Wheat margin achievable in 2026 after tough year for growers
© Tim Scrivener UK cereals growers have endured a challenging 12 months, with low farmgate prices, weather constraints and a smaller domestic crop.
While pressure remains on wheat prices due to a well-supplied global market, some early signs of optimism are emerging for 2026, with plantings progressing well and input costs stabilising.
Currently, spot prices for ex-farm feed wheat remain low at roughly £165/t.
UK feed wheat futures for the May 2026 contract dipped below £170/t for the first time this week, to a contract low of £168.2/t on 16 December.
See also: Fertiliser markets unsettled as UK suppliers stock up
The latest US Department of Agriculture World Agricultural Supply and Demand Estimates report raised its global wheat forecast to 837.8m tonnes for 2025-26, driven by expectations of large crops in Argentina, Australia and Canada.
Luke Carr, chief revenue officer at grain marketing platform Hectare Trading, said: “UK arable farmers have struggled throughout 2025 due to consistently low grain prices.”
The numbers
- £168.2/t UK feed wheat futures on 16 December for the May 2026 contract
- £259/ha Average fertiliser spend for winter wheat in 2025
- £695.20/ha Estimated gross margin for feed wheat in 2026 (based on 8t/ha and £160/t)
Data collected by Hectare Trading indicates that spot feed wheat ex-farm prices dipped to their lowest levels of the year in late May at £157/t, followed by a brief harvest rally, after which averages drifted down again into the autumn.
Mr Carr said: “Faced with such low prices, UK farmers largely refrained from selling their 2025 crop forward before harvest.
“Since harvest, with few signs of improvement in the market, they have looked to forward-selling to take advantage of carry.”
Cost of production
Based off aggregated and anonymised analysis carried out by farm business data and analytics company Yagro shows that costs of production for winter wheat plateaued for the 2025 harvest year, with total costs easing back marginally on year-earlier levels.
Average spend on fertilisers for winter wheat dropped from £278/ha in 2024 to £259/ha in 2025, with growers focusing on more technical applications of fertilisers.
Rebecca Geraghty, managing director of Yagro Analytics, said: “There is a clear increase in liquid fertiliser use and a reduction in ammonium nitrate, alongside modest growth in organic and urea-based sources.
“Overall, 2025 data depicts a maturing nitrogen strategy – less about volume and more about method, timing and flexibility.”
Yagro figures also show fungicide costs dropping from a median of £125/ha in 2024 to £102/ha in 2025.
In contrast, across all wheat types herbicide costs increased by £15/ha on average.
Seed costs were estimated to have increased by roughly £10/ha to £102/ha in the past year.
Future margins
For the 2025-26 growing season, Yagro has estimated total input costs for feed wheat at £585/ha.
Assuming input costs of seed at £103/ha, fertiliser at £240/ha and chemicals at £242/ha.
Operational costs, covering cultivations, planting, spraying, spreading fertiliser and harvesting, were forecast at £525/ha.
Modelling by Yagro suggests that, assuming a yield of 8t/ha and selling at a price of £160/t, an estimated gross margin of £695.20/ha and a net margin of £170.20/ha could be achieved by growers.
This would leave a break-even price of £138.72/t, and a break-even yield at 6.94t/ha.
Total input costs for milling wheat were estimated at £669.90/ha for the 2025-26 growing season, along with operational costs of £525/ha
With a budgeted yield of 8t/ha and a grain price of £180/t, Ms Geraghty said this model delivered an estimated gross margin of £794.1/ha for milling wheat, a net margin of £269.1/ha, and a break-even price of £146.36/t.