Chapter 6: Prices
Updated 22 July 2024
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Summary
- The annual average price index for all agricultural outputs increased by 1.4% from 2022 to 2023.
- The largest upward contribution to the annual inflation rate for agricultural outputs was from poultry (1.8 percentage points), followed by potatoes (1.4 percentage points) and pigs (1.2 percentage points). The main downward contribution came from cereals (-3.1 percentage points).
- The annual average price index for all agricultural inputs decreased by 5.0% from 2022 to 2023.
- The largest downward contribution to the annual inflation rate for agricultural inputs was from fertilisers and soil improvers (-5.3 percentage points), followed by straight feedingstuffs (-0.9 percentage points) and compound feedingstuffs (-0.5 percentage points). The main upward contribution came from other goods and services (0.8 percentage points).
Data sources
The Agricultural Price Index (API) measures the monthly price changes in agricultural outputs and inputs for the UK.
Outputs:
- The output series reflects farm-gate prices, which are the prices farmers receive for their products.
- Information is collected for all major crop categories (e.g., cereals, fruits, vegetables) and livestock/animal products (e.g., sheep, milk, eggs).
Note: The price index for poultry is based on deadweight prices reported by processors. These prices are not directly comparable with poultry prices referenced in Chapter 8 which estimate the cost to producers.
Inputs:
- The input series reflects the prices farmers pay for various goods and services.
It is further divided into two categories:
- Goods and services currently consumed: These are items used up during production, such as fertiliser or seeds.
- Goods and services contributing to investment: These are items necessary for production but not consumed directly, such as tractors or farm buildings.
Trends in annual price indices
Figure 6.1: Annual average price indices for agricultural outputs and inputs from 2014 to 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
| Year | All agricultural outputs | All agricultural inputs |
|---|---|---|
| 2014 | 95.3 | 94.3 |
| 2015 | 86.5 | 89.6 |
| 2016 | 85.5 | 87.5 |
| 2017 | 93.8 | 92.8 |
| 2018 | 97.4 | 100.1 |
| 2019 | 96.5 | 101.8 |
| 2020 | 100.0 | 100.0 |
| 2021 | 109.9 | 111.4 |
| 2022 | 130.6 | 143.2 |
| 2023 | 132.4 | 136.1 |
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Figure 6.1 shows the annual average price indices for agricultural outputs and inputs since 2014. Compared with 2022, the annual average price index for 2023 is 1.4% higher for agricultural outputs and 5.0% lower for agricultural inputs.
Over the last decade, the year in which the index for agricultural outputs exceeded that for inputs by the largest amount (+1.0 percentage points) was 2014. 2022 saw the index for agricultural inputs outstrip outputs by the largest amount (+12.6 percentage points).
Contributions to change in the annual agricultural outputs and inputs inflation rate
Figure 6.2: Contributions to change in the agricultural outputs annual inflation rate between 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
| Category | Contribution (percentage points) |
|---|---|
| Poultry | 1.75 |
| Potatoes | 1.38 |
| Pigs | 1.21 |
| Fresh vegetables | 1.19 |
| Cattle and calves | 1.12 |
| Eggs | 1.06 |
| Fresh fruit | 0.47 |
| Sheep and lambs | 0.06 |
| Oats | -0.04 |
| Barley | -1.08 |
| Oilseed rape | -1.22 |
| Wheat | -2.02 |
| Milk | -2.45 |
| Cereals | -3.14 |
Notes:
- Not all agricultural output categories are shown in Figure 6.2. Therefore, the sum of the contributions in Figure 6.2 may be slightly less than the annual inflation rate.
- The price index for poultry is based on deadweight prices reported by processors. These prices are not directly comparable with poultry prices referenced in Chapter 8 which estimate the cost to producers.
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Figure 6.2 shows the contributions to the 1.4% change in the agricultural outputs inflation rate between 2022 and 2023.
Eight of the fourteen output categories saw price increases. Poultry experienced the strongest rise, driven by a combination of rising feed, energy, and labour costs, and avian influenza outbreaks that impacted farm profitability.
After historically high milk farm-gate prices at the end of 2022 and start of 2023, prices decreased in 2023 as a result of weaker demand and increased production at the start of the year. Cereal prices also decreased after record highs in 2022 due to lower quality UK harvests and reduced demand for animal feed.
Figure 6.3: Contributions to change in the agricultural inputs annual inflation rate between 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
| Category | Contribution (percentage points) |
|---|---|
| Other goods and services | 0.77 |
| Plant protection products | 0.57 |
| Maintenance of materials | 0.36 |
| Materials | 0.27 |
| Buildings | 0.18 |
| Veterinary services | 0.06 |
| Maintenance of buildings | 0.04 |
| Seeds | -0.09 |
| Energy and fuel | -0.46 |
| Compound feedingstuffs | -0.49 |
| Straight feedingstuffs | -0.86 |
| Fertilisers and soil improvers | -5.29 |
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Figure 6.3 shows the positive and negative contributions to the 5.0% change in the agricultural inputs inflation rate between 2022 and 2023.
Prices for Other goods and services (miscellaneous crop/livestock costs, professional services, utilities etc.) increased in 2023 as a result of high inflation rates, supply chain issues and labour shortages.
Fertilisers and soil improvers saw the largest decrease, with prices dropping substantially compared to 2022. This decline can be attributed to a decrease in natural gas prices, which is a key input cost in fertiliser production.
Trends in agricultural outputs price indices through the year
Figure 6.4: Monthly cereals price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.4: Figure 6.4 is line chart showing the monthly price index for cereals in 2022 and 2023. The cereals price index increased substantially in the first half of 2022, peaking in June. General declines with some relatively minor fluctuations were observed in the second half of 2022. The price index in 2023 declined in the first six months, before increasing slowly from September.
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The annual price index for cereals decreased by 19% in 2023 compared with 2022.
In 2023, UK cereal prices were influenced by global uncertainties such as the Black Sea grain deal and weather conditions in key producing regions. The UK domestic market also had an impact, with grain quality and reduced demand from the animal feed also putting downward pressure on prices throughout the year. Globally, recessionary fears and expectations of large harvests in major producers like the US and Brazil also contributed to a general downward trend in cereal prices in the later months of 2023.
Figure 6.5: Monthly oilseed rape price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.5: Figure 6.5 is a line chart showing the monthly price index for oilseed rape in 2022 and 2023. In 2022 the oilseed rape price increased steadily until June, then decreased sharply for the remainder of the year. In 2023 the price index decreased until July, then remained stable for the rest of the year.
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The annual price index for oilseed rape decreased by 37% in 2023 compared with 2022.
In 2023, UK oilseed rape prices were primarily shaped by expectations of abundant global supplies, particularly from bumper soyabean harvests in South America. Despite a poor domestic oilseed rape harvest, the large global supplies of soyabeans exerted downward pressure on oilseed rape prices throughout the year.
Figure 6.6: Monthly cattle price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.6: Figure 6.6 is a line chart showing the monthly price index for cattle and calves in 2022 and 2023. The price index for cattle and calves steadily increased throughout 2022, with slight drops in May and October. The price index then continued to steadily increase into the first quarter of 2023, before declining between May and October. The price index began to rise in the last two months of 2023, following seasonal patterns.
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The annual price index for cattle increased by 8.7% in 2023 compared with 2022.
Deadweight cattle prices reached historical highs in 2023, due to a 2.5% decrease in home-killed beef production and stable consumer demand. This decrease in production was primarily driven by the lingering impacts of high input costs in 2022. Tighter supplies in the EU market further supported domestic prices.
Figure 6.7: Monthly sheep price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.7: Figure 6.7 is a line chart showing the price index for sheep and lambs for 2022 and 2023. The price index fluctuated in both years, with the highest values observed in the spring and early summer months, following seasonal patterns. The price index then steadily decreased in both years until the late autumn before increasing again in the winter months.
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The annual price index for sheep increased by 1.0% in 2023 compared with 2022.
Deadweight lamb prices increased in 2023 due to a tightening in supplies. Prices started the year below the five-year average due to low consumer demand. However, prices began to rise in the spring and remained above the five-year average for the remainder of the year. This increase can be attributed to decreases in imports and a 1.8% decrease in domestic production.
Figure 6.8: Monthly pigs price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.8: Figure 6.8 is a line chart showing the monthly price index for pigs for 2022 and 2023. The price index for pigs increased throughout the spring and summer of 2022 before stabilising for the last three months of the year. There was a much steadier increase in the price index for the first half of 2023 before a small steady decline in the last six months of the year.
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The annual price index for pigs increased by 23% in 2023 compared with 2022.
The increase in deadweight pig prices in 2023 was primarily driven by a 11% decrease in domestic home-killed production. A reduction in the 2022 breeding herd was a key driver for this large drop in production, on the back of historically high input costs. Negative margins in 2022 saw a number of producers leaving the industry. However, prices did begin to steadily fall after September following similar movements in the EU market.
Figure 6.9: Monthly milk price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.9: Figure 6.9 is a line chart showing the monthly price index for milk in 2022 and 2023. The price index increased rapidly for the majority of 2022 before beginning to stabilise in November and December 2022. From January 2023 the price rapidly declined until May 2023 after which it stabilised for the remainder of the year.
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The annual price index for milk decreased by 11% in 2023 compared with 2022.
Historically high farm-gate milk prices in late 2022 continued into the first few months of 2023, driving production at the start of the year and into the spring flush. This increase in supply, coupled with weak demand, put downward pressure on farm-gate milk prices for the remainder of the year.
Figure 6.10: Monthly egg price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.10: Figure 6.10 is a line graph showing the quarterly price index for eggs in 2022 and 2023. The price index for eggs increased rapidly throughout 2022, particularly in the last quarter. These increases continued in the first half of 2023 before stabilising for the remainder of the year.
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The annual price index for eggs increased by 35% in 2023 compared with 2022.
Farm-gate egg prices increased due to an 8.0% decrease in the production of eggs for human consumption. This decrease in production was due to the continuing impacts of high costs, in particular energy and feed, as well as avian influenza outbreaks at the start of the year.
Figure 6.11: Monthly potatoes price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.11: Figure 6.11 is a line chart showing the monthly price index for potatoes in 2022 and 2023. In 2022 the potato price generally decreased over the first half of the year, then increased in the second. In 2023 the price index increased until August, then declined until October before rising again.
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The annual price index for potatoes increased by 52% in 2023 compared with 2022.
Unfavourable weather conditions impacted potato availability and pricing throughout 2023. Heavy rainfall in April delayed planting, leading to lower yields. The primary harvesting period in August and September also experienced unusually high rainfall, resulting in flooding and potato rot. This reduced domestic supply and drove price increases.
Trends in agricultural inputs price indices through the year
Figure 6.12: Monthly fertilisers and soil improvers price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.12: Figure 6.12 is a line chart showing the monthly price index for fertilisers and soil improvers in 2022 and 2023. In 2022 the fertilisers and soil improvers price increased until September, then declined for the remainder of the year. In 2023 the price decreased steadily until July, then remained stable for the remainder of the year.
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The annual price index for fertilisers and soil improvers decreased by 36% in 2023 compared with 2022.
While farmers faced rising costs for various goods and services in 2023, fertiliser prices, particularly ammonium nitrate (AN), saw a substantial decrease in the first half of the year. This reduction was driven by falls in the price of natural gas, a key input in fertiliser production.
Figure 6.13: Monthly energy and fuel price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.13: Figure 6.13 is a line chart showing the monthly price index for energy and lubricants for 2022 and 2023. The price index for energy and lubricants increased rapidly for the first half of 2022 before stabilising with minor fluctuations for the rest of the year. The price index steadily decreased for the first half of 2023, before slightly increasing between June and September 2023. The last three months of 2023 saw a steady decline.
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The annual price index for energy and fuel decreased by 4.8% in 2023 compared with 2022.
UK businesses battled a volatile energy market in 2023. While a welcome decline in wholesale electricity prices occurred compared to 2022, these prices remained high throughout the year when measured against historical averages, indicating an ongoing impact of broader global energy cost increases. This, combined with persistently high natural gas prices, led to a substantial rise in energy bills in 2023.
Figure 6.14: Monthly animal feedingstuffs price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.14: Figure 6.14 is a line chart showing the monthly price index for animal feedingstuffs in 2022 and 2023. In 2022, the animal feedingstuffs price increased sharply until April, with much slower growth and some fluctuations over the remainder of the year. In 2023 the price decreased steadily during the year.
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The annual price index for animal feedingstuffs decreased by 4.3% in 2023 compared with 2022.
Falling grain prices coupled with low demand drove a decrease in domestic animal feed prices in 2023. Decreased livestock populations in 2023, particularly in the poultry and pig sectors, meant lower demand for animal feed. Mild weather conditions in the latter half of the year meant that animals were kept out for longer and reduced the demand for supplementary feed.
Figure 6.15: Monthly plant protection products price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.15: Figure 6.15 is a line chart showing the monthly price index for plant protection products for 2022 and 2023. The price index for maintenance of buildings was steady for the majority of 2022 before a large fluctuation in November 2022. The price index increased in January 2023, and except for a minor fluctuation in August 2023, remained stable for the rest of the year.
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The annual price index for plant protection products increased by 13% in 2023 compared with 2022.
This increase was driven by ongoing challenges as a result of the COVID-19 pandemic, which continued to disrupt production and supply chains. Labour shortages, shipping delays, and a general rise in demand for plant protection products were all contributing factors.
Figure 6.16: Monthly maintenance of materials price index 2022 and 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
Text description for Figure 6.16: Figure 6.16 is a line chart showing the monthly price index for maintenance of materials for 2022 and 2023. The price index for maintenance of materials increased steadily throughout both 2022 and 2023, although 2023 saw more minor price fluctuations month to month.
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The annual price index for maintenance of materials increased by 7.2% in 2023 compared with 2022.
Repair costs for farm equipment, buildings and commercial vehicles rose by 20-25% on average, driven by fluctuations in the price and availability of materials. A general appreciation in equipment values further contributed to the rise in maintenance costs, with farm machinery such as tractors increasing in value by 30-40% in 2023.
Summary table of price indices
Table 6.1: Annual average price indices for agricultural outputs 2022 to 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
| Category | 2022 | 2023 | Annual inflation rate (%) |
|---|---|---|---|
| Cereals | 168.3 | 135.7 | -19.4 |
| Wheat | 161.6 | 131.1 | -18.8 |
| Barley | 185.7 | 144.8 | -22.1 |
| Oats | 164.0 | 153.8 | -6.2 |
| Oilseed rape | 186.9 | 118.1 | -36.8 |
| Sugar beet | 131.4 | 131.4 | 0.0 |
| Forage plants | 78.4 | 78.4 | 0.1 |
| Fresh vegetables | 118.1 | 143.1 | 21.1 |
| Plants and flowers | 110.5 | 110.5 | 0.0 |
| Potatoes | 107.7 | 163.8 | 52.1 |
| Fresh fruit | 94.0 | 108.9 | 15.8 |
| Cattle and calves | 126.3 | 137.3 | 8.7 |
| Pigs | 110.5 | 136.0 | 23.0 |
| Sheep and lambs | 120.9 | 122.1 | 1.0 |
| Poultry | 103.5 | 121.7 | 17.6 |
| Milk | 154.1 | 138.0 | -10.5 |
| Eggs | 120.8 | 163.3 | 35.1 |
| All agricultural outputs | 130.6 | 132.4 | 1.4 |
Notes:
- The price index for poultry is based on deadweight prices reported by processors. These prices are not directly comparable with poultry prices referenced in Chapter 8 which estimate the cost to producers.
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Table 6.2: Annual average price indices for agricultural inputs 2022 to 2023 (2020 = 100)
Enquiries: Mark Kirby on +44 (0)20 7714 1374
Email: [email protected]
| Category | 2022 | 2023 | Annual inflation rate (%) |
|---|---|---|---|
| Seeds | 109.3 | 106.5 | -2.5 |
| Energy and fuel | 176.3 | 167.9 | -4.8 |
| Fertilisers and soil improvers | 297.9 | 190.2 | -36.1 |
| Plant protection products | 111.5 | 125.9 | 12.9 |
| Veterinary services | 102.3 | 105.7 | 3.3 |
| Straight feedingstuffs | 144.0 | 129.6 | -10.0 |
| Compound feedingstuffs | 148.5 | 145.3 | -2.2 |
| Maintenance of materials | 110.6 | 118.6 | 7.2 |
| Maintenance of buildings | 137.2 | 138.6 | 1.0 |
| Other goods and services | 110.6 | 118.6 | 7.3 |
| Materials | 118.3 | 121.5 | 2.7 |
| Buildings | 133.7 | 138.3 | 3.4 |
| All agricultural inputs | 143.2 | 136.1 | -5.0 |
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Revisions
Figures in these tables for 2023 are provisional and may be subject to revision.
Minor revisions have been made across both the outputs and inputs timeseries following methodological improvements to capture previously unrecorded revisions to the historic data.