On paper, 2026–27 looks like a strong season. ABARES expects national winter crop production of about 61 million tonnes, the fourth largest on record, even after a 12% fall from last year (DAFF, 2026).
Yet the same outlook forecasts average broadacre farm business profit to fall by 39%, to about $133,000 per farm (DAFF, 2026). Falling revenue and continued high costs, including fertiliser costs, are expected to squeeze farm profit across Australia.
Why fertiliser costs are squeezing farm profit
Costs are the main reason. Fertiliser costs rose by an average of 16% in 2025–26, and average broadacre farm costs are expected to reach about $734,000 per farm in 2026–27 (Marshall, 2026). Fuel and freight costs have also risen.
ABARES notes that high fertiliser prices affected how much growers planted and how much they harvested, although the impact was smaller than first expected (DAFF, 2026). For many growers, that meant hard choices about rates and paddocks before the season had even started.
The averages also hide wide variation. Some regions and enterprises may do better than the forecast and others worse, depending on rainfall, crop mix and how much input was bought before prices rose.
When input costs rise faster than grain prices, a big crop does not guarantee a good year. The question shifts from "how much did we grow?" to "how much did it cost to grow it, and how much of what we applied actually reached the crop?"
Input efficiency becomes the margin
For most growers, the levers are familiar:
- Matching nutrient rates to soil tests and realistic yield potential
- Timing applications to when the crop can actually use them
- Managing soil constraints, such as acidity, that limit how well roots can take up what is applied
- Tracking results paddock by paddock, so decisions are based on local evidence
None of these is new. What has changed is how much each one is worth. In a low-cost year, a small inefficiency is easy to absorb. When fertiliser makes up a larger share of costs, the same inefficiency comes straight off the margin.
Input efficiency also depends on soil condition. Nutrients applied to soil with poor structure or low pH may not be fully available to the crop, which is why soil testing and amelioration remain the foundations of good nutrient management.
Where soil biology fits
Soil biology is part of the input efficiency conversation too. Microbes contribute to nutrient cycling in soil, and there is growing interest in whether biological inputs can help growers get more value from the nutrients they already apply.
Biological inputs are not a substitute for good agronomy. At best, they are one more tool, and growers are right to ask for local trial data before changing a programme that already works.
That is a question for well-designed field trials, not assumptions. We are developing a coated mineral granule that carries beneficial soil microbes, designed for application through existing equipment. Our planned trials will test whether it adds value compared with the mineral alone and an untreated control. We are not yet making claims about yield or nutrient savings. You can read more about why we started DuraTerra.
What this season shows is why the question matters. In years like this, input efficiency is not a nice-to-have. It decides the margin.
Note: ABARES figures are forecasts and may change as the season progresses.
Frequently asked questions
Why are farm profits falling despite a big harvest?
ABARES forecasts lower revenue and continued high costs, including fertiliser, fuel and freight, to outweigh the benefit of a large winter crop in 2026–27.
How much have fertiliser costs risen?
Fertiliser costs rose by an average of 16% in 2025–26, according to ABARES figures reported by Farm Weekly.
What can growers do about high input costs?
Common levers include matching rates to soil tests and yield potential, timing applications to crop demand, addressing soil constraints and tracking results paddock by paddock.
References
- Department of Agriculture, Fisheries and Forestry (DAFF) (2026) Agriculture production to ease slightly. Media release, 1 September. Available at: https://www.agriculture.gov.au/about/news/ag-production-to-ease-slightly (Accessed: 20 October 2026).
- Marshall, A. (2026) 'Surprise El Nino year rain helps farmers weather $734,000 input cost storm', Farm Weekly, 1 September. Available at: https://www.farmweekly.com.au/story/9341090/despite-the-odds-abares-tips-big-harvest-but-farm-profits-dive-39pc/ (Accessed: 20 October 2026).