Loam Farm – Jan ’26

Figures for our arable farm model, Loam Farm, have been updated.  Since our forecast in July the figures present a worsening picture.

The table below shows final figures for harvest 2023 and 2024, a forecast for the most recent harvest and a budget for the 2026 harvest year.  To recap, Loam Farm is a notional 600 hectare business that has been used since 1991 to track the fortunes of British combinable cropping farms.  It is based on real-life data.  It is partly owned and partly rented, has a working proprietor plus one full time member of staff and harvest casual.  It grows wheat, oats, beans and barley and has a SFI agreement (a ‘core’ agreement signed in 2024 with additional options added in 2025). 

Output from 2025 harvest has been reduced down since our earlier forecast; this is mainly due to lacklustre prices through the autumn selling period.  Yields had already been reduced due to the dry spring, however, feed wheat yields have been reduced further following harvest results.  The Margin from Production is now worse than 2024 and, with the BPS worth just £7,200, even with support payments Loam Farm is forecast to make a negative Business Surplus for the 2025 harvest.

For 2026, there has been a reversion to average yields; crops went in in good conditions although, obviously, we do not know what the weather will be like for the remainder of the season.  Prices have been revised down a little from our initial forecast which means Output from our original budget has reduced marginally.  Variable Costs creep up, likewise Rent & Finance as, although the interest rate is forecast to be lower, it is assumed average borrowings increase by £50,000 to reflect a small cash deficit in 2025 i.e. more working capital.

After two poor years the farm is cutting back slightly on investment which helps keep Overheads in check by reducing depreciation.  However, the farm is budgeting £25,000 on drainage works to address some of the issues highlighted in the past couple of seasons.  The Margin from Production at least ends up as a positive.  It can be seen that the BPS for 2026 is down at £1 per Ha.  This follows Defra’s announcement that the maximum payment will be £600 per business in 2026 and 2027.  The overall Business Surplus improves but is still below the long-term average for this model farm.

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