Farmgate prices hit three-year high

UK farm output prices for the three months to April were at their highest level for three years, according to Defra’s Agricultural Price Index (API).

However, total input costs in the same period had also risen 5.7% above where they were 12 months ago.

Farmgate prices across all farming products increased by 12.6% on the API compared to April 2016.

See also: How arable farmers can break the high cost, low yield cycle

There were huge gains for wheat (+30%), oats (+30.4%) oilseed rape (+31.6%), pigs (+37.7%) and milk which jumped by 24.9%.

Inputs have been largely hit by high feed costs, the low value of the pound since the EU referendum last June as well as petrol prices creeping back up in recent months.

On the whole cereal prices were strong and, despite nudging just 0.4% upwards between March and April, the index was 28% higher compared with 12 months ago.  

Oilseed rape prices have been buoyant, almost a third higher than the year before due to low yields and a lower-than-usual planted area. 

The substantial rise in the pig index value has been driven by tight supplies combined with strong global demand for British pork.

The only outputs that saw modest drops across the year were sugar beet (-6.0%), Sheep and Lambs (-2.0%) and fresh vegetables which edged downwards by (-1.8%) – however none fell on the previous month.

Limited free-buy demand and a low export trade saw potato prices fall on the month, having increased by 16% between March and April the year before. 

Animal feed (+10.1%) fertiliser (+16.6%) and energy and lubricants (+10.7%) all saw double digit API increases, offsetting the gains made to farmgate prices.

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