Income and farm developments in Germany

Facts & Figures

Agricultural incomes show significant fluctuations over the years. They also differ between the various legal forms and farm types. For the presentation of agricultural income we use the indicator “profit plus personnel expenses per work unit”. Hence, different proportions of not-salaried labor in agricultural holdings are taken into account (particularly between different legal forms).

Agricultural income

Notes: In addition to the (arithmetic) mean, the median and the 10 %, 25 %, 75 % and 90 % quantiles are calculated. To do so, income is first sorted in ascending order. The median divides the agricultural holdings into two equal groups, i.e. there are as many holdings with a higher income as with a lower income. The 25 % quantile (75 % quantile), on the other hand, is the value at which 25 % (75 %) of the holdings have a lower income and 75 % (25 %) of the holdings a higher income. The same applies to the 10 % and 90 % quantile. (© Thünen-Institute, Source: Calculations of the Thünen Institute of Farm Economics based on German FADN data)

The income of agricultural farms increased again in the 2016/17 economic year after decreasing in the two previous economic years. In the figure, the median is below the average in each year, which indicates that there are many farms with low incomes and few with (very) high incomes. The 10 % quantile, for example, is around 3.000 euro in the 2016/17 economic year, so 10 % of the farms earn less than 3.000 euro. The difference between the 75 % and 25 % quantiles is on average around 25.000 euro for the period under consideration. It should be noted that this difference has tended to increase, i.e. the income gap between successful and less successful farms is increasing. The reasons for the large income disparities include, inter alia, management, intensity of farming and natural conditions.

Agricultural income in different regions

Notes: Region Northwest: Schleswig-Holstein, Hamburg, Niedersachsen, Bremen and Nordrhein-Westfalen; Region Centre: Hessen, Rheinland-Pfalz and Saarland; Region South: Baden-Württemberg and Bayern; Region East: Mecklenburg-Vorpommern, Brandenburg, Berlin, Sachsen-Anhalt, Sachsen and Thüringen (© Thünen-Institute, Source: Calculations of the Thünen Institute of Farm Economics based on German FADN data)

The sometimes large differences in income across regions are due to a different regional distribution of farms by size and type as well as various location factors and production conditions (climate, soil quality, etc.).

Agricultural income according to legal status

Partnerships generally have the highest income level. However, the income of “legal persons” approaches this level in some economic years or even exceeds it. The lowest income is observed in family farms. The average income per work unit increased for all legal forms in 2016/17.

Agricultural income according to type of income

Specialist field crop farms show the highest income in recent years, while other grazing livestock farms show the lowest. In all farm types (except specialist field crops and other grazing livestock) income increased in 2016/17.

Agricultural income of arable farms

The income of arable farms is strongly influenced by farm size. Farms with less than 100 hectares of utilized agricultural area have a significantly lower level of income per work unit. In contrast, arable farms with more than 250 hectares have generated the highest income among the three size classes in recent years. It should be noted that for illustration of the “size effects” on income per work unit, results are presented for family farms and partnerships only.

Agricultural income of dairy farms

In dairy farms the income per work unit is significantly influenced by herd size. Farms with less than 50 dairy cows show the lowest incomes, while farms with more than 100 dairy cows have generally the highest. It should be noted that for illustration of the “size effects” on income per work unit, results are presented for family farms and partnerships only.

Revenues in plant and animal production

Revenues per hectare of utilized agricultural area vary due to changing producer prices as well as yields and production quantities, respectively. Revenues from livestock production are much higher than those from crop production on a per hectare basis.

Cost of materials in plant and animal production

The costs of seeds and seedlings, pesticides, fertilizers and energy remained relatively stable in recent years. Particularly, costs for animal feed have increased relatively strongly since the economic year 2009/10. However, since economic year 2012/13, these costs have fallen.

Labor

The work units per hectare differ significantly across farm types. Specialist granivore and dairy farms have about 3 work units per 100 hectares which is approximately twice as high as arable farms.