Loam Farm: Harvest 2026

The 2026 harvest is now complete across almost all of the British Isles – in record-early time in many cases, due to the prolonged hot, dry, weather.  This made for an easy harvest, but the same weather has meant yields have been reduced, especially in the South and East.  Whilst this is the ‘big picture’, there has been a lot of variability in yields once again – between regions, between neighbouring farms, and even within farms and fields.  This appears to have become a theme of recent harvests as the climate has thrown extremes of weather at the sector.  Some farms will have recorded above-average yields this year whilst others have had awful results.

This is to be remembered when looking at the results for Loam Farm.  It is only a single business and, although it aims to show the overall picture for combinable crop returns, it cannot show the diversity across the sector.  To recap, Loam Farm is a notional 600 hectare business that has been used since 1991 to track the fortunes of British arable farming.  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).  The figures for the model have recently been updated for the actual yields for the 2026 year.  This has reduced output, although this is partly offset by higher prices than used in earlier budgets.  The 2026 year is not quite final as the farm still has some grain to sell – the outcome is unlikely to change greatly however.

The figures show that it is the third year in a row that Loam Farm has failed to make a profit from its farming activity – 2023 was the last year when it made a positive Margin from Production.  The farm is reliant on its SFI scheme to make an overall Business Surplus.  The overall result is slightly better than last year, although poor in historic terms.

A budget has been produced for the 2027 harvest.  This has yields returning to normal (although it is perhaps increasingly difficult to say what ‘normal’ is).  This helps increase overall Output.  Variable costs are higher due to increased fertiliser prices.  Some of Loam Farm’s rented land reached the end of its term in 2026.  Given low profitability in the sector for a number of years, it has negotiated a (small) rent reduction which reduces the Rent & Finance charge.  There may have to be more of these sorts of adjustments in combinable crop rent levels and contract farming agreement charges if the sector is to be profitable.

The farms ‘core’ SFI agreement ends this winter.  It has been assumed that it will be able to replace this with an application in Window 2 for SFI26 which should open shortly.  Most of the same options are rolled-over, but the loss of the various ‘plans’ means the value of the new agreement will be slightly lower in 2027.  If the farm is not successful in its application (e.g. the money runs out too quickly), then this would leave a large hole in Loam Farm’s finances for 2027.

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