UK Farmers Struggle with Highest Input Costs Since 2022

UK farmers are facing their highest input costs since the start of the Russia-Ukraine war in 2022, driven by geopolitical disruption and extreme weather conditions. The latest agflation figures from Andersons show that costs have increased by 8.6% year-on-year, more than double the rate before the Iran conflict began.

The introduction of the UK Carbon Border Adjustment Mechanism (CBAM) in 2027 will add further cost pressure on fertiliser, while tractor diesel prices remain nearly 40% above last year's levels at £97.3 per litre. This is feeding into machinery running costs and contracting rates.

The drought is also affecting crop yields, with UK winter wheat yields expected to be below the five-year average. However, London wheat futures for November 2026 have firmed to around £200 per tonne due to poor harvest prospects across the UK, EU, and North America.

Dairy farmers are facing additional challenges, including below-cost milk prices and potential winter fodder shortages. Beef and sheep producers are in a relatively stronger position, with tight domestic supplies supporting farmgate prices.