Farming costs continue to surge with knock-on effects for food prices

Farm input and output prices — key drivers of food price inflation — both surged in the year to July, according to the Central Statistics Office (CSO).

The indices monitor trends in prices paid to farmers for their produce and in prices paid by farmers for purchases of goods and services. Both sets of figures feed into the wider picture of rapidly increasing prices across the economy.

The data shows the agricultural input price index was up by 39.1 per cent in the year from July 2021, while the agricultural output price index was up by 28.4 per cent over the same period.

The increases in both indices led to a 7.7 per cent fall in agricultural trade compared with the same month a year earlier.

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Input price increases can be seen most dramatically in fertiliser prices — key for food production — which were up 133.8 per cent, energy prices which rose by 51.3 per cent, and in feed prices which were up 34.2 per cent in the past 12 months.

Increases can also be seen in the output price sub-indices where the price of milk has risen by 51.1 per cent in the year, while cattle prices have increased by 16 per cent annually.

On a monthly basis, the agricultural input price index showed no change when compared with June. The agricultural output price index was down 1.6 per cent in the same time period. Monthly trade was down 1.6 per cent.

A more detailed look at the monthly output sub-indices shows a 6.9 per cent decrease in cattle prices but a 3.7 per cent increase in milk prices.

Furthermore, the monthly input sub-indices saw a 2.2 per cent growth in feed prices, but a 2.7 per cent reduction in the price of fertilisers, as well as a 2.8 per cent reduction in energy prices.

Anthony Dawson, statistician in the CSO prices division, said: “The most notable change is in the price of feeding stuffs, where the price index has increased by 2.2 per cent since June 2022 and by 34.2 per cent in the year from July 2021.

“More generally, the monthly agricultural output price index is down 1.6 per cent while the input price index is unchanged in the month from June 2022 to July 2022. As a result, the terms of trade for July 2022 was down by 1.6 per cent.”