Analyst insight: Will wheat still lead for harvest 2027 gross margins?

The big picture

It’s been a tough few seasons for UK arable farms. Weather has been unpredictable, yields have been variable, and many costs have risen.

So, looking ahead to harvest 2027, the key question remains: What should you be drilling this autumn?

May and June are a decision point for many farmers. Fertiliser companies release prices for the new season, while farmers will make cropping and fertiliser buying decisions for the 2027/28 harvest. Although fertiliser prices have stabilised in recent weeks, they remain at elevated levels, increasing production costs and affecting the margins achievable from different crops.

In this article, we present analysis of the gross margin potential for different crops in 2027 to help support decision-making during this key period. It’s important to remember that these gross margin figures are based on standard assumptions (yield, price, costs).  The figures are not specific to any one business. As such, results should be best used to compare crops, rather than predict profit.

Introducing the harvest 2027 picture

UK new crop feed wheat futures (Nov-27) averaged £196/t in May. This is up 3% compared to last year’s average new crop prices, when the Nov-26 contract averaged £191/t.

Paris rapeseed futures for Nov-27 in May were also up 3% compared to Nov-26 pricing to €493/t (£426/t).

However, input costs remain elevated. The fertiliser market has been impacted by the conflict in the Middle East due to increases in global gas and oil prices and supply chain impacts on urea supplies. Fertiliser prices increased significantly during March and April 2026. Since then, prices have slowed down. As of the week ending 22 May, imported ammonium nitrate prices were at £491/t, granular urea at £613/t, and liquid urea at £469/t. This is up 32% for imported ammonium nitrate, 54% for granular urea, and 48% for liquid urea.

Within this analysis, we use the April 2026 average spot domestic UK AN 34.5%. For new season prices, we could see actual fertiliser costs differ from this.

Harvest 2027 gross margins – wheat top of the crops

Looking forward, the evidence still points to winter milling wheat and feed wheat staying at the top of the gross margin table (Table 1).

Table 1. Indicative gross margin estimates for harvest 2027

Please note that totals may not agree due to rounding.

Source: AHDB analysis, Agriculture Budgeting and Costings Book, Defra and AHDB Farmbench. Prices based on Nov-27 futures, merchant quotes, and the historical relationship to feed wheat futures. 

However, compared to the last time we produced this analysis (for harvest 2025), gross margins for feed wheat are down 17%, which is indicative of the challenges facing arable farmers. Higher fertiliser costs are the main factor here, but a lower assumed yield and crop price also contribute.

Despite the challenges of recent years, wheat does retain higher yield potential compared to other crops, and margins are positive considering current UK feed wheat pricing for Nov-27.

We have used data from Defra on the five-year average for wheat yields and applied a 5% reduction for milling wheat to reflect the lower yields for milling varieties.

Looking to milling wheat premiums, over recent months we have seen significant declines. While yields were low in 2025, the quality of the UK crop was high, and there were limited global quality issues. An estimated 47% of UK Flour Millers (UKFM) group 1 variety samples met a typical specification in 2025. This was more than double 2024’s rate (20%) and was the highest level since 2003.

Milling wheat premiums are an important watch point; it would only take a £3/t improvement in these for milling wheat gross margins to overtake those for feed wheat. In this analysis, we used a spot average (May 25 to April 26) ex-farm premium of £15/t for bread wheat over feed wheat from AHDB’s Corn Returns. A longer-term, five-year average would be much higher at £41/t.

AHDB’s Planting and Variety Survey estimates that the GB wheat area in 2026 is up by 3% to 1,711 Kha. The total area was in line with the 1,712 Kha in 2023. Group 1 varieties account for 23% of the 2026 GB wheat area, up four percentage points from 2025. However, future milling premiums will also depend on 2026 yields and quality, plus global market trends.

Spring malting barley: still a solid choice

Both spring barley (-18%) and winter barley (-1%) areas saw decreases in the 2026 AHDB Planting and Variety Survey.

Following on from wheat, results show spring malting barley as an attractive planting option for harvest 2027, although it has dropped slightly in relative position since the harvest 2025 analysis. Straw has not been accounted for in this gross margin work; this also could contribute to the outlook for profitability.

Malting barley premiums have dropped in recent seasons, with tariff wars impacting alcohol exports and domestic consumer demand reducing due to the cost-of-living crisis, the impact of GLP-1 weight loss drugs, and lower consumption for Gen Z and Millennials. With weather challenges and elevated costs, the risk to businesses not making specification is heightened. We used an average (May 25 to April 26) ex-farm premium, which was £18/t over feed barley, from corn returns. Again, the five-year average would be higher at £35/t.

Break crop options

Looking to break crops, the oilseed rape (OSR) area has fallen in recent years due to pests and inconsistent yields. Having reached a 42-year low in 2025 there has been a significant rebound in area for 2026 harvest, though it’s still low compared to historical levels.

Large nitrogen costs for OSR impact gross margins in our analysis. However, favourable pricing means it has risen to third spot in our table, up from fifth in the analysis for harvest 2025. The Paris rapeseed Nov-27 contract in May 2026 averaged 3% higher than the new-new crop contract (Nov-26 contract) in May 2025.

Where farmers are concerned about the viability of OSR due to pest pressure, field beans could provide an alternative, with lower input costs. They also provide a useful nitrogen benefit for the rotation.

Concluding comments

Selecting cropping options remains an ongoing challenge, particularly with alternative Sustainable Farming Incentive (SFI) options in England, cost volatility and difficult weather.

This year, the conflict in the Middle East creates additional challenges, particularly fertiliser pricing, which impact gross margin calculations in the short term, and could also impact plant protection product costs into next season. It is essential to consider cropping margins and profitability over a longer period, for example, three to five years, when making decisions.

Unsurprisingly, for 2027 wheat remains at the top of the rankings. Milling wheat gross margins remain strong, but with fertiliser costs rising and considering premium levels, there now isn’t much to choose between milling and feed wheat. A small increase in premiums would change the picture, so monitoring these is key.  

Use data to inform your decisions

• AHDB publishes weekly Fertiliser prices, which you can use as a benchmark for any quotes from fertiliser companies. Bear in mind that different products will include different percentages of N, so factor this into your price comparisons
• With fertiliser prices at high levels, it is more important than ever to optimise application. The Nutrient Management Guide (RB209) provides usual advice and information
• Our margins table is based on a fixed crop and fertiliser price. You can use this as a guide to produce your own budget, and stress test this for changing crop prices and yields using our net margin sensitivity analysis tool
• For farmers in England, the Sustainable Farming Incentive (SFI) offers a further option. Whilst large-scale use of SFI is unlikely to be more profitable than cropping, some actions could be considered for poorer-performing land. You can access our recently launched SFI tool to understand profit margins from each SFI action

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