Accredited official statistics

Chapter 9: Intermediate consumption

Updated 22 July 2024

Summary

In this summary, all values are provided in current prices which is considered the most intuitive approach for comparisons over a short time period. It should be noted that these values have not been adjusted for inflation, which was unusually high in 2023 at 7.1%. For the current prices dataset please see Chapter 4: Accounts.

In 2023:

• The total cost of intermediate consumption was £21,086 million, a decrease of £605 million (-2.8%) from 2022 to 2023.

• The value of animal feed decreased by £398 million (-4.8%) from 2022 to £7,820 million in 2023.

• The value of energy decreased by £16 million (-0.8%) from 2022 to £1,913 million in 2023.

• The total value of fertilisers was £1,362 million, a decrease of £541 million (-28%) from 2022 to 2023.

Introduction

Chapter 4: Accounts provides more detailed information on input costs and gives a full breakdown of intermediate consumption.

Figures 9.3 and 9.4 present the value of energy and fertilisers respectively. These are presented in real terms, adjusted for inflation, which provides more meaningful comparisons over longer time periods. Comparisons over more recent years, as presented in Chapter 4, are presented at current prices, not adjusted for inflation, which is considered the most intuitive for comparisons over shorter time periods.

Inputs

Figure 9.1 Intermediate consumption (at current prices, £ billion)

Enquiries: Alexandra Hall +44 (0)20 7714 1374
Email: [email protected]

Year	Intermediate Consumption (£ billion)
2018	17.1
2019	17.2
2020	16.9
2021	18.6
2022	21.7
2023	21.1

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Figure 9.1 shows the value of intermediate consumption from 2018 to 2023. Since 2018, the average value of intermediate consumption is £18.7 billion, with the lowest value for £16.9 billion occurring in 2020 and the highest value of £21.7 billion occurring in 2022. The value for intermediate consumption in 2023 fell by £0.6 billion (-2.8%) from 2022.

Animal Feed

Table 9.1 Animal feed (thousand tonnes unless stated otherwise)

Enquiries: Allan Howsam on +44 (0)20 802 66123
Email: [email protected]

	2021	2022	2023
Compounds:
Cattle	5,078	4,991	4,977
Calves	277	260	263
Pigs	2,343	2,263	2,061
Poultry	5,209	4,826	4,667
Sheep	898	861	780
Total compounds plus imports less exports	13,878	13,262	12,779
Straight concentrates	6,941	6,383	6,365
Non-concentrates	525	525	525
Inter/intra farm transfer	8,905	9,227	11,460
Total animal feed	30,248	29,397	31,128
Total value of animal feed (£ million)	£6,630	£8,219	£7,820

Notes:

1. Compounds poultry: includes poultry feed produced by ‘retail’ compounders but excludes production from integrated poultry units which are included within the straight concentrates data.

2. Straight concentrates are cereals, cereal offals, proteins and other high energy feeds.

3. Non-concentrates are low-energy bulk feeds expressed as concentrate equivalent. Brewers and distillers grains, hay, milk by-products and other low-energy bulk feeds expressed in terms of equivalent tonnage of high energy feeds.

4. ‘Maize for stockfeed’ is included within the ‘inter/intra farm transfer’ category.

5. See Chapter 4: Accounts Table 4.1 for a full breakdown of the value of purchased animal feed.

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The cost of animal feed is the largest item of expenditure recorded in the agricultural accounts. The total volume of animal feed increased by 5.9% from 2022 to 31.1 million tonnes in 2023 due to a 24% increase in inter/intra farm sales. However, despite this volume increase, the overall value of animal feed in 2023 decreased by 4.8% to £7.8 billion, following trends in commodity prices. 2023 saw the price of commodities fall after the summer 2022 peak as a result of markets adjusting to the ongoing Russia / Ukraine conflict and reduced demand.

Total compound feed volume decreased by 3.6%, with decreases in pigs (-8.9%), sheep (-9.4%), poultry (-3.3%) and cattle (-0.3%). Compound feed for calves showed a small increase of 1.3%. The pig and poultry sectors have faced a number of challenges in recent years due to a combination of high feed and energy costs, butchery capacity and disease risks. Sufficient grass growth in the latter half of 2023 reduced the need for extra supplementary compound feed for cattle and sheep. The volume of straight concentrates decreased by 0.3% in 2023.

Defra June 2023 Survey results showed a 2.9% decrease in poultry numbers to 178 million birds. Broiler numbers saw a decrease of 4.3% to 116 million, whereas the breeding and laying flock increased by 2.5% to almost 54 million. The total number of pigs in the UK decreased by 10% to 4.7 million animals, with breeding pigs decreasing by 0.2% and fattening pigs decreasing by 11%. Sheep and lambs showed a decrease of 4.1%, to just under 32.0 million. The female breeding flock decreased by 2.4% to 15.4 million whilst the number of lambs decreased by 6.1% to 15.5 million. By contrast the population of cattle and calves showed little change at 9.6 million.

Oil Prices

Figure 9.2 Annual Europe Brent Spot Price ($ per barrel)

Enquiries: Alexandra Hall +44 (0)20 7714 1374
Email: [email protected]

Text description for Figure 9.2: Figure 9.2 is a line chart showing the Europe Brent Spot Price from 2000 to 2023. Values are presented as $per barrel at current prices.

Source: U.S. EIA(Energy Information Administration)

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Some inputs, such as fuel, electricity and fertilisers, are closely linked to oil price. Consequently, oil price plays a role in the increase or decrease of the costs for running machinery and for heating, lighting, drying crops and the cost of fertiliser purchases.

Figure 9.2 shows the trend in annual Europe Brent crude oil prices since 2000. Oil prices rose strongly between 2002 and 2008 but fell sharply in 2009 as a global financial crisis hit. Between 2011 and 2014, oil prices were high but relatively stable due to a weak global economy and tension in the Middle East.

Into 2015, strong global production exceeded demand, causing prices to fall rapidly, dropping below $45 per barrel by 2016. Prices rose steadily through 2017 and 2018, reaching just over $70 a barrel, amid fears of US sanctions and global shortages. However, the price was still much lower compared to the high prices seen at the start of the decade.

In 2020, coronavirus related restrictions resulted in a rapid contraction in global demand for oil, particularly for travel. This caused the price to fall below $42 per barrel for the first time since 2004. The price rebounded strongly in 2021, as the easing of COVID-19 restrictions globally saw the demand for oil outpace supply. The average price in 2021 was $71 per barrel, slightly lower than the peak in 2018 and still considerably lower than the highest price of $112 per barrel in 2012.

This increase of 69% from 2020 to 2021 was followed by an increase of 42% to $101 per barrel in 2022. Russia’s invasion of Ukraine in February 2022 had a significant impact on the import of crude oil to Europe, with the volume of Russian oil decreasing throughout the year from approximately 28% of total imports in January to 4% in December. This decrease in volume coupled with uncertainty of supply saw oil prices peak in July 2022 at $122 per barrel before stabilising throughout the year as dependency on Russian imports decreased.

In 2023 the annual price of crude oil decreased by 18%, from 2022, to $83 per barrel. This fall was driven by global markets reacting to new trade dynamics as well as global demand falling short of expectations, which together offset impacts from OPEC+(Organization of the Petroleum Exporting Countries) crude oil supply curbs.

For more information on European oil prices see this article: EIA

Energy

Figure 9.3 Energy (in real terms, £ million)

Enquiries: Alexandra Hall +44 (0)20 7714 1374
Email: [email protected]

Text description for Figure 9.3: Figure 9.3 is a line chart showing the value of energy in real terms from 2000 to 2023. Values are presented in millions.

Download the full Intermediate consumption dataset

Figure 9.3 shows the value of energy usage for agriculture in real terms. Over the long term the value of energy costs has followed a similar pattern to that of the crude oil price (see Figure 9.2). Energy costs generally increased during the 2000s, reaching a peak in 2012 before falling again. From 2015-2021 energy costs have averaged £1,534 million (in real terms), but with some relatively large year on year fluctuations. In 2022, energy costs rose sharply following Russia’s invasion of Ukraine, reaching a peak of £2,038 million.

In 2023 the total cost of energy was £1,913 million, a decrease of £16 million (-0.8%) from 2022, at current prices. This was driven by a decrease in motor and machinery fuels of £126 million (-10%) to £1,123 million, which was partially balanced by an increase in electricity and fuels for heating of £111 million (16%) to £790 million. The decrease in motor and machinery fuels in 2023 follows the reduction in oil price from 2022. The increase in energy and fuels for heating was a result of a 15% increase in prices in 2023, combined with the need for more crop drying following wet weather at harvest.

For the full current prices and real terms dataset see Chapter 4: Accounts

Fertilisers

Figure 9.4 Fertilisers (in real terms, £ million)

Enquiries: Alexandra Hall +44 (0)20 7714 1374
Email: [email protected]

Text description for Figure 9.4: Figure 9.4 is a line chart showing the value of fertilisers in real terms from 2000 to 2022. Values are presented in millions.

Download the full Intermediate consumption dataset

Natural gas is used in the process of manufacturing nitrogen fertilisers and its price is closely linked to the price of oil. Consequently, if the price of oil rises so does the cost of producing fertiliser.

Figure 9.4 shows fertiliser costs since 2000 in real terms. Between 2000 and 2007 fertiliser costs were largely stable. However, from 2007 to 2008 they increased by 78% (in real terms) and remained high until peaking in 2011. Between 2012 and 2019 fertiliser costs steadily declined, with a sharp drop in 2020, resulting from reductions in both prices and the volume of fertilisers used. Fertiliser costs rose sharply in 2021 and 2022, peaking at £2,038 million.

2023 saw a decrease in the price of all straight fertilisers, with a decrease of £541 million (-28%) from 2022, to £1,362 million (at current prices). The main driver of this decrease was lower prices, with an average decrease in price of 34% across all straight fertilisers. These price decreases encouraged farmers to apply more fertiliser, resulting in a volume increase that slightly offset the price reductions. Overall the value of fertiliser in 2023 returned to 11% below the 6 year real terms average of £1,530 million.

Other Input Costs

The cost of seeds in 2023 was £881 million, a decrease of £35 million (-3.8%) from 2022. Seed usage is driven by a combination of crop area, time of drilling, and drilling conditions. There was a 2% increase in area of spring cereals planted and 7% reduction in area of winter cereals planted in 2023. In spring 2023, seed rates were variable as a result of mixed drilling conditions. Despite some drilling delays, the area of spring crops had increased compared to spring 2022, with a 7% increase seen in the area of spring barley. The increases in spring area led to a 7% reduction in area of winter cereals.

The cost of plant protection products in 2023 was £1,048 million, an increase of £82 million (8.5%) from 2022. This decrease was largely driven by the reduction in the volume applied on cereal and horticulture farms in 2023.

Revisions

Explanation for any revisions to these data can be found in Chapter 4: Accounts