UK: UK crop production costs look set to rise in 2026

The Agricultural and Horticultural Development Board (AHDB) is forecasting a rise in crop production costs in the UK during 2026, Agriland reported on August 19.

For winter wheat, a 3% yearly climb in the full economic cost of production is expected for the 2026 crop at £1,659/ha, according to the board.

The cost of production for winter oilseed rape (OSR), winter barley, and spring barley is estimated at £1,509/ha, £1,495/ha and £1,268/ha respectively.

However, the key factor driving the anticipated climb in cost of production for harvest 2026 is the rise in fertiliser price.

The latest analysis carried out by AHDB confirmed that the costs of UK manufactured nitrate-based fertilisers increased by 14%, year-on-year, during the months of May and June 2025.

On the other hand, little change is currently expected in terms of overall crop protection or seed costs.

While variable costs look to be on the rise, current forecasts suggest there is more stability for overheads.

There are anticipated increases in rental value, administration costs, and labour.

However, a decline in costs for machinery and equipment costs – due to cheaper fuel – property and energy, and finance means total overheads for 2026 are forecast to increase slightly on 2025 levels.

The impact of this forecasted increased cost of production on net margins will depend greatly on the price of grains or oilseeds at the time of sale, as well as yield.

Meanwhile, AHDB has just released its full 2024/25 animal feed compounding production figures for England, Scotland and Wales (GB).

Overall, feed production across the industry was down by -1.4%.

However, feed demand across the UK’s cattle sector rose notably (+5%) in the 2024/25 season compared to the five-year average.

Both dairy and beef systems have seen increased feed use, albeit for slightly different reasons.

Market prices, supply pressures, weather conditions, and cost structures have all contributed to this upward shift.

Cattle feed production made up 31% of total feed production in 2024/25.

According to AHDB, it is important for the cereals and oilseeds sector to look at the key factors driving demand.

The usage of blends for dairy cows was up 8.2% against the five-year average at 864.1Kt for 2024/25. In comparison, compound feeds grew at 1.6% over the same period.

The milk-to-feed price ratio can be used to show how profitable it is to feed more concentrates by comparing milk value to feed cost, AHDB said.

From July 2024 to May 2025, the milk-to-feed price ratio rose from 1.33 to peak at 1.53 in November 2024 before steadying at 1.46 in May 2025.

Compared with the five-year average of around 1.22–1.26, this shows that in the 2024/25 season stronger margins consistently favoured higher concentrate use to drive milk output.

20 August, 2025