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UK Farming Statistics

15 February 2013

UK December Agricultural Price Index - 14 February 2013UK December Agricultural Price Index - 14 February 2013

The December price index for all agricultural outputs fell by 0.4% on November, but is 11.8% higher than the same time last year. The index for all agricultural inputs rose by 3.2% on the month and is 5.4% up on December 2012.
UK Farming Statistics

Key points

The poor harvest in 2012 continues to keep crop prices high. The main changes in output prices are:

  • the price of main crop potatoes is almost double that in December 2011 following low output and poor quality from the 2012 crop;
  • cereal prices have increased 10% from November and 38% on the year;
  • dessert apple prices have increased by 9% on November and 25% on the year;
  • sheep prices have fallen 28% on December 2011 due to increased volumes from cheaper imported sheep meat.

Detailed results

Prices of outputs rose throughout most of 2012, due mainly to the poor weather, and are now 11.8% above their December 2011 level (see Figure 1). The prices of inputs rose from the second half of the year and in December 2012 were 5.4% above those a year earlier.

Figure 1: Agricultural price indices (2005=100)

The poor harvest in 2012 continues to keep crop prices high. In particular, the low output and poor quality of the potato crop led to the December 2012 price being almost double that of a year earlier. Cereal prices are also 10% up on the month and 38% on the year. Poor weather conditions have reduced supplies of fresh fruit and vegetables, fresh vegetables are 2.8% up the month and 40% on the year. While fresh fruit are 9% up on the month, and 39% up on the year.

Unlike previous years there has not been an increase in sheep prices this December. Instead there was a 1.0% fall in prices compared to November. The price is now 28% lower than last year - see Figure 2. Sheep and lamb prices have been driven down by increased volumes of cheaper imported sheep meat, primarily from New Zealand.

Egg prices are 29% higher than this time last year following a 2.6% increase in the price of eggs for this quarter. Prices have risen due to a reduction in the size of the laying flock and the following short supply of eggs.

In December, animals and animal products have a greater influence on the agricultural outputs as sales of crops, in particular cereals, fell from their autumn high. This explains why overall agricultural outputs and crop outputs fell in December when compared to November.

The changes in input prices have been lower, with the exception of straight animal feeding stuffs. The prices of these animal feeds are driven by cereal prices so it is of no surprise to see them increase by 8% on November. They also rose by 35% on December 2011 on the back of increases in both cereal and soya bean prices.

Figure 2: Sheep and lamb price series (2005=100)

2012 annual prices

Tables 3 and 4 show the annual price index for agricultural outputs and inputs. The annual price index for all outputs in 2012 is up 5.0% compared to 2011. The largest increase in annual prices was in eggs which saw a 26% increase from 2011, which was driven by a 33% increase in the price of intensive eggs, due to a reduction in laying flock numbers and the subsequent short supply of eggs.

The poor 2012 harvest have seen the annual price for potatoes and dessert apples increase by 15% and 14% respectively compared to 2011. Perhaps surprisingly the annual cereal price is only 3% higher than the 2011 price. There was a noticeable fall of 6% in sheep and lamb prices following the strong prices in 2011.

The annual price for inputs rose by 1.4% compared to 2011. There was a 3.8% increase in animal feeding stuffs. Straight feeding stuffs increased by 5.2% driven by higher soya bean meal prices. The annual price for fertiliser fell by 3.9% in 2012 with straight fertilisers falling by 7%.

Data uses

The agricultural price index is used by farmers to help set their output prices and monitor the prices they are paying for inputs. The data is also used by analysts in Government, industry and academia to assess the impact that changing prices may have on the industry and consumers.

Data from the API is used by the Office of National Statistics (ONS) in the production of the Producer Price Index (PPI) which is one of the key measures of inflation.

February 2013

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