Monday, September 28, 2020

Agricultural inflation rises by 2%

February 25, 2010 by  
Filed under News & Business

INPUT prices are rising after a short period of deflation, reveal the latest farm inflation figures.

Overall, input prices increased by 2% during the last six months, according to the Anglia Farmers Agricultural Inflation Index.

The main reason for the increase is the cost of fertiliser which is being inflated by world demand.

While the half-year increase might seem marginal, farming costs have risen by more than 28% since the index was launched in October 2006.

The latest results were announced at the Norfolk Farming Conference in Norwich on Thursday (25 February).

Anglia Farmers chief executive Clarke Willis said: “The fertiliser market is volatile and will have a significant effect on overall costs whatever the arable enterprise.

“We have seen a rise in cost for each with the exception of sugar beet which has remained more or less static.”

At just over 3%, the increase in potato production is clawing back on savings made in the previous year.

The rise in animal costs – dairy at nearly 4% and beef and lamb at 3% – has been led by increased protein and labour costs.

While the cost of energy is likely to fall for livestock farms, this will be counteracted to some extent by changes in the cost of protein oils and other ingredients.

But Mr Willis said the overall inflation of 34% for dairy was taking its toll and destroying the balance sheets of many herds throughout the country.

“Where arable input costs are heading depends on fertiliser factors outside our borders, world demand and the exchange rate will be key.

“Volatility in the fuel market seems inevitable too and chemical pricing for this year has not been settled.

“Added to this, with an election on the way and problems in the economy, interest rates are firmly in the ‘unknown’ camp.”

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