11th August 2026
How marginal gains — not wholesale change — can transform profitability
Farm economics continue to be under pressure; input costs remain high, commodity prices volatile, and the gap between a struggling business and a profitable one can feel impossibly wide. Yet the difference between a low and a top performing farm business is rarely down to a wholesale system change. More often, it comes down to something more achievable: marginal gain, is the view of Will Foyle, farm business consultant with Hutchinsons. His advice is to focus on a series of smaller improvements — to yield, to fixed costs, to variable costs — each modest in isolation, but collectively delivering a significant uplift to the bottom line. “The difference between a farm business that survives the next few years and one that thrives may come down to less than you think.”
“If a farm turns over £1,000,000 and operates on a 10% profit margin, it generates £100,000 of profit against £900,000 of costs — a tight but not untypical scenario,” says Will. “Now consider what happens if turnover increases by just 5% — to £1,050,000 — while costs remain unchanged. Profit rises to £150,000. That is a 50% increase in profit from a 5% increase in turnover. The same logic applies in reverse: bringing costs down by 5% while maintaining output delivers an equally powerful uplift,” he says. “Small percentage changes to turnover or cost translate into disproportionately large changes to profit — but only if you know your numbers.”
He points out marginal gains only work from a clear baseline. “That means understanding cost of production on a per tonne and per hectare basis, by crop and by field; knowing your strike price — the point at which each enterprise becomes profitable; and having a grain marketing strategy, not simply selling at harvest. Benchmarking against comparable businesses then reveals where costs are competitive and where they are higher than they need to be.”
Fixed costs — depreciation, labour, machinery, rent and finance — do not disappear when output falls, making their reduction particularly valuable. Will identifies six areas worth examining:
Automation. Once the preserve of high-value horticulture, automation is making its way into broad-acre cropping. Upgrading a grain drying and handling system, for example, can materially reduce the labour requirement at harvest and with it a meaningful element of fixed cost.
Benchmarking. Identifying operations where costs exceed those of comparable farms creates the opportunity to act. Slurry spreading is a practical example: analysis may show it is more cost-effective to use a contractor than to own and maintain the equipment.
Renewables. Against rising electricity prices, the economics of on-farm solar with battery storage are increasingly compelling. For farms with significant energy demands — grain drying, refrigeration, irrigation — return on investment can be substantial and predictable.
Contract versus ownership. Are there operations where contracting out would be more cost-effective than maintaining in-house resource? Could the farm’s own machinery be used for contracting work, spreading fixed costs across a wider area?
Cropping choices. A rotation with a glut of combining and drilling demand may require larger machinery and additional labour. Including winter barley, for example, brings forward harvest, eases pressure on the combine, and creates time for post-harvest cultivations ahead of oilseed rape establishment.
Machinery replacement policy. A clear, regularly reviewed policy — with a sound understanding of the true cost of change — allows decisions to be made at the right time rather than reactively.
Managing variable costs
Will explains whilst variable costs are directly linked to agronomic decisions they offer real scope for efficiency gains, provided plans are tailored to each field’s potential rather than applied uniformly.
Realistic yield targets. Treating a 10 t/ha field the same as a 7 t/ha field wastes inputs on the latter and under-invests in the former. Field-by-field planning, informed by yield data, is more commercially rational.
Variable rate technology. Variable rate application of nitrogen, phosphate and potash directs inputs where they will have greatest effect. The data to support this — from soil sampling, nutrient mapping and platforms such as Omnia — is increasingly accessible.
Nutrient use efficiency. Building resilient soils and improving nutrient cycling reduces bought-in fertiliser requirement. Moving away from a sufficiency model towards one that unlocks the soil’s existing nutrient potential can deliver fertiliser savings without compromising yield.
Variable rate seed. Optimising plant populations across variable soils improves tiller numbers in spring. Measuring plants/m² at establishment, rather than relying solely on thousand grain weight calculations, gives a more direct indicator of success.
Variety choice. The Recommended List continues to evolve. Retaining an established variety on the basis of familiarity alone, without scrutinising its performance against newer options, risks leaving yield — and income — on the table.
“In isolation, none of these changes appears transformative,” says Will. “But consider what happens when they are combined.” Modelling across a 400ha farm suggests that a 5% improvement in yield, a 5% reduction in fixed costs and a 5% reduction in variable costs can reduce the cost of production by around £15/tonne — equivalent to a net benefit of approximately £53,000 across the farm.
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Source: press release issued by Siafu.