Fertiliser prices grow UK farming costs 4.5%
This was driven by a 16.9% rise in fertiliser costs, 6.5% in fuel, and 4.8% in animal feed. It is the second report in a row to record an inflation increase of more than 4.5%.
All product areas saw price increases, with cereal and oilseed rape operations hit by 5.75% inflation. With the retail price index at 2% in the same period, the latest Index once again shows farm costs rising faster than those of the consumer.
This is the second successive AgInflation Index that has seen the costs of fertiliser grow. There was an 8.9% increase in the year to September 2017, with the price of phosphate and potash influencing a 16.9% rise this time around.
The weakness of sterling against the dollar and unrelenting US shale oil production has seen a 6.5% rise in the cost of fuel – and the market is expected to remain volatile throughout 2018.
The 4.8% rise in the cost of animal feed was driven by adverse weather in South America, the closure of a major animal feed production facility in the UK, and a fire at a Citral plant in Germany that took out 40% of the EU’s capacity to manufacture Vitamins A and E. ■