Eastern farmers cooperative Anglia Farmers has revealed that, for farmers in its region, the pressure posed by input costs, the rise of which has caused alarm throughout the European industry, even sparking a report from the European Parliament, has eased over the past six months.

The latest results from the cooperative’s Agricultural Inflation Index show farm input costs are slowing down, which will be of some reassurance. Farmers in the dairy, pork and poultry sector had been concerned by Defra figures earlier in the year which suggested rising input costs would cut into their margins.

The results, which will be formally unveiled at Norfolk Farming Conference on Thursday (23rd February), suggest a 1.53 per cent rise in agricultural inflation over the past six months, compared to a high level of 13 per cent in the preceding 12 month period.

Anglia Farmers said this represents “A period of overall stability within which there is some variation.” The main driver that has kept the inflation figure positive since August 2011 is fixed costs influenced largely by land rents and labour. Fuel and animal feed have shown rises over the last 6 months.”

A sector-based analysis shows that the cost of producing combinable crops has risen by 1.88 per cent over the peri, sugar beet production costs have increased 1.22 per cent, and potatoes have increased 1.12 per cent. In the livestock sector, the price rises are more marked; dairy increased 2.15 per cent and beef and lamb production costs rose 2.37 per cent. A comparison with the UK Retail Price Index (RPI) shows farmers’ costs have increased twice as much as the RPI.

The Index also showed the changes in retail prices for different products. Whilst Beef and lamb products have risen by 6.8 per cent in the shops, potato prices have dropped off by a similar amount. Anglia Farmers said that, worryingly, the retail price of milk has remained static although production costs for dairy farmers have risen by 65 per cent in the last five years, which has not been reflected in the wholesale price.

Clarke Willis, Anglia Farmers’ group chief executive, said, “Overall agricultural inflation of 1.53 per cent is a welcome relief to some massive increases over the last few years especially in fertiliser, fuel and animal feed. As ever, our ability to buy inputs and a whole range of goods and services on behalf of our members as competitively as possible continues to be an absolute necessity for them to remain profitable. The input supply chain within the agricultural supply industry needs to be constantly challenged to contain costs.”

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