Potato seed crate with "seed" stamped on it© Tim Scrivener

Arable input costs fell slightly in the year to September 2016, while the livestock sector saw a small rise.

The latest AF AgInflation Index from buying group Anglia Farmers reflects changes in the main direct variable- and fixed-cost inputs used by farmers.

The overall cost of agricultural production inputs fell by 1.14% in the year from September 2015 to September 2016.

See also: Know your grain contract rights and responsibilities

Within specialist sectors, input cost inflation ranged from a drop of 1.85% for potatoes to -1.55% for cereals and oilseed rape and -0.515% for sugar beet.

Dairy inputs costs rose 0.53%, with beef and lamb producers seeing a similar rise. The AF figures compare with a Retail Price Index drop of 2.6% over the same period.

Ag inflation by input class

September 2015-September 2016

Inflation within item group

Weighted contribution to overall inflation

Index Oct 06=100

Seed

2.7%

0.13%

159

Fertiliser

-18.0%

-1.98%

196

Chemicals

-3.2%

-0.32%

122

Animal feed and medicine

2.0%

0.20%

218

Contract and hire

-1.2%

-0.13%

129

Machinery (incl. depreciation)

0.3%

0.04%

170

Fuel

1.5%

0.15%

194

Labour – regular and casual

5.9%

0.65%

126

Rent, interest, property, office

0.7%

0.12%

138

Ag Inflation

 

-1.14%

 

Fertiliser reductions

Fertiliser prices saw the biggest fall, down 18%, reflecting the big drop in nitrogen prices early this summer. Prices for agrochemicals supplied through AF over the period fell by 3.2%.

There were increases in fuel, labour, seed, feed and medicines costs.

The reduction in fertiliser costs were attributable to lower raw material prices coupled with the lowest shipping rates in 35 years, said AF Group chief executive Clarke Willis.

“Fuel has seen a changing market throughout the past 12 months, with the best prices in February. The effect of Brexit has resulted in a weaker pound, which has therefore pushed up costs to an average 1.5% inflation,” said Mr Willis.

“Beef and lamb producers continue to feel the pressure as their production costs have increased compared with a reduction in the cost of mince and lamb.”