The cost of agricultural inputs has risen by more than 7% in the past year, according to agricultural buying group Anglia Farmers.

The dairy sector was worst hit, facing an average 9% rise in input costs.

Potato production followed closely, with an 8.56% inflation of input costs.

The figures were calculated by Anglia Farmers’ new Ag Inflation Index, which looked at the costs of 75 products across the 12 months to September 2007.

Inflation

Jim Alston, Anglia Farmers director, said with input costs showing significant rises across the year, it was important farmers understood the inflationary pressures on their businesses.

“The value of some ex-farm products has risen dramatically, but with no guarantee it will last,” he said.

“Meanwhile, some costs have risen just as dramatically, and there’s every reason to believe those rises will stick.”

The Ag Inflation Index revealed animal costs had risen by 13.5% on the year, while fertiliser input costs had increased by 13.2%.

Rent and fuel

Rent, rates and property showed the next biggest jump, with an 8% increase.

Surprisingly, fuel showed a 1.8% drop in input costs.

“We have double checked those figures and they are accurate,” Mr Alston said. “If you take the inflation price in September 2006 and compare it with the same month in 2007, there is actually a drop in price.

“It’s very deceiving, but the latest rise has been short-term. For a time last year the price shot up, but then it remained static.

“That figure will change over the coming months, but not as much as people think – perhaps by about 10%.”

Dairy increases

Mr Alston said the diary sector had seen the largest jump in input costs because everything included in the dairy index, particularly electricity, property prices and chemicals, had increased.

“The rises in fixed costs will start to show when we publish the next set of figures in March and will be revealed properly by next September.

“The figures aren’t intended to make people change their actions, because the figures are historic.

“However, they are verifiable costs that farmers can use when they are dealing with buyers and trying to negotiate better prices.”