The incomes of Welsh farmers have been forecast down according to a report published today with hikes in input costs, falling lamb prices and the reduction in the value of the Single Farm Payment being held responsible.
According to information published in the Net Farm Income Forecast for 2012/13:
Net Farm Income across ‘All Farm Types’ is forecast to drop by 41% year on year (2011/12-2012/13) to £17,600.
And Less Favoured Areas (LFA) farms are to be hit even harder with Net Farm Income for Severely Disadvantaged Areas (SDA) cattle and sheep down 60% year on year (2011/12-2012/13) to £10,000.
"These unfortunately come as no surprise to Welsh farmers who have struggled over the past 12 months as a result of the exceptional weather, spiralling input costs, price volatility and unfavourable exchange rate that resulted in an eight per cent drop in the Single Farm Payment" said NFU Cymru President Ed Bailey.
"All issues which were identified only last week in our own Winter Survey. The figures also corroborate estimated income figures that NFU Cymru presented to the Deputy Minister earlier this year."
"The problems with production costs outstripping farmgate prices for dairy at times over the past year are well documented and the crash in lamb prices this autumn and winter has placed severe pressure on livestock businesses in Wales."
"Arable farmers have fared little better with yield and quality hit by the weather and with the wet weather impacting on autumn cultivations and planting the impacts of last year’s weather will have knock-on effects for this year’s harvest as well."
"The last 12 months have shown the importance of the Single Farm Payment to underpin farming businesses and food production in Wales."
"Given the exceptional circumstances that we now find ourselves in and with Welsh Government figures predicting that hill and upland farms average net income is forecast to fall by up to a crippling 60% NFU Cymru believes that these figures justify the need for dedicated LFA support from the Wales RDP."
As 86% of Welsh farmers have reported a decrease in farm business income, farm input costs have risen in the last six months according to reports. The costs of producing food - categorised under feed, fuel and fertiliser - has 'rocketed' and is impacting heavily on farm businesses across all sectors.
97% of survey respondents reported a rise in feed costs over the last 12 months, 96% of farmers reported rising costs of energy and fuel and 83% reported a rise in fertiliser costs over the same period.
And in a separate report, the overall inflation of 4.39% reflects a period of some instability, with significant increases in inflation seen for feed and animal health products (16.9%), fuel (11.2%) and seed (10.2%). The only area to have experienced deflation is machinery (-6.4%).
The figures show an increase from AgInflation of 3.38% recorded for the year from August 2011 to August 2012.
"Unfortunately the results of the survey will come as no surprise to the majority of Welsh farmers, particularly those farming in the uplands" said John Owen, NFU Cymru LFA board chairman.
"The combined effects of increasing production costs on farms, continued low lamb prices and the repercussions of the extremely poor weather conditions that farmers have had to cope with over the last 12 months have left many upland farmers in Wales struggling to survive."
