Price levels for the main farm outputs in Scotland have been 'as volatile as ever' in the last year, according to the Farm Management Handbook.
The latest 2023-2024 edition highlights how gross margins are being heavily influenced by changes to both output price and variable costs.
Among the variable costs are fertiliser prices, which have reduced by around 50% between spring 2022 and spring 2023.
The handbook, which is produced by SAC Consulting, says this has helped improve business viability in some farming sectors.
However, across the sectors, gross margins have decreased for dairy and increased for beef, while for sheep it depends on the farming system.
Despite a reduction in fertiliser input costs, cereals gross margins have reduced following a reduction in ex-farm cereal prices.
Grain prices remain influenced by world grain stocks and grain exports from Ukraine.
The handbook is seen as a vital tool the Scottish farming industry, as it provides up-to-date source of information on budgets.
Alastair Beattie, from SAC Consulting – part of Scotland’s Rural College (SRUC), said farm output prices had been 'as volatile as ever' between 2022 and 2023.
Mr Beattie, who edited the Farm Management Handbook, added that higher interest rates were adding to the uncertainty at present.
“While we cannot avoid some upward and downward movement to market price levels, large swings to output price make it very difficult for farmers to plan for the future.
“Taking a little time out and using the handbook to consider how the relevant gross margins impact upon your business is time well spent.”
Edited by SAC Consulting on behalf of the Farm Advisory Service, the 44th edition of handbook is now available online.
