The average wheat farmer in the UK could make a loss of £70,000 on their 2027 crop as costs skyrocket due to the war in Iran which has caused shortages of supplies from the Gulf, according to new analysis from the Central Association for Agricultural Valuers.
With farmers making decisions about 2027 cropping now, the economic outlook means they could be making difficult decisions such as leaving fields fallow.
Jeremy Moody, the secretary of the CAAV described the crisis in the Gulf as the “fifth hammer blow to arable economics after the last three problematic harvests and the present one, moving into territory where the combination of strained cash flow and credit with current prospects opens up the prospects of a significant fall in cereals planting this autumn.”
His analysis shows that this loss would mean farms are now at the point where losses from crops now outweigh any additional income the average farmer would get from environmental schemes or farm diversification.
Moody adds:
“Many will be in a worse position than that; some will be better. The overall position points to discussion of what areas might not be planted this autumn rather than voluntarily spending money to incur that loss. It would be natural for these issues to be sharpest for those areas that made disproportionate use of set-aside above the minimum required levels.”
He said that as well as the issues with fertiliser and energy costs, farmers are battling myriad issues including extreme weather such as drought and flood, uncertainty over the government’s EU reset with fears some produce could end up banned, and the proposed Carbon Border Adjustment Mechanism, expected to add to the cost of imported fertilisers.
