There was a nine per cent rise in profit among horticulture businesses last year despite rising input and labour costs, according to the annual Farm Business Survey.
Glasshouse and veg production was primarily responsible for the growth, while fruit and hardy nursery stock growers struggled, the report found. Overall, the horticulture sector accounted for 13 per cent of UK agriculture output in 2016.
Horticulture businesses generated a total revenue of £3.1 billion last year, a three per cent increase on the previous year, while incomes were nine per cent higher than the average farm.
Edible glasshouse producers were hit by rising costs, including a 31 per cent increase in labour costs, while seeds and young plants went up by an average of £11,000 per business.
In salad crops, although the cost of young seeds and plants increased, overall input costs were down on the year before. Salad growers also struggled with higher labour costs, which accounted for 26 per cent of total turnover.
Revenue dropped by 10 per cent for specialist fruit growers, and despite savings on packaging, marketing and labour costs, incomes fell back by eight per cent.
Orchard businesses suffered from falling farmgate prices, in particular those growing dessert apples, where prices fell by an average of 27 per cent.
Profits in outdoor veg rose by 27 per cent as prices picked up, with other inputs remaining stable.
The Farm Business Survey is carried out by Rural Business Research (RBR), by a group of researchers from the Universities of Cambridge, Newcastle-Upon-Tyne, Nottingham, Reading, Askham Bryan and Duchy College.
It represents 5.5 per cent of horticulture businesses in England and in 2015-16 included 193 businesses.