Farmers get some respite from rising input costs

The rising cost of farm inputs has slowed significantly over the past six months, according to the latest Anglia Farmers agricultural inflation index.


It put overall inflation between last August and the end of this month at 1.53%, which was well down on the 13% inflation experienced during the preceding 12-month period.

But while costs such as seed and fertiliser fell over the period, increases in land rents, labour costs, fuel and animal feed kept the inflation figure positive and means the cost of production for arable, dairy and livestock farmers is still rising.

Combinable crop production costs increased by 1.88% in the six-month period, while dairy costs were up 2.15% and beef and lamb up 2.37%.

A comparison of the figures against the UK Retail Prices Index also showed farmers’ costs had risen by twice as much as consumer inflation. Since the agflation index started from a base of 100 in 2006, the RPI index had risen to 133, while the agflation index was at 163.

The dairy sector been hit particularly hard as there had been no increase in the RPI for milk over the past six months, but costs had continued to rise. Dairy production costs were up 65% in the last five years, and this had not been reflected by wholesale prices, Anglia Farmers said.

Futures contracts: farmer views wanted

Do you use futures and options markets to help you manage risk? Or are you interested to learn more? Farmers Weekly is keen to find out the extent to which UK farmers use these markets. Complete our survey here.

Take the survey

Futures markets and commodity risk management online course:

  • Risk management strategies for a more predictable financial performance
  • Educated conversations when collaborating with your advisors
  • Negotiate better prices with your grain merchants

View course
See more