Combinable crop businesses may need to rethink their operating models rather than wait for profitability to recover, according to farm business consultants Andersons at Groundswell 2026.
The consultancy’s latest ’Regen Farm’ model, unveiled at the event, suggests regenerative arable systems continue to face difficult trading conditions despite some improvement in market fundamentals.
The 600ha model farm, based on direct-drilled regenerative cropping with cover crops, herbal leys and third-party sheep grazing, recorded a loss from production following the 2024 harvest after poor weather reduced yields and grain prices weakened. While the 2025 season brought different challenges, with spring drought again limiting output, the business remained under financial pressure as overhead costs continued to rise.
Looking ahead to harvest 2026, Andersons expects improved yields and a modest recovery in grain prices to narrow production losses. Earlier fertiliser purchases have helped contain input costs, while the lower-input nature of regenerative systems has reduced exposure to higher fertiliser and fuel prices. However, the model still relies on Sustainable Farming Incentive (SFI) income to generate a positive business surplus, with Basic Payment Scheme support now almost phased out.
The outlook for harvest 2027 remains challenging. Rising fertiliser, fuel and general inflation are expected to increase production costs, while many farms could see SFI income fall as existing agreements expire and are replaced by lower-paying schemes. Andersons warns this reduction is likely to be most significant for larger businesses affected by the £100,000 agreement cap.
Richard King, partner at Andersons, said many arable businesses have now experienced several financially difficult harvests and that simply hoping conditions improve is no longer a viable strategy.
Instead, the consultancy believes greater collaboration between neighbouring farms, including machinery sharing and joint business arrangements, could help reduce costs and improve resilience.
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