertilisers and fuel rising 13 per cent or £277m to £2,400m.

Commenting on the figures, Cabinet secretary Richard Lochhead pledged that the government would “redouble our efforts to reduce input costs to help the industry benefit from rising incomes”.

Jonnie Hall, director of policy at the National Farmers Union of Scotland, said the volatility in input prices made business planning more difficult to judge and tempered some of the optimism that was out there on farms.

Last year the total income from farming rose 4.1 per cent or £23m to an estimated £596m for Scotland’s 20,000 or so farmers. But when inflation was taken into account, income actually fell by 1 per cent.

Emphasising the reliance the industry still has on public subsidies, some £634m was paid out in support in 2011. Hall pointed out that support still outstripped income from farming and remained essential for the survival and well-being of farm businesses in Scotland.

Those sectors showing the biggest increase in output were topped with barley, with an £84m increase to £285m. Most of this was due to higher prices, but there was also an increase in tonnage produced.

Estimates of the total output of potatoes were put at £209m, but most of the 41 per cent increase relates to the 2010 crop sold in the early months of 2011.

There was a £61m increase in the value of beef sold last year to £568m. Most of this was achieved through better prices, but there was also an increase in meat production from cull cows.

Output from the sheep sector rose 9.6 per cent to £220m, almost double the 2005 figure, when the industry was in the doldrums.

Even although there was a slight reduction in milk production, the increased price saw the sector output rise to £289m.

Figures published yesterday by Farm Business Income, which uses data collated from actual farm accounts relative to the 2010 crop year, show dairy farmers averaging out at £73,632, well ahead of cereal farmers at £50,866.

Over the whole industry, the FBI figure averages out at £45,100, some 32 per cent or £10,900 above last year’s equivalent.

The smallest margins emerge in the specialist sheep farms in Less Favoured Areas with an average return of £29,235 – making them marginally worse off than their beef counterparts, whose average was £32,528.

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