New figures reveal extent of farmgate price squeeze

Defra’s Agricultural Price Index, which tracks and weights prices paid and received by farmers, shows output prices plummeted nearly 12% in the year to March 2015.

Almost every farming sector suffered farmgate price drops across the year, according to the index which takes 2010 as its base. 

Read more on input prices

This was slightly offset by a 5% fall in the cost of inputs, helped by the world oil price, which plummeted last year, reaching a low of below US$50 (about £30) a barrel in January 2015. 

Oil prices have since started to pick up and motor fuel prices were 4.1% higher in March compared with the month before – the first increase since July. 

Dairy farmers suffered the biggest fall in output prices, with a drop of almost 26% compared with March 2014. Defra’s farmgate milk price (an average across all contract types) stood at 24.99p/litre in March 2015 compared with 33.71p/litre for the same month last year. 

Potato growers, as expected, suffered a 19% fall in output prices compared with the year before. Latest figures from the Potato Council put the GB free-buy average at £97.65/t in the week to 15 May – whereas the same week last year was £136.62/t. 

Index of agricultural inputs and outputs, Defra
(2010 = 100)

  March 2015 One-month change 12-month change
All outputs 107.4 -2.4% -11.8%
Wheat 111.2 +0.7% -17.6%
Barley 117.4 -0.3% -12.9%
Potatoes 93.9 +2.5% -19.2% 
OSR 95.6 -0.2% -14.8% 
Sugar beet 105.7 0% -1% 
Fresh veg 95.5 +5.4% -7.1%
Fresh fruit 104.5 +0.7% -11.9%
Cattle/calves 128.7 -1.3% +1.2%
Pigs 93.0 -1.6% -18.9%
Sheep and lambs 117.8 +4.6% -0.5%
All poultry 102.5 -4.5% -2.6%
Milk 101.3 -8.1% -25.9%
Eggs 120.8 0% -4.4%

Index of agricultural inputs, Defra
(2010 = 100)

  March 2015

One-month change 

12-month change
All inputs 109.5 -0.6% -4.9%
Seeds 93.3 -0.2% -10.2%
Energy and lubricants 105.5 -7.1% -13.6%
Fertlisers and soil improvers 108.1 -1.5% -1.8%
Plant protection products 106.1 0% +0.5%
Vet services 108.6 +1% +1.9%
Straights feedstuffs 112.4 -0.1% -15.5%
Compounds feedstuffs 113.5 0% -9.9%

The Agricultural Price Index (API) measures the monthly price changes in agricultural outputs and inputs for the UK.

Defra collect prices from a wide variety sources to produce the monthly API. This includes data from its own surveys, information from the AHDB, and the ONS. 

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