The average sales price of £114/t fell well below the average cost of production at £143/t. This means that on average, farmers are losing £29 on every tonne of wheat produced. There are wide variations of cost of production levels from over £250 per tonne down to less than £100.
NFU chief combinable crops adviser Guy Gagen said: “It’s vital for farm businesses that production is able to provide a profit and it’s deeply concerning that the vast majority of arable farmers were unable to make an economically sustainable return from winter wheat last year.
“Among our primary concerns is the inflation in input costs which is clearly demonstrated in these recent figures. The cost of agricultural chemicals and fertilisers remains high and even with the recent devaluation of sterling, grain prices have still not risen enough to cover high input costs.
“The NFU is always talking to Government and key stakeholders to ensure that farm businesses are able to be competitive, profitable and progressive in an increasingly competitive market. This is particularly true for the arable sector where our global competitors have been raising their game significantly in recent years.”
The Farm Business Survey, carried out by a group of universities and colleges part of Rural Business Research, discovered that more than 3,000 arable farms in England failed to make a profit, even after subsidies, environmental stewardship and non-farming income.