NFU warns farm income gains may hide deeper strain

A rise in UK farm income has been overshadowed by fresh warnings that fertiliser, fuel and energy costs are again putting producers under pressure.

New Defra figures put total income from farming in the UK at £8.4 billion in 2025, up 20.5% on 2024.

The rise was driven largely by stronger livestock, dairy and beef returns, while crop output fell to its lowest level since 2020.

Total income from farming is a broad measure of profit across the whole industry, meaning stronger returns in some sectors can hide weaker performance elsewhere.

The NFU said the figures contained welcome findings, particularly for livestock, poultry and dairy, but reflected a period of relatively stable input costs and stronger beef and dairy commodity prices.

It warned that conditions had shifted since the period covered by the data, with farmers facing renewed cost volatility linked to global instability.

NFU President Tom Bradshaw said: “The latest figures are positive for some sectors such as livestock, poultry and dairy which performed well in 2025.”

He said profitable farm businesses were needed to fund investment in environmental regulations, animal welfare demands and the resilience of the UK food system.

“Farming is a business like any other and it’s important to recognise huge investment is needed over the coming decade to meet environmental regulations, deliver the ever-growing animal welfare demands and build the resilience of the UK food system,” he said.

“This investment can only be made by profitable businesses that have long-term confidence.”

Mr Bradshaw said the situation had changed sharply since the Defra recording period.

“Fast forward six months and huge volatility has returned, and British agriculture is under immense economic strain, driven by the conflict in the Middle East,” he said.

He said farm margins were under pressure, with many being eroded by falling prices.

“The job of producing food is much harder now due to spiralling costs of fertiliser, fuel and energy,” he said.

The Defra figures showed livestock output rose 10.2% in 2025 to £22.2 billion, with dairy accounting for the largest share at £7 billion.

Beef also performed strongly, contributing £5.1 billion in output value after recording the largest percentage increase on 2024, up 22.8%.

The rise was driven by sustained demand and a reduced UK cattle herd.

Poultry saw more modest gains, with meat output value up £19 million to £3.37 billion and egg output value rising £94 million to £1.45 billion.

Crops had a weaker year, with total output value falling 3.1% to £11.4 billion, the lowest level since 2020.

Barley, sugar beet and potatoes all recorded falls, driven by a combination of lower prices, difficult growing conditions, pest pressures and weaker annual price indices.

Barley output value dropped by £201 million, or 16.8%, due to low prices, poor quality and a smaller planted area.

Sugar beet fell by £80 million, or 21.8%, after poor planting conditions and pest pressures were compounded by a 15.8% fall in the annual price index.

Potato output value also fell by £83 million, as increases in area and production were not enough to offset a 31.2% fall in the annual price index.

Mr Bradshaw said 2025 had been another difficult year for cereal farmers due to uncertainty over agri-environment schemes and extreme weather.

“Building farming’s resilience is crucial,” he said.

The NFU said its Fertiliser Resilience Plan set out immediate actions needed from government and industry to improve short-term resilience and affordability.

Mr Bradshaw also criticised the recent announcement on Environmental Land Management schemes, saying there was a funding gap between ambition and delivery.

“Our focus remains on working to build a profitable future for UK farming and to restore the confidence our industry so desperately needs to thrive and grow,” he said.

He added that British farmers helped feed 70 million people, supported economic growth and delivered environmental benefits.

“As we stand now, this is getting increasingly harder and the burden of risk is growing,” Mr Bradshaw said.