Rising Costs on the Farm: How to Stay Profitable When Margins Are Tight

Farming has always been about resilience; adapting to challenges, managing uncertainty, and making the best of what each season brings. UK farmers are used to coping with ups and downs, but there’s no denying that the past year has brought some particularly tough conditions. Fuel, fertiliser, energy, feed, machinery, and labour costs have all risen, while the weather has added more pressure to already tight margins. With the right financial planning, though, there are still opportunities to protect your business, strengthen your position, and prepare for better seasons ahead.

This year, the challenge has been made even tougher by the weather. After one of the driest springs in over 50 years and the hottest summer since records began, the 2025 harvest is shaping up to be one of the worst on record. Wheat yields are running around 9% below the ten-year average, oats are down by 13%, and barley isn’t faring much better. Livestock farmers are also under pressure, with beef producers reporting feed costs soaring by over £1,000 a week just to keep herds going.

It’s tempting to look on the bright side, hoping prices will settle, subsidies will provide cover, or diversification will make up the gap. But the harder truth is this: without a clear handle on your numbers, you risk losing more than just profit. Poor financial planning can cost you valuable tax reliefs, essential cash flow, and even the long-term viability of your farm.

This isn’t about being negative for the sake of it. It’s about being realistic. Research consistently shows that people respond more to what they could lose than to what they could gain – and in farming right now, there’s a lot at stake.

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What’s at risk for farmers?

• Losing control of cash flow – This year’s poor yields mean some farms will see their income fall short of forecasts. Without proper planning, that gap could make it harder to cover wages, bills, and loan repayments.
• Missing out on tax savings – Agricultural Property Relief, Business Property Relief, and capital allowances are often underused. If you’re not planning ahead, you could be handing over more tax than necessary.
• Falling behind on diversification opportunities – For some, diversification has softened the blow of a poor harvest. But new income streams require careful financial checks – jump in too quickly, and you risk overstretching.
• Succession challenges – With tougher years ahead, succession planning can get pushed aside. Leave it too late, and you may face family disputes, large     inheritance tax bills, or even the forced sale of land.
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Planning for 2026 – learning from this year

Farming is always at the mercy of the weather, but there are steps you can take now to prepare for the next season:

• Model different yield outcomes – Build cash-flow forecasts that show what happens if next year mirrors 2025, and where the pressure points will be.
• Consider forward contracts – Locking in prices on part of your crop can provide protection if markets move against you.
• Invest in resilience – From soil health improvements to water storage, long-term planning reduces the risk of another weather-driven hit.
• Review     support schemes early – With subsidies shifting, make sure you understand what you qualify for and build that into your year-end planning.
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How Bernard Rogers & Co can help

We work closely with farmers and agricultural businesses to protect them against these very risks. That means:

• Cash flow forecasting so you’re never caught short.
• Tax planning that makes the most of reliefs specific to agriculture.
• Diversification advice to test whether a new venture stacks up financially before you commit.
• Succession planning that ensures your business passes smoothly to the next generation.
• Digital  accounting support to keep your books accurate and compliant with HMRC’s digital requirements.
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Our role isn’t just about highlighting opportunities – it’s about helping you avoid losses that could damage your business for years to come.
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The bottom line

Farming will always involve a degree of uncertainty, but with the right financial planning, you don’t have to face it alone. This year’s harvest has been challenging, yet it’s also a reminder of how important it is to stay in control of your numbers, plan ahead, and take steps now to strengthen your position. With the right support, you can protect what you’ve built, make the most of reliefs and opportunities, and prepare with confidence for whatever the next season brings. At Bernard Rogers & Co, we’re here to help you do just that.