While some are enjoying negative inflation in the costs of their inputs, dairy (-4.84%), potatoes (-3.71%) and beef and lamb (-2.68%) others are seeing the opposite.

Sugar beet production costs are up again by 4.75% as are inputs for cereals and oilseed rape, but only by 0.56%.

Mind the gap between costs to consumers and to producers

Over the same six-month period the total food Retail Price Index has risen by 14.3%.

This average increase in prices for a basket of key foodstuffs is derived from greatly different values for particular household food essentials. Milk shows the biggest price increase (44%), with bread and margarine next (27%) followed by beef and lamb meat (16.3%), potatoes (12.2%) and sugar (7%).

Whilst food inflation continues to follow the sharp upward trajectory of recent Aginflation, it is still not at a rate to supply prices to farmers that cover their increased costs.

Use the tool for business planning

The AF Aginflation Index is respected as a useful tool for businesses to continually review their expenditure and procurement partners.

“History shows that some commodity prices can fall sharply after above average rises.  However not all prices have relaxed. What I hear and see is farmers keeping closer eye than ever on costs and the ways they can reduce expenditure where they can. 

The reality of living with high levels of Aginflation for three years has prompted many changes on farm.”

AF Head of Member Services Louis Clabburn

Choices to make to keep crop protection costs under control

“Supply chain volatility and uncertainty in crop protection products are a big a threat to Members as well as price inflation, this Spring especially.

AF crop input expertise and experience challenges the norm. We advise not just what to buy from a full product portfolio for financial and environmental efficiency but when for the best point of value. This value is not only the price, but also availability of the product.”

AF Crop Protection Procurement Manager Lee Oxborough

Make your move when price is right

“Last year we saw significant increases in feed prices. Already this year we have seen substantial reductions in feed cereals. However, proteins such as soya remain expensive. This all means that compound and blended feed prices haven’t fallen as much as wheat markets may suggest. Straights-buying livestock farmers may well want to consider booking their wheat now while waiting and hoping for proteins to fall.

Within machinery procurement we have seen some significant downward trends. Many manufacturers have slashed prices dramatically as parts become more readily available and to stimulate spend with customers: a trend I expect to continue as supply constraints ease and competition increases.”

AF Head of Livestock Inputs and General Kristian Dunham

Monitoring Aginflation helps farming business

“The dip in Aginflation is very good news but it’s too variable across different types of farm business to give much cause for relief.  The gap between the cost of production and the value of sales is still too wide and too variable to be sustainable.  The significant drop in fertiliser prices is, of course, welcome but many farmers bought their fertiliser when prices were still sky high and now output values are falling, so this could be a very difficult harvest for farmers.

It’s alarming that crop protection prices are continuing to rise, and we are encouraging our Members to look beyond brand names and focus on active ingredients. We’ve been tracking Aginflation for 16 years and we’ve seen this lag before.  If previous patterns continue, we should see these prices begin to ease next year as the reduced cost of production begins to impact.”

                                                                                                AF Chief Executive David Horton-Fawkes