Farm input costs have soared by 30% in the past year, according to stark statistics due to be released next week, Farmers Weekly can reveal.
The latest Agricultural Inflation Index will show dramatic price increases for major inputs including fuel, fertiliser and feed, as well as seed and machinery.
The figures are prepared every six months by the eastern counties farmer-owned buying group Anglia Farmers.
Director and Norfolk farmer Jim Alston said costs had soared since the group released its last six-monthly ag-inflation figure of 16.65% at the end of March.
“The full year’s figures are just about complete and if you double the six-month figure you come close to what the full year will look like,” he added.
“Six months ago it was felt that farm input prices were reaching a peak.
“Unfortunately, this has been far from the case and the rate of increase has been maintained in the second half of the year.”
The detailed ag-inflation statistics will fuel concern that rising food prices are being outstripped by increases in production costs.
Spiralling food prices have propelled annual inflation to its highest level for more than a decade.
Annual food inflation under the consumer prices index (CPI) soared to a record 13.7% last month, up from 10.6% in June, according to the Office for National Statistics.
Main contributors were higher meat prices – particularly bacon, ham and poultry – as well as the cost of bread, cereals and vegetables, including potatoes.
Overall inflation now stands at 4.4%, up from 3.8% in June.
The 0.6% leap is the biggest since records began in 1997. Annual inflation is now twice the government’s target of 2.2%, dashing hopes of an early cut in interest rates.
The Bank of England expects inflation to peak at 5% this autumn at a time when lending to agriculture is at an all-time high of £10.6bn – 9.1% higher than a year ago.