Agri Facts
February 2026
Welcome to our February 2026 edition of Agrifacts. The days are at last getting longer and bringing with them the hope of drier weather and the prospect of getting back onto the land. Many of us are waiting with anticipation to begin spring cultivations, drilling, and spraying, once conditions allow.
Meanwhile, on the policy front, considerable attention is focused on Defra’s proposals regarding the implementation of the new Sustainable Farming Incentive (SFI) scheme. We will keep you updated when any details are released. Make sure you are following us on social media for the latest updates.
We are keen to ensure that Agrifacts remains both interesting and useful to you. We’d love to hear your thoughts, any suggestions for topics, or whether you prefer one-off articles or regular features. Your suggestions and feedback are invaluable in shaping future editions. Please send all suggestions to agrifacts@fishergerman.co.uk
Defra unveils reformed Sustainable Farming Incentive (SFI)
Following the announcement by Defra Secretary Emma Reynolds, we anticipate that there is likely to be a brief application window making early planning crucial to maximise opportunities within the scheme.
The initial application period is expected to open in June, targeting smaller farms and those not currently engaged in environmental land management agreements. Subsequently, a second window will be opened, enabling all farmers to submit their applications.
What farmers should do now
Although many technical details of the updated SFI remain undisclosed, it is prudent for farmers to begin shaping their strategies. Plans should be flexible, allowing for adaptation as further details emerge, thereby minimising the risk of making last-minute changes under tight deadlines.
It is anticipated that the principal objectives of the scheme will remain, though they may become more focused, offering fewer options and imposing financial restrictions. More complex arable options, such as companion cropping, could be omitted in favour of elements like grass margins and buffer zones, which are easier to audit. Options supporting pollinators and providing wild bird food are also expected to continue within the scheme.
Ongoing uncertainty
One significant unresolved issue is how quickly the revised SFI will replace
existing Countryside Stewardship MidTier agreements. Certain agreements due to expire at the end of 2025 have been granted a one-year extension, however, many more are due to end this autumn. At present, there is no clarity on whether these schemes will be further extended or if affected farms will need to transition to the new SFI. This could lead to a surge of applications and heightened competition for funding.
Begin mapping and reviewing
Regardless of a farm’s size or its current agreements, the recommendation is to start preparations early. Farms already participating in Countryside Stewardship should assess which aspects are working and identify areas for improvement. Farms not currently involved should review previous SFI options to determine which at might return or evolve under the new structure. Mapping farms now will help ensure that farms are well positioned once full details of the scheme are released.
February 2026 (Midlands) ex farm
Market outlook
The agricultural marketplace is currently navigating the pressure of strong global supplies and keeping commodity prices subdued. Improving farm incomes in England, tightening market cycles, unpredictable weather and the shadow of escalating global risks are combining to create a more volatile year ahead.
Agricultural markets
Grain and oilseed markets across the globe are now entering their third consecutive year of bearish pricing, a direct result of record production levels and fierce export competition. For many farmers this naturally squeezes margins, however, the pressure of oversupply is gradually being absorbed, and we may soon be approaching a cyclical turning point where fortunes could improve.
Agriculture remains highly cyclical. Extended periods of oversupply often lead to reduced investment and lower input usage, which can eventually tighten production and trigger sharp price recoveries.
Weather remains a key short-term risk factor. This year, dry conditions in Argentina, and excessive moisture threatens crops in Brazil. Meanwhile, parts of the U.S. Plains are starting to dry out, all just as the Northern Hemisphere approaches its crucial planting season.
Global political tensions
Beyond the fundamentals of supply and demand, the rise in global political tensions, particularly with Iran, is adding
another layer of uncertainty. Diplomatic negotiations continue, but the markets are already factoring in the risk of military escalation in the Middle East.
Should the U.S. launch a strike on Iran, this would likely trigger a sharp reaction across financial and commodity markets. Energy markets would be the primary transmission channel, with crude oil prices expected to rise sharply as vital supply routes come under threat. Higher energy prices would then influence agricultural markets through biofuel demand, increasing the attractiveness of crops like corn, oilseeds and vegetable oils.
On top of this, investment funds currently hold substantial short positions in many agricultural commodities. Any geopolitical shock could force rapid short covering, pushing prices higher very quickly, even if supply and demand fundamentals remain unchanged. These technical surges don’t always last, but for alert producers, they can offer valuable selling opportunities.
Conversely, should diplomacy win the day, markets will likely refocus on the ample global supply levels reinforcing the prevailing downward price trend.
Looking ahead
All things considered, agricultural markets appear to be nearing the lower end of the pricing cycle, with limited further downside expected under current supply conditions. However, the increasing reliance on diversified farm income, rising weather risks and the ever-present risk of geopolitical tensions mean that volatility is likely to intensify in the coming months.
For producers and market participants, the main challenge will be managing risk in an environment where sudden price movements, especially upwards, may occur rapidly and come with little warning.
We are a nation of hedgerows, but how many miles of hedges are there in the UK ?
a) Nearly 500,000 miles
b) Almost 375,000 miles
c) Verging on 290,000 miles
