Chapter 4: Accounts
Updated 21 October 2022
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Summary
Key results for 2021 in current terms (not adjusted for inflation)
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UK Total Income from Farming (TIFF) in 2021 was £5,998 million, an increase of £756 million (14%) from 2020. Although costs increased in 2021, these were outweighed by increases in both total livestock and total crop outputs, resulting in the third highest TIFF, in real terms, since 2000.
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In 2021, agriculture’s contribution to the UK economy (Gross Value Added at basic prices) was £11,222 million (0.5% of GDP). This constitutes an increase of £914 million (8.9%) compared to 2020.
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Total livestock output in 2021 was £16,285 million, an increase of £1,034 million (6.8%) from 2020. All major livestock outputs saw increases in value owing to high prices, with the exception of pigmeat which decreased in value by £38 million. The largest value increases were seen in milk, which increased by £344 million, and beef which increased by £310 million.
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In 2021, total crop output increased by £1,802 million (20%) from 2020, to £10,876 million. High prices and generally favourable growing conditions saw many crop outputs increase in value, the largest being wheat, which increased by £1,160 million. However, fruit and potatoes saw the largest decreases in value of £123 million and £119 million respectively.
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Intermediate consumption increased by £2,044 million (12%) from 2020, to £18,854 million in 2021. The majority of costs increased in 2021, particularly animal feed, which increased by £978 million, and fertilisers, which increased by £559 million. Seed costs fell by £87 million in 2021, returning to more normal levels following unusually high costs in 2020.
Introduction
This chapter shows production and income accounts for agriculture in the United Kingdom.
These accounts conform to internationally agreed accounting principles required by the United Kingdom’s Office for National Statistics.
Total Income from Farming is the total profit from all UK farming businesses on a calendar year basis. It measures the return to all entrepreneurs for their management, inputs, labour and capital invested. For differences between TIFF and Farm Business Income statistics presented in Chapter 3, see Table 3.3.
When comparing more recent years, values are presented at current prices (not adjusted for inflation). For long term trends in TIFF, values are presented in real terms. This means the figures have been adjusted to account for inflation, which allows more meaningful comparisons between years over the longer term.
TIFF in recent years
Figure 4.1: Total Income from Farming for the United Kingdom: 2016 to 2021 at current prices
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
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Figure 4.1 shows the value of TIFF from 2016 to 2021 at current prices. Since 2016, the average value of TIFF has been £5.1 billion, with the lowest value of £3.5 billion occurring in 2016, and the highest value of £6.0 billion occurring in 2021, an increase of £0.8 billion (14%) from 2020.
Below we provide a detailed comparison of the TIFF account from recent years in current terms. This approach is considered the most intuitive for comparisons over a short time period.
Outputs and subsidies
Overview
Figure 4.2: Summary of outputs and subsidies, 2016 to 2021
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
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Figure 4.2 shows the value of all outputs and subsidies from 2016 to 2021. Outputs and subsidies represent all financial incomes to farmers. Total livestock output is consistently the largest contributor to the value of all outputs and subsidies. In 2021, total livestock output was £16,285 million, an increase of £1,034 million (6.8%) on 2020. The second largest contribution to the value of outputs and subsidies in 2021 was total crop output at £10,876 million, an increase of £1,802 million (20%) on 2020. The remaining incomes to farmers in 2021 were all subsidies (£3,297 million), inseparable non-agricultural activities (£1,496 million) and other agricultural activities (£1,371 million).
Total livestock output
Figure 4.3: Main contributions to total livestock output (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
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| Item | 2020 | 2021 |
|---|---|---|
| Milk | 4,426 | 4,770 |
| Beef | 2,955 | 3,265 |
| Poultry | 2,829 | 2,901 |
| Mutton and lamb | 1,363 | 1,529 |
| Pigmeat | 1,481 | 1,442 |
| Livestock gross fixed capital formation | 1,312 | 1,392 |
| Eggs | 740 | 828 |
Notes:
- Cattle, sheep and pigs for meat have been renamed beef, mutton and lamb, and pigmeat respectively. The data used to calculate these values has not changed.
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The largest contribution to total livestock output in 2021 was milk with a value of £4,770 million. Milk also has the largest increase in value within total livestock output, with an increase of £344 million (7.8%) from 2020. This value increase was due to an increase in the price of milk, with the price of milk per litre being 2.5p higher than in 2020. In previous years, milk prices have followed a seasonal pattern of rises and falls throughout the year. However, in 2021 milk prices generally increased throughout the year, with December 2021 seeing the first price increase from November to December since 2016. The volume of milk produced was relatively unchanged in 2021, falling by 0.1% from 2020.
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In 2021, the second largest increase in value in total livestock output was beef with an increase of £310 million (10%) on 2020. The increase in the value of beef was due to an average price increase of 6.9% in 2021, with prices increasing steadily since 2019. The volume of beef produced remains relatively consistent with a small 3.3% increase from 2020.
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The largest decrease in value was pigmeat, with a decrease of £38 million (-2.6%) on 2020. 2021 was an unusual year for pigmeat production. There was an increase to the herd size, owing to an anticipated increase in demand which didn’t occur. During the summer, CO2 and butcher shortages resulted in a backlog of pigs on farms and delayed slaughtering, causing the average carcase weight to increase. Consequently, production of pigmeat increased in 2021 passing 1 million tonnes for the first time. However, this excess of pigmeat has resulted in the price falling by an average of 7.7%.
Total crop output
Figure 4.4: Main contributions to total crop output (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 |
|---|---|---|
| Wheat | 1,544 | 2,705 |
| Fresh vegetables | 1,670 | 1,668 |
| Plants and flowers | 1,367 | 1,580 |
| Barley | 1,062 | 1,162 |
| Fruit | 1,031 | 908 |
| Other crop products | 472 | 807 |
| Potatoes | 824 | 706 |
| Oilseed rape | 358 | 488 |
| Other industrial crops | 321 | 431 |
| Forage plants | 217 | 205 |
Notes:
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AHDB stopped producing potato yield data and prices in the last half of 2021. We have therefore looked at previous trends for the missing data and also sought views from stakeholders to estimate the value of the sector.
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‘Other industrial crops’ includes the value of protein crops and sugar beet.
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The largest contribution to total crop output in 2021 was wheat with a value of £2,705 million. Wheat also saw the largest increase in value within total crop output, with an increase of £1,160 million (75%) from 2020. The value of wheat in 2020 was unusually low, owing to the lowest wheat production since 1981. In comparison to 2019, a more typical year, the value of wheat is 11% higher in 2021. The main driver of the increase in wheat value was a strong price, which increased on average by 20% in 2021. The volume of wheat produced in 2021 increased by 46% compared to 2020, but this reflects the poor growing conditions in 2020. Compared to 2019, the volume of wheat produced was 14% lower in 2021.
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In 2021, the second largest increase in value within total crop output was the output of other crop products, with an increase of £335 million (71%) from 2020. This increase in value is due entirely to increases in the value of straw and inter-farm transfers of straw, which both increased in value by 78%. 2021 saw reasonable crop yields with higher volumes of straw produced than in 2020. Additionally, the average price of straw in 2021 increased by 27% compared with 2020.
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The largest decrease in value was the output of fruit, with a decrease of £123 million (-12%) on 2020. Production of fruit was severely impacted by cold weather in 2021. Planting, bud break and early development were all delayed by wet and cold weather during February and March, and overnight frosts in April damaged many flowering fruit crops. This led to a reduction in fruit production overall. Furthermore, the average price of fruit fell by 8.0% in 2021 which, coupled with the decrease in production, resulted in a fall in fruit value from 2020.
Other Outputs and Subsidies
Table 4.1: Breakdown of other incomes and subsidies (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 |
|---|---|---|
| Subsidies not linked to production | 3,297 | 3,249 |
| Inseparable non-agricultural activities | 1,496 | 1,496 |
| Other agricultural activities | 1,248 | 1,371 |
| Subsidies linked to production | 47 | 47 |
Notes:
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Subsidies not linked to production are all subsidies not directly linked to production, including the basic payment scheme and agri-environment schemes.
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Not all the data used to provisionally estimate the 2021 value for inseparable non-agricultural activities was available for this release. See section 6.2 Revisions for details.
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Inputs and costs
Overview
Figure 4.5: Summary of inputs and costs, 2016 to 2021
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
Download the full Accounts dataset.
Figure 4.5 shows the make-up of all inputs and costs from 2016 to 2021. Inputs and costs represent all money paid out by farmers during a calendar year. The make-up of all inputs and costs has been remarkably constant for the last 5 years. The largest cost facing farmers is intermediate consumption. In 2021 the value of intermediate consumption was £18,854 million, an increase of £2,044 million (12%) on 2020. The remaining costs in 2021 were total consumption of fixed capital (£4,615 million), compensation of employees (£2,814 million) and other costs[footnote 1] (£1,044 million).
Inputs: Intermediate consumption
Figure 4.6: Main contributions to intermediate consumption (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 |
|---|---|---|
| Animal feed: compounds | 3,473 | 4,254 |
| Other goods and services | 3,299 | 3,494 |
| Total maintenance | 1,845 | 1,903 |
| Animal feed: straights | 1,545 | 1,658 |
| Fertilisers | 1,058 | 1,617 |
| Agricultural services | 1,248 | 1,371 |
| Plant protection products | 896 | 959 |
| Motor and machinery fuels | 782 | 924 |
| Animal feed: other | 713 | 797 |
| Seeds | 863 | 776 |
| Electricity and fuels for heating | 452 | 480 |
| Veterinary expenses | 461 | 463 |
Notes:
- Animal feed: other represents feed produced and used on farm or purchased from other farms.
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The largest contribution to intermediate consumption was compound animal feed, with a value of £4,254 million. Compound animal feed also saw the largest increase in value in 2021, with an increase of £782 million (23%) from 2020. In 2021 the volume of compound animal feed used increased across most sectors, resulting in a 7.4% increase in volume. This increase in volume was coupled with a 14% increase in price, owing to higher prices of raw materials.
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In 2021 the second largest value increase in intermediate consumption was fertilisers, with an increase of £559 million (53%) from 2020. This rise is due to increases in both volumes used and prices of fertilisers. There was a 4.5% increase in the volume of fertilisers used in 2021, owing to a return to more fertiliser intensive winter sowing, following a switch to spring sowing in 2020. However, the main driver of this increase was higher prices, with an average increase in price of 46% across all fertilisers. This price increase was largely the result of higher energy prices raising the cost of manufacturing, coupled with higher demand.
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The largest decrease in value was seeds, with a decrease of £87 million (-10%) from 2020. The decrease in seeds seen in 2021 was the result of a return to more normal sowing practices, following an unusual 2020. In 2020, poor weather conditions during drilling of winter wheat saw many farmers switching to spring sowing of other crops, increasing seed usage. 2021 saw favourable conditions for both winter and spring sowing of crops, leading to a return to winter sowing and an 11% reduction in the volume of seeds used.
Other Inputs and Costs
Table 4.2: Breakdown of other inputs and costs (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 |
|---|---|---|
| Total consumption of fixed capital | 4,585 | 4,615 |
| Equipment consumption of fixed capital | 2,046 | 2,131 |
| Livestock consumption of fixed capital | 1,464 | 1,369 |
| Buildings consumption of fixed capital | 1,075 | 1,115 |
| Other taxes on production | -104 | -104 |
| Compensation of employees | 2,731 | 2,814 |
| Rent | 543 | 545 |
| Interest | 399 | 395 |
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Long Term Trends in TIFF
Values in this section are expressed in real terms at 2021 prices. The figures have been adjusted to account for inflation, which allows more meaningful comparisons between years over the longer term.
Figure 4.7: Long term trends in TIFF, 2000 to 2021
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
Download the full Accounts dataset.
Table 4.3: Headline figures in real terms 2016 to 2021 (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|---|
| Total crop output | 9,169 | 10,165 | 10,217 | 10,610 | 9,101 | 10,876 |
| Total livestock output | 14,057 | 15,653 | 15,685 | 15,413 | 15,295 | 16,285 |
| Total intermediate consumption | 16,748 | 17,361 | 18,286 | 18,091 | 16,858 | 18,854 |
| Total income from farming | 3,963 | 6,147 | 5,241 | 5,542 | 5,257 | 5,998 |
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In real terms, UK TIFF rose strongly between 2000 and 2008. Since then, TIFF has remained close to or within the £4 billion to £6 billion range, but with some big year-on-year fluctuations.
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TIFF fell sharply in 2015 driven by lower commodity prices and a stronger pound. In 2016 the exchange rate improved but a poor harvest and continued low commodity prices kept income low. In 2017, TIFF reached the highest point for 20 years as a result of a favourable combination of a weaker pound, strong commodity prices and high levels of production. In 2018, extreme weather conditions led to poor yields and pushed up the price of key inputs. These factors were not fully offset by strong commodity prices resulting in a 15% fall in TIFF that year.
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More recently, favourable weather in 2019 produced modest increases to both crop output and TIFF. In 2020, poor weather during winter sowing resulted in the lowest wheat value, in real terms, since 2006. This was offset by a strong year for livestock and relatively low year for costs, resulting in a modest 5.1% fall in TIFF from 2019.
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In 2021, TIFF was £5,998 million, an increase of £741 million (14%) in real terms from 2020. Despite high prices raising input costs, these were offset by high output prices resulting in the third highest TIFF value, in real terms, since 2000.
Balance Sheet for the United Kingdom Agricultural Industry
Table 4.4: Balance sheet (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|
| Total fixed assets | 262,777 | 275,284 | 286,416 | 290,187 |
| Total current assets | 15,435 | 15,334 | 16,306 | 16,676 |
| Total assets | 278,212 | 290,619 | 302,722 | 306,863 |
| Total long and medium term liabilities | 14,640 | 15,286 | 15,523 | 15,696 |
| Total short term liabilities | 6,235 | 6,003 | 5,466 | 5,543 |
| Total liabilities | 20,875 | 21,290 | 20,989 | 21,239 |
| Net worth | 257,337 | 269,329 | 281,733 | 285,624 |
Notes:
- Balance sheet as at December each year.
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Table 4.4 presents the agricultural balance sheet which values the assets and liabilities for agriculture at the end of each calendar year and estimates the net worth of the industry. Overall net worth is estimated to have been £285,624 million in 2021, an increase of £3,890 million (1.4%) on 2020. This was the result of an increase in total assets of 1.4% and an increase in total liabilities of 1.2%. Land is the largest fixed asset in the agricultural industry with a value of £243,756 million in 2021, an increase of 1.2% on 2020.
Table 4.5: Balance sheet in real terms (£ million)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|
| Total assets | 299,787 | 306,893 | 303,584 | 306,863 |
| Total liabilities | 22,494 | 22,482 | 21,048 | 21,239 |
| Net worth | 277,294 | 284,411 | 282,536 | 285,624 |
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In real terms at 2021 prices, net worth increased by 1.1% from 2020. Total assets increased by 1.1% and total liabilities increased by 0.9%.
Revisions
Figures for 2021 are provisional and subject to revision.
As a result of more data becoming available over time there have been minor revisions to earlier years in this release. These revisions are intended to enhance the precision of these estimates. Sometimes additional revisions are necessary to refine the methodology or correct historical errors.
TIFF is the relatively small difference between two large numbers and is therefore sensitive to small percentage changes in the values of outputs and intermediate consumption. A combination of a revision downwards in outputs and revision upwards in intermediate consumption leads to more sizeable revisions in percentage terms to Gross Value Added and TIFF.
Below are a list of key revisions that have been carried out since the last publication:
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Since the 2020 issue of AUK there has been a significant upward revision to the value of TIFF for 2020. For a full explanation of this revision, see section 4.1.1 of the Total Income from Farming in the United Kingdom 2020 final estimate statistics notice (published 16 December 2021).
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There have been minor revisions to the value of most outputs and inputs for 2020, owing to additional data becoming available since the 2020 second estimate was published in December 2021. Primarily this is data from Scotland, Wales and Northern Ireland.
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There have been minor revisions to liabilities presented in the balance sheet for 2019 and 2020, owing to fixing a historical error in their calculation.
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The value of eggs has been revised from 2018 onwards, owing to an error where unpacked eggs were not included in the total value.
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More accurate data was acquired for the calculation of total maintenance and capital consumption/formation, leading to some minor revisions to the back series.
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The methodology for calculating the value of potatoes has changed for 2021 in comparison to previous years. AHDB stopped producing potato yield data and prices in the last half of 2021. We have therefore looked at previous trends for the missing data and also sought views from stakeholders to estimate the value of the sector.
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The data used to provisionally estimate the 2021 value for inseparable non-agricultural activities was not available for England, Wales or Scotland for this release. We have therefore carried forward the 2020 value, but will revise this for the final estimate when more data will be available.
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To bring the terms used in the accounts chapter in line with wider Defra publications, cattle, sheep, and pigs primarily for meat have been renamed beef, mutton and lamb, and pigmeat respectively. This is to increase consistency and aid usability of our published statistics. The methodology by which these items are calculated remains unchanged.
Glossary of Key Terms
Gross Value Added (GVA) is computed as Gross output minus intermediate consumption and represents that contribution of a business, sector or industry to Gross Domestic Product (GDP).
Basic price is the market price plus directly paid subsidies that are linked to the production of specific products.
Current price is the value based on prices observed during the reference year (i.e. values not adjusted for inflation). The alternative to current price is ‘real terms’.
Real terms is where values from previous years have been adjusted for inflation. The alternative to real terms is ‘current price’.
Intermediate consumption is the goods and services used as inputs in the productive process, e.g. feed, energy and fertilisers.
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Other costs includes other taxes on production, rent and interest paid. ↩