Strong commodity prices helped strengthen the incomes of in-hand farming enterprises, especially on arable systems, and agricultural rents continued to rise. The increased volatility of commodity prices, the upward trend of input prices, especially energy and fertiliser, and the forthcoming CAP reform will create some uncertainty in the future.

Across ‘All Estates’ the income derived from all agricultural sources increased in 2011 by 2% to £65 per acre (£161 per ha). This sector contributed 33.5% of gross income, which was slightly less than in 2010.

Agricultural rents

During 2011, Agricultural Holdings Act (AHA) tenancy rents for ‘All Estates’ strengthened by 2.4% to £70 per acre (£173 per ha). Similar to last year most of the uplift was concentrated in the livestock sector, where average dairy AHA rents increased 11.4% to £81 per acre (£200 per ha). Those on sheep and beef farms increased by 10% to £55 per ace (£136 per ha).

Farm Business Tenancy (FBT) rents for ’All Estates’ increased by 7% in 2011 to £89 per acre (£220 per ha). The FBT acreage as a proportion of the total rented area again increased in 2011 and now represents over 40% of the let agricultural area.

We expect to see continued growth, as some particularly high rents are being tendered for FBT ground in traditional livestock areas, while FBT rents for arable ground remain relatively static. AHA rent reviews, particularly in livestock areas, are seeing significant increases as there is an increasing acceptance that farmhouses and cottages are a ‘material consideration’ in rent reviews.

In 2011 average in-hand farm incomes (net income after deduction of property repairs, insurance, third party rents and interest on borrowed working capital) and contract farming incomes increased 19% to £110 per acre (£272 per ha) across all regions and farm types.

Taken from 
Estate Benchmarking Survey 2011