For many, 2015 has been an outstanding growing season with yields well above average – and at record levels in some cases.

A large number of farms will have had two consecutive years where physical output has been considerably better than five- or 10-year averages, says Andersons Midlands partner Sebastian Graff-Baker.

“These yields are especially welcome as growers move into a third season without any sign of a significant worldwide event that might lead to an increase in ex-farm combinable crop prices. These values are not being helped by exchange rates, particularly the relationship between sterling and the euro.”

See also: Management, not market, will make or break arable profits

Producers who achieved high yields and made some prudent early sales should see some good gross margins for 2015 harvest.

Due to the large crop, others may have had to sell more at harvest than planned simply to make space, says Mr Graff-Baker. “With harvest prices for feed wheat below £100/t, high yields are unlikely to have fully offset low values in these circumstances.”

Looking ahead, growers may well have to live with ex-farm feed wheat prices for 2016 and 2017 in the region of £120-£125/t, he adds. “It was not so long ago that many were preparing their business plans on the basis of a price of £140-£150/t.”

Break crops are arguably under more pressure, says Mr Graff-Baker. “Growers are looking hard at the value of various breaks, including oilseed rape. It’s not just-price-driven – some consider growing the crop without neonicotinoid seed treatments as something of a lottery.”

However, establishment techniques have improved – generally speaking, this is the third autumn in a row that crops look strong, thanks to an open drilling window.

“With prices at £260/t including oils, a typical 3.5t/ha crop will produce a margin of about £480/ha. Looked at in isolation, an oilseed crop has to perform particularly well for it to make sense.”

The same is true for pulses, the area of which looks set to rise despite low prices, as people see these crops as a convenient way of meeting CAP greening rules.

“I suspect the uplift we saw in 2015 might have been a slight-over-reaction to the new scheme, which was not well defined at the time, though this trend appears to be continuing.”

Winter and spring beans might only produce gross margins of £370 and £390/ha respectively, and peas are likely to trail both, he adds. Pulses also require skilled management, including careful drying and storage, which some growers consider is not sufficiently rewarded at current prices, he adds.

“The pulse area will certainly become more volatile and there’s a real possibility that peas and beans could become Cinderella crops. However, as with all break crops, it is important to look at their contribution to the rotation as a whole, not just one year.

“Two or even three wheats followed by oilseed rape is often no longer sustainable. Rape yields are suffering – there is only limited evidence of it widening out in the rotation – and blackgrass and other weeds are becoming harder to control, a factor that is driving spring cropping more than anything else. You also have to consider the extra yield and quality that a first wheat will produce.”

The key to profitable production throughout the rotation is knowing, managing and, if necessary, reducing the costs of production, says Mr Graff-Baker. In some situations, radical change such as foregoing cropping altogether on certain fields or in parts of them may be needed to make the sums add up.

Whilst recent falls in fuel and fertiliser prices have undoubtedly helped, the three key cost categories where there may be the greatest opportunities for improvement are labour, power and for some, the cost of rented land, says Mr Graff-Baker.

In planning how to respond to lower price prospects growers should consider several factors, he advises.

Calculating the ‘real’ contribution to profit made by short-term rented land is vital. “If rent exceeds 30% of output there is little prospect of adding to business profit. If it does not add to the bottom line, then it is better to just walk away,” he says.

Considering the possibility of collaborating with others to share machinery and labour is another good move. “There are many successful examples of where this has been achieved, with the twin benefits of lower operating costs and release of capital from surplus machinery.”

Growers should also identify the commercial and agronomic advantages of fallow in crop rotations. They should also assess whether to crop areas of the farm that suffer from consistently low yields and therefore uneconomic costs of production, says Mr Graff-Baker.

“These might be unproductive headlands, awkward field corners or in some cases whole fields, for instance where there is a heavy resistant blackgrass infestation.”

Poorer areas often create a substantial loss hidden in the average yield, he adds. “While addressing this may require a change of overhead structure, continuing without change is an expensive option.”

Detailed management of land should also be examined. Opportunities for improvement often lie in tackling drainage, vermin, game, shading or simply avoidable soil compaction, he notes.

“Some of these areas can be difficult to tackle, or require a level of change that has not been previously considered,” says Mr Graff-Baker.

However, positive results can be achieved, as demonstrated by this example of changes made on a real farm.