Figures showing the cost of production against RPI reveal that the cost of sugar beet production has fallen by only -0.6% while the RPI for granulated sugar has decreased by -6.52% - all in a year when farmers have received the lowest ever price per ton in real terms.The cost of producing potatoes has fallen by -2.73% while RPI has fallen further, by -7.62%. Two product areas are bucking the trend – the price of producing cereals has risen very slightly by 0.32% while RPI has increased by 3.19%, and beef and lamb production costs have increased by 1.2% while the RPI has risen slightly further, by 1.55%.
The RPI of milk has remained at 0% since 2011 but costs for dairy farmers have shown another increase, with costs up 0.31% (a significantly lower rise that the 4.6% increase in production costs last year.)Costs in the index are noted when they are experienced rather than when the inputs are used and the prices reflect prudent purchasing practice so may include, for example, fertiliser purchased but not applied until the following year.Launched in 2006 by Anglia Farmers (AF), the index has become a definitive tool for assessing the cost of farming production and guiding negotiations within the wider food industry.Using information from the group’s buying office, which has a sourcing power of more than £250 million, it is intended to reflect the changing expenditure of farming and is a weighted average of nine cost centres and 132 cost items. Weightings within cost centres and between them are based on average farm and grower expenditure.