Section A Aggregate Output, Input and Income in 2004
Introduction
The 2004 estimates of agricultural output, input and income for the UK are described in 'Agriculture in the United Kingdom 2004', published by The Stationery Office in April 2005 on behalf of the UK Agriculture departments. The Scottish estimates given in this report correspond to those in the combined UK publication. The aggregate income figures reflect the estimated value of outputs from and inputs to Scottish agriculture over the calendar year. Subsidy payments are also incorporated into output and income estimates on an accruals basis, i.e. they are shown in the year in which they became due to be paid. Normally this is the year in which the farmer carries out the production to which the subsidy relates.
Commentary
Aggregate Results
The 2004 estimates are provisional. They were calculated during November 2004-January 2005 and were based on the latest available information at the time. While information on outputs is largely complete, data on input figures tend to become available later, sometimes with significant delay. The forecasts are, therefore, subject to revision in the next Annual Review.
The 2004 forecasts for Scottish agricultural output, input and income are shown in Table A1. Total Income From Farming ( TIFF) measures business profits plus income to workers with an entrepreneurial interest (farmers, partners, directors and their spouses, and most other family members who work on the farm).
TIFF is forecast to increase by around 2.5% (£12 million) over last year, before inflation is taken into account. In real terms, this represents a fall of around 0.4%.
Farm Crops
In the cereals sector, yields were better than expected given the weather conditions prevailing at the onset of harvest. However the associated reduction in quality and low market prices are reflected in a fall in overall output value of 2%. The value of the potato crop shows a 36% increase, due largely to strong prices, particularly during the first half of the year.
Livestock and Livestock Products
The value of finished livestock (£910 million) is forecast to have risen by 3% in 2004. The output value of finished cattle is up, reflecting an improvement in prices. Despite a marginal fall in the prices achieved for finished sheep, the output value has increased due to a rise in volume. Output values are forecast to have risen for both the pig and poultry sectors. The Dairy Premium Payment made in 2004 has contributed to a 5% (£16 million) increase in the output value of Livestock Products.
Direct Payments
The value of direct payments (those included in commodity output and as sundry receipts in the accounts) to Scottish agriculture in 2004 is estimated to be £532 million, an increase of around 3% (£13 million) from 2003. This rise is mainly due to increased payments made under the sheep and milk schemes.
Inputs
The gross input value is forecast to increase by 6% to £1,121 million in 2004. There are forecast increases in almost all categories, the most significant of which are feeding stuffs, fertilizers and lime, interest and miscellaneous expenses. Within miscellaneous expenses, fuel and oil has increased by 14% from 2003, reflecting the crude oil price increases in 2004. The amount of interest paid by farmers has also risen as a result of the interest rate increases that occurred in 2004.
Balance Sheet
Overall the total value of assets increased by £415 million to £14.6 billion. This is mainly due to an increase in the value of Land and Buildings. Total liabilities are estimated to increase by £70 million to £1,990 million. The net worth of the industry (calculated by subtracting total liabilities from total assets) has increased by 3% to £12.6 billion from 2003 but remains at just over 86% of the value of total assets.