Over the past few years, farming businesses have faced a perfect storm of challenges. Rising input costs, falling grain prices, changing support schemes, and increasing pressure on margins have all combined to create one of the most difficult economic environments many farmers have experienced.
For many businesses, profitability is no longer simply about growing a good crop – it’s about understanding exactly what that crop costs to produce.
At Indigro, we’ve been looking closely at the numbers and asking an important question: how can we help farmers make better-informed decisions in an increasingly challenging landscape?
That question is what led us to develop our new Cost of Production Benchmarking Tool.
Why cost of production matters more than ever
Cost of production is becoming one of the most important measurements on farm. Understanding what it costs to produce a tonne of wheat, barley, oilseed rape or any other crop gives farmers a much clearer picture of where profitability is being won – or lost.
The challenge is that many costs have changed dramatically in recent years.
Looking at DEFRA data alongside inflation trends from 2020 onwards reveals just how significant those increases have been. Variable costs including fertiliser, crop protection products and seed have all risen considerably. But perhaps more importantly, fixed costs have also increased substantially.
When those increasing costs are compared against current grain prices, the picture becomes concerning.
At current wheat prices of around £175/t, average fixed and variable costs suggest a business could need to grow a 8.5t/ha wheat crop simply to break even.
When you consider that national wheat yields have averaged closer to 8t/ha over the last two decades – and many farms have experienced lower yields during recent seasons – it becomes clear why margins are under pressure.
Alongside this, the rapid phasing out of BPS payments and uncertainty around schemes such as SFI have added further pressure to farm businesses.
The reality is that farming has become more financially complex, and understanding costs is no longer optional – it’s essential.
The challenge: knowing your numbers is only half the story
Many farmers already have a good understanding of their own figures. They know their fertiliser spend, machinery costs and overall budgets.
But numbers in isolation can only tell part of the story.
A key question many businesses struggle to answer is:
“How do my costs compare with others?”
If machinery costs appear high, are they genuinely high, or are they in line with similar farms? If variable costs are increasing, are others seeing the same trend? If margins are under pressure, where should attention be focused first?
Without context, it’s difficult to know where opportunities for improvement actually exist.
Introducing Indigro’s Cost of Production Benchmarking Tool
To help address this challenge, we’re currently developing a Cost of Production Benchmarking Tool designed specifically for farmers.
The aim is simple: provide meaningful benchmarking that allows businesses to compare their costs against similar farming operations and identify opportunities to improve efficiency and profitability.
The tool is being designed to make cost analysis as straightforward and practical as possible.
It will allow farmers to:
- Compare their cost of production against other businesses, anonymously
- Break costs down into fixed and variable categories
- Identify areas where costs differ significantly
- Highlight potential opportunities for improvement
- Gain clearer insight into what is driving profitability
Rather than simply generating more figures, the objective is to turn data into practical information that can support real on-farm decision making.
Built with farmers, for farmers
We’ve been developing the tool over the last year and are continuing to refine how it works.
The next stage is ensuring that it delivers meaningful and useful information for the people who will actually use it.
This year we’ll be working with clients to test the platform, gather feedback and continue improving the system before sharing results at the Indigro Conference in 2027.
Benchmarking only becomes powerful when the information is relevant, practical and easy to interpret – which is why farmer input will be such an important part of its development.
Interested in being involved?
We’re currently looking for businesses interested in taking part in the pilot phase of the project.
If you’d like to help shape the future development of the tool, gain early access, and contribute to building something designed to support farm profitability, we’d love to hear from you.
Get in touch with the Indigro team to discuss becoming involved.
