Scottish Farm Business Survey: Profitability Under Pressure
The Scottish Farm Business Survey (SFBS) is an annual economic and environmental survey of over 400 farming businesses in Scotland. It delivers an in-depth focus on the position of Scottish farming and is a key data source for important national statistics that help support Scottish Government decision making and policy direction.
The survey allows farmers across the country to gain invaluable insights into their business whilst supporting Scottish agriculture. Participation in the survey is voluntary, with all data ammonised. The Scottish Government published the 2023 – 2024 results for the Scottish Farm Business Survey in April 2025.
One of the key findings of the survey being farm incomes experienced sharp declines in 2023-24, after record highs in 2022-23. The highs of the previous year were the highest income levels recorded since 2012-13, the earliest year for which comparable data exists. Average farm business income (FBI), a measure of farm profit after costs, fell by more than 50% (£37,500) for all farm types in 2023-24, its lowest level since 2019-20. These figures highlight the deepening financial pressures facing Scotland’s farmers. Several factors contributed to the downturn including adverse weather and while some input costs showed a modest decrease, costs did not fall at the same pace as output prices, putting additional pressure on profit margins. Lower profits mean that making investment becomes difficult for businesses.
Figure 1: Average farm income, with and without support payments, 2012-13 to 2023-24. 2023-24 prices. (Source: ScotGov)
Across the arable sector there were significant falls in net profit for both specialist cereals and general cropping farms of 63% and 54% respectively, after two years of recorded highs for both sectors. Falls in output were driven by cereal market price drops and significantly reduced yields. Scottish cereal yields in 2022 were extremely high, however challenging weather conditions impacted harvest in 2023. Market volatility and trade disruption on the back of the war in Ukraine contributed to inflated cereal prices in 2022-23, with cereal prices stabilising during 2023-24. Of note is that both farm types are sensitive to market prices.
The survey results highlighted that average dairy farms experienced a significant drop in income from its highs of the previous two crop years. Average dairy farm income was estimated at £116,300, a drop of 56%, remaining above the 10-year average. In comparison to lowland cattle and sheep farms dairies experienced an income drop of 87% down to just £2,600.
Average milk prices in the survey fell in 2023-24, from 45 to 39 pence per litre (ppl). This 6ppl drop largely contributed to the fall income alongside a slight decrease in milk yields. Similarly to all business types dairy farms are sensitive to changes in market prices. Despite continued profitability in the sector, there are still dairy farms that make a loss, up 2% from the previous year. Dairy, mixed and arable farms remain the highest three farm types for average income, however many farms within these categories didn’t generate a profit and were unprofitable in comparison to previous years. For 2023-24 31% (+4% from the previous year) of cereal farms were making a loss.
Cattle and sheep farms also saw an increase in the number of unprofitable farms. Support payments have an important role in farm income, with the survey showing around 73% of all farms made a profit in 2023-24, however without support this would decrease to 29% of all farms, highlighting the importance of support payments to allow farmers to remain in business. A key takeaway from the results was that no LFA sheep farms within the survey made a profit without supporting payments compared to 8% in the previous year.
The importance of support payments varies by farm type. Without support far fewer livestock farms make any profit, especially those in less favoured areas (LFA) than other farm types.
Figure 2: Breakdown of contributions to farm income by farm type, 2023-24. (Source: ScotGov)
There are many benefits for farmer participation in The Scottish Farm Business Survey, including help scrutinising business financial trends for profitability and net worth. It allows businesses to annually analyse their performance and compare up to three-years of trends in input and output costs, helping make better business decisions that will have a long-term impact on farming systems and business viability. Participation within the survey is completely voluntary and anonymous. Each year we ask for a digital copy of your invoices and receipts for your farming business and about two hours of your time to answer any questions. Each farm is allocated a staff member within the team who take your anonymity seriously.
What farms get back in return:
- The farm business report: this includes the farms net worth assessment of assets at the financial year end. You also receive a set of detailed management accounts which allows comparison to be made within your business for costs and productivity year on year for up to three years.
- A carbon audit in Agrecalc: You will receive a calculation report and a short mitigation report which is matched to your farm type. These reports have been verified by RPID as being adequate for Whole Farm Plan compliance purposes.
- Individual performance benchmark report: This allows you the opportunity to compare your farms performance figures compared to other similar business types, providing an anonymous external comparison. Providing reassurance and future business aims.
Right now, participation within the survey has never been so vital as the Scottish Government use this real farm business data to model the economic impact and policy change.
To find out more or take part email ScottishFarmBusinessSurvey@sac.co.uk.
Claire McIldowie, Agricultural Consultant, Claire.Mclldowie@sac.co.uk
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Posted by Unearthed News on 19/08/2025
