Survey shows steady farm production costs
Costs of production remained steady overall during the past six months, but cereals, OSR and dairy experienced slight increases in costs.
Results from the Anglia Farmers Agricultural Inflation Index for August 2013 to January 2014 puts the latest AgInflation figure at just 0.08%.
See also: market prices and trends
This represents the inflation in production costs across all agricultural sectors. The latest figure indicates a minimal overall change in production costs over the period, particularly compared with 3.31% in the first half of 2013.
Costs of seed and machinery decreased the most by 3.5% and 2.5% respectively, while the cost of fertiliser and fuel both decreased by 2.3%.
However this was against a backdrop of large increases in costs since October 2006, including a rise of 104% in fertiliser costs.
| AgInflation by input | ||
| Input | Inflation of item group % | Index Oct 2006 = 100 |
| Seed | -3.5 | 160 |
| Fertiliser | -2.3 | 204 |
| Agrochemicals | 0.3 | 123 |
| Animal feed and medicine | -0.8 | 221 |
| Contract and hire | 4.0 | 129 |
| Machinery inc depreciation | -2.5 | 170 |
| Fuel | -2.3 | 199 |
| Labour | 4.1 | 125 |
| Rent, interest, property, office | 0.5 | 137 |
| Source: Anglia Farmers | ||
| Agricultural Inflation Index | |||
| | AgInflation % | RPI inflation % | RPI – sourced from Office of National Statistics |
| Overall agricultural inflation Aug 13-Jan 14 | -0.8 | 0.5 | |
| Cereals and OSR | 0.32 | 3.2 | Bread and margarine |
| Potatoes | -2.7 | -7.6 | Potatoes old white and loose new |
| Sugar beet | -0.6 | -6.5 | Granulated sugar |
| Dairy | 0.31 | 0.0 | Pasturised milk |
| Beef and lamb | 1.2 | 1.6 | Home mince & lamb |
| Source: Anglia Farmers | |||
Labour costs increased the most, by 4.1%, with contract and hire costs following closely behind with a rise of 4%.
Beef and lamb producers saw the biggest increase in costs out of all sectors, with figures rising by 1.2%, while potato growers saw the biggest fall in production costs of -2.73%.
The cost of producing cereals and OSR increased by 0.32%, but the price of bread and margarine increased by 3.2%.
Sugar beet production costs fell by just 0.06% while the price of granulated sugar on the shelf decreased by 6.52% in a year when farmers received the lowest ever price per ton in real terms.
The AgInflation index uses data from Anglia Farmers’ buying office, which sourced more than £250m of farm supplies a year. The index is weighted and covers nine cost centres and 132 agricultural items.