Farm Management Accounts

What the accounts include

The farm management accounts include:

• detail of cropping, stocking and tenant-type capital
• detail of outputs and inputs on a per farm basis
• detail of outputs and inputs on a per adjusted hectare or Grazing Livestock Unit basis as appropriate
• detail of output ratios, stocking rates, yields and prices
• gross margins for all major enterprises

These data are all presented in the form of your farm:

• this year
• last year
• type group average for last year

Farm type groups

Grouped into similar Farm Type Groups, these groups are designed to make benchmarking comparisons as relevant and meaningful as possible.

There is an obvious compromise between level of detail and the feedback document size.

Both the level and specification of the detail are continually reviewed and items introduced or deleted as farm practices change and input and output items become more or less important.

For benchmarking purposes and in order to compare like with like, all farms are assumed to be tenanted and a representative rent is imputed for owner-occupied farms.

Benchmarking income

The “profit” figures used for comparison are Net Farm Income (NFI) and Management and Investment Income (MII). Net Farm Income is derived by deducting variable and fixed costs (except farmer and spouse manual labour) from gross output.

Gross output includes the value of all sales less herd and/or flock depreciation. Management and Investment Income is NFI less the value of the farmer and spouse's manual labour.

Farm Business Income (FBI) is a further alternative measure of “profit” and is calculated as NFI plus:

• unpaid (family) labour
• imputed rents
• off-farm diversification profits and windfall gains

Then interest payments and buildings depreciation are taken off.

Rates of return

Rates of return are expressed as Return on Tenant's Capital. This capital is the working capital employed on the farm (principally the livestock, growing crops, machinery, and SPS entitlements). It excludes the 'Landlord's Capital' (principally the land, buildings, and milk quota).

All participating farms are costed to a year-end in the first quarter of the calendar year. (If the farm accounting year-end is not in this period, an appropriate VAT quarter-end is used).