Few harvests in living memory have tested British agriculture quite like that of 2025. Across the country, results have shown almost as much variation as crop species themselves, with some farms reaping better-than-expected yields while others have endured their lowest in decades.
This is a particularly stark reminder of just how volatile the agricultural industry has become. The Agriculture and Horticulture Development Board (AHDB) itself confirmed “extreme variability” across the 2025 harvest, with yields ranging from 26% below the five-year average to 21% above it - depending on individual field and soil conditions.
The better-performing farms this season have had a clear tendency to sit on moisture-retentive Grade 1 and 2 soils, such as those cultivating the recent sugar beet yields that have climbed to over 100 tonnes per hectare. This is in stark contrast to the five-year average of just 75 t/ha. On the other side of the fence, however, Grade 3 clays and a great many spring crops fared disastrously. Some seasoned farmers have gone as far as to describe them as the lowest yields they’ve ever seen.
It’s a picture that encapsulates the agricultural economy in miniature: resilience and vulnerability existing side by side, often within a few miles of each other.
The data emerging this autumn clearly confirms what many farmers already know instinctively from their own experience - 2025 has been an especially difficult year for British agriculture. Yields are notably more sparse and farms are likely feeling the pinch of reduced cashflow as a direct result.
Early estimates from the Department for Environment, Food and Rural Affairs (DEFRA) and the AHDB suggest that this year’s harvest continues the downward trend seen in 2024. For one, wheat output is expected to be significantly lower than average, with initial projections suggesting volumes may sit around 20% below typical levels. Last year’s DEFRA figures already demonstrated national wheat production falling to 11.1 million tonnes (a decline of 20% compared with 2023) as both planted area and yields dropped.
While full 2025 production data will not be available until later this autumn, reports from the AHDB and other industry analysts point to a similarly uneven picture across cereal crops. Overall output is expected to remain subdued, with many regions reporting limited recovery from the 12% year-on-year fall recorded in 2024.
With this in mind, the financial picture in 2025 is no less challenging. According to DEFRA figures, average cereal income for the UK’s farms has plummeted by around 32% - dropping from £39,400 to £27,000. This follows several successive years of tightening margins and declining profitability, with nearly three in ten farms reporting negative income in the most recent full accounting year.
Even those who achieved comparatively strong yields this season are feeling the strain. With decidedly fewer tonnes to market over winter and prices remaining visibly subdued, margins are being squeezed at precisely the time input costs are rising sharply. For most businesses in the agricultural sector, the challenge is no longer one of surviving a single difficult year in isolation, but maintaining financial stability amid consistent and continued volatility.
For many farming businesses, this winter will feel tighter than usual. Lower yields of course mean smaller grain piles and, in many cases, far less to market. Wheat prices remain stubbornly depressed, which leaves limited scope to rebuild margins in the coming months.
Cashflow pressures are likely to reach their peak in spring 2026, as depleted reserves meet ever-rising input costs. Somewhat ironically, superlative drilling conditions this autumn have encouraged much larger wheat areas for next year’s harvest, which will increase demand for fertiliser, sprays and fuel, with this demand hitting just as liquidity weakens.
It is predicted that the next 18 months will test even the most experienced farm businesses. Much like the weather that impacts them, a farmer’s finances can’t be directly controlled. However, they can be proactively managed, and now is the time for farmers to look forward with sharp clarity and decisive discipline.
Building a detailed cashflow forecast is essential to understand the months ahead and to plan for expected pressure points. It’s worth engaging early with lenders to discuss repayment schedules or temporary adjustments, as these options can provide valuable headroom before difficulties begin to set in. Many businesses will also benefit from pausing or scaling down major capital projects until conditions start to stabilise - preserving much-needed working capital to cover day-to-day operations.
Now is also a prudent time to review the structure and diversification opportunities available to the nation’s agricultural sector. Some farms may consider new income streams, from contract farming arrangements to renewable energy schemes or limited agritourism projects. Alongside this, strategic tax planning can smooth profits between stronger and weaker years, mitigating the financial shock that follows a difficult season.
This season has shown that unpredictability is no longer an exception in farming; if trends persist, it would seem that it’s the new normal. Yet, while volatility cannot be eliminated, it can be managed. The businesses that thrive in the coming seasons will be those that have the foresight to plan proactively, forecast regularly and make financial decisions based on data, rather than hope.
At Duncan & Toplis, our agricultural team works with farmers to navigate these developing challenges. From forecasting and business planning to tax advice and restructuring, we help farmers stay one step ahead, ensuring that a shocking harvest doesn’t become a financial shock as well.
Now is the time to act, plan and protect. To find out how we can help you turn the difficulties of 2025 into the foundations of a stronger, more resilient 2026, contact us today.
