Is your farm turning a truly sustainable profit?
Farming is facing a perfect storm of challenges – from the end of Basic Payments to growing environmental pressures and increasingly extreme weather.
These pressures are sparking urgent conversations – both in the industry and in Government – about what needs to change to support farm profitability. Former NFU President Baroness Minette Batters is currently leading a review to support this work.
But when we talk about farm profitability, one crucial question often gets glossed over:
How much profit is enough?
It’s something we’ve been looking closely at, here at Strutt & Parker, in a recent project for the York and North Yorkshire Combined Authority. The aim of this work was to better understand the financial position of farming businesses across the region.
The headline finding was that half of farms are not hitting ‘economically sustainable’ profit levels.
In the report, we set that sustainable level at £34,500 in annual profit – equivalent to the UK’s median household income, or around £250/ha. It felt like the minimum required to support the owners of a farm and allow them to reinvest in the business.
Of course, every farm is different. For some, that figure might need to be higher, while others may feel they are able to work with less.
Have you worked out what your ‘enough’ looks like?
If not, now is a good time to start. And if you have – but you’re not there yet – think about
what needs to change.
Our Rural team offers tailored farm business reviews that help you:
- Clarify your business and personal goals
- Benchmark your performance
- Explore practical, workable options for the future
We know how important it is to build resilience in a farming business – especially in today’s volatile and unpredictable world. Knowing how your farm is performing, and where it may be under strain, is the starting point.
An independent review can help challenge assumptions, bring in fresh ideas, and give you a clear direction.
We can explore ways to:
- Improve efficiency
- Align environmental schemes with your plans
- Diversify income
- Collaborate with other businesses
- Plan for succession and understand the impact of IHT changes
A critical question will be: what does success look like in five years’ time?
This shouldn’t just be about business goals. It’s also about you and your family – taking into account family dynamics, workload, who’s coming into the business, and who might be hoping to step back.
In our experience, most farms aren’t failing – but many are plateauing. Often, they’re relying on off-farm income or taking minimal drawings just to stand still.
And the most resilient farms? They’re not necessarily the biggest. They’re the ones run by people who are informed, adaptable, and focused on the detail of managing their business.
With the right advice and a clear plan, you can move from reacting to day-to-day pressures to shaping your farm’s future – and making a profit that is genuinely sustainable.
If you would like to talk about how we can help you plan for the future, contact Paul Dennison or Alice Johnson.
