Modelling input and output price changes to Scottish Agriculture, using the ScotFarm Model

In 2022, the annual average price in the UK increased by up to 20.0% for agricultural outputs and 27.7% for agricultural inputs compared with the annual average prices in 2021 (DEFRA, 2023). These recent and potentially future price changes are likely to have impacts on Scottish agricultural system. Understandingthe impacts of these changes on farm economy and production is important to minimise economic and production consequences on Scottish agricultural system. This analysis explored the impact of current price inflation on four most common farming systems in Scotland – Dairy, Beef, Sheep and Arable - using a farm level optimising model, ScotFarm. Two alternative price scenarios were examined; a price inflation scenario that used current price inflation (scenario PI2025) and a hypothetical scenario that ignores the current price inflation and maintains historical trend of price change before 2020 price increase (scenario FAPRI2025). The model outputs of farm net profit and production levels in 2025 were compared with that in 2020 in this analysis