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Double-digit decline in farming costs and prices in January, says CSO

Often seen as a bellwether for food price inflation, the output price index was dragged lower by falling milk prices

Due to its energy-intensive nature, milk production was one of the areas of agricultural activity most affected by the increase in electricity prices

Colin Gleeson
Tue Mar 12 2024 - 15:38

Farming input and output prices fell sharply in January compared with the same month last year, new Central Statistics Office (CSO) data reveals, amid falling energy prices and costs associated with the disruption arising from the war in Ukraine.

The CSO’s agricultural input and output price indices, which monitor trends in prices paid to farmers for their produce and in prices paid by farmers for purchases of goods and services, fell by 15.9 per cent and 13.8 per cent respectively in the 12 months to the end of January.

Often seen as a bellwether for food price inflation, the output price index was dragged lower by falling milk prices, which declined 30.3 per cent over the 12-month period.

Due to its energy-intensive nature, milk production was one of the areas of agricultural activity most affected by the increase in electricity prices that followed the Russian invasion of Ukraine in late February 2022.

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There were also significant falls in output prices for cereals (-31.6 per cent) and poultry (-5.5 per cent).

Meanwhile, potato prices rose 75.5 per cent, largely due to drought conditions in Europe in the summer of 2022 that caused shortages as well as bad weather domestically, which delayed planting. An increase of 13.1 per cent was recorded for vegetables.

Looking at input prices, there was some relief for farmers from the sharp spike in fertiliser prices that followed the Russian invasion of Ukraine, a major supplier to the global market.

Fertiliser prices in the Republic fell by 46.7 per cent while feed prices also declined by 14.6 per cent with costs expected to fall further this year as energy prices soften. The price of energy came down 6.8 per cent over the year.

The annual terms of trade, which is a measure of a country’s export prices relative to its import prices, was up by 2.5 per cent compared with January 2023.

On a monthly basis, the agricultural output price index for January 2024 rose by 2.7 per cent compared with December 2023. The agricultural input price index for January 2024 remained unchanged compared with December.

The monthly terms of trade increased by 2.7 per cent in January compared with the previous month.

The most significant monthly changes in the output price subindices were in the price of milk, which rose by 4.9 per cent in line with cattle prices that went up by 4.8 per cent.

In general, the monthly input price subindices exhibit little change, but there was a drop of 4.8 per cent in PK fertiliser prices.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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