Profitability in English Agriculture: A Challenging Landscape

American farmer’s counterparts “across the pond” face challenges in 2026. Farm profitability in England has been tested by extreme weather, volatile commodity markets, subsidy reforms, and structural challenges in profitability that have left many producers and policymakers grappling with the future of farming economics in the U.K.

A Financial Times analysis reported that food production has become unprofitable for a significant portion of English farms. The article noted that nearly one-third of agricultural businesses were loss-making last year, citing rising input costs, unpredictable weather, and weak margins on commodity outputs as key drivers.

 This aligns with broader survey data indicating that only a small fraction of farms achieves healthy profit margins. Industry surveys like McCain Foods’ Farmdex Report have previously found that most farmers report minimal profits or losses over recent seasons, underscoring that low returns remain widespread.

The Farmdex Report showed how concerned many farmers are about the future.

Here are a few of the responses from the survey:

“The most challenging period I have seen in 35 years”

                                                 --Farmer, East of England

“Climate change is changing outcomes quicker than small farms can adapt.”

                                                  --Farmer, Northwest England

Two numbers demonstrate how widespread pessimism is in the U.K. about the future of farming. The Farmdex Report surveyed farmers to measure their level of optimism about what is ahead. Overwhelmingly, farmers were pessimistic about the future:

• 12% optimistic

• 74% pessimistic

Farming Profitability Review 2025

Baroness Minette Batters, a farmer and former president of the National Farmers Union, was appointed to lead the Farming Profitability Review in April 2025. Batters spent six months and eventually made 57 recommendations for the government and the farm industry to strengthen the resilience and viability of farm businesses.  

Farmers Weekly highlighted 12 of the recommendations:

1. Farm profitability is under severe pressure (rising costs from energy, wages, machinery, and labor).

2. Policy uncertainty is a major barrier (including proposed farm inheritance tax changes).

3. No single solution exists.

4. Farming underpins rural economy and food security.

5. A national plan for farming is essential.

6. Partnership working must replace fragmentation (report called for a Food and Farming Partnership Board to bring together government, industry and farmers, to set direction and remove barriers to growth).

7. Supply chain fairness needs strengthening (extending origin labelling and enforcing existing codes).

8. Better data and market monitoring are crucial

9. Skills, innovation, and productivity must improve

10. Investment incentives and tax need review

11. IHT (Inheritance Tax) is a critical concern

12. Continuous review will ensure progress and accountability

Batter wants government and the farm industry to pay close attention to initiatives every six months and conduct a full revenue every 18 months.

“Many farm businesses are marginal or loss-making yet will soon be hit with unaffordable inheritance tax bills, which in many cases will dwarf their annual profit, Country Land and Business Association (CLA) president Gavin Lane said about the review in an interview with Farmers Guide. 

“Now is the time for urgent action,” he added.

RELATED: Ed Blundy, equity partner at Brown & Co. in the U.K. explained to American Farmland Owner last November why many farmers were not expanding their operations.