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UK: Index records second highest ever rate of inflation

12 November 2021

Cost of farming inputs increased 21.79% between 1 September 2020 to 30 September 2021

The UK's AF Group published its latest Aginflation Index, revealing that the cost of farming inputs has increased 21.79%. The index reflects data collected between 1 September 2020 to 30 September 2021.

Fuel and fertiliser saw extraordinary increases of 79.9% and 51.2% respectively. No farm operation has been able to avoid double-digit inflation, AF reports. Over the same period, the total food Retail Price index experienced deflation of -0.58%. 

Inflation in the UK's agricultural sector continues to rise. Since the end of the reporting period, fertiliser prices rose a further 50%. 

The report suggests that farmers continue to review expenditure and procurement partners.

"Data like this is incredibly important for us to run our farm effectively and will only grow in importance as the industry changes," said AF Member Tony Bambridge of B & C Farming Limited. "The need to track our costs is paramount to the health of our business and it is vital our customers understand the inflationary pressures we are facing."

"Farmers need to be rewarded properly for their role in the supply-chain and the real benefit of the AF Aginflation Index is its integrity and independence, meaning farmers and the wider food supply industry can rely on this independent data to illustrate the true cost of inflation," he continued.

One of the driving forces behind inflation is the rising cost of fuel, which has had a great impact on the price of fertiliser. 

“There's no single reason for the increase in natural gas prices," said Matt Kealey, Head of AF Crop Production. "It’s the result of a convergence of factors, nationally and globally."

Kealy pointed out that supply continues to struggle to keep pace with rising global demand.

"Stored gas levels are lower than normal in Europe because of last years cold winter and with the UK having comparatively fewer storage facilities, we are more exposed to price fluctuations," he said. "This has added to speculation that Russia, a major gas supplier, is withholding output for political reasons which, in turn, is fuelling price rises."

"We are continuing to liaise with our suppliers and update Members on both spot and future prices," he concluded.



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