The government’s latest price index for the agricultural sector shows that farm input costs rose a record 33.1% in the year to June 2022, as rising energy prices set costs soaring. The agricultural output value of oats soared by 88%, wheat 54%, rapeseed by 66% and milk by 41% in the year to June.
Fertiliser costs were already the biggest contributor to rocketing farm input prices, before the closure of ammonia production by CF Fertilisers raised fresh worries about rising costs and potential livestock culls.
Commenting on the evolving crisis, Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown: ‘’Costs for UK farmers keep surpassing record levels, sowing the seeds for more painful price rises for shoppers who are already struggling amid the painful cost-of-living crisis. Agriculture input prices rose 33.1% between June 2021 and June this year, with a big jump in April and steady increases in May and June. Fertiliser prices have hurtled upwards and were the biggest contributor to the alarming jump in farmers’ costs, even before the latest supply crunch concerns.
“Although the rise in farmers input costs have been slowing down a little, they are still on an upwards trajectory and this latest fertiliser production crisis will add fresh impetus to the storm they are facing.”
See the next issue of CIR Magazine for more on evolving agri risks.
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