The cost of farming inputs has increased by another eye-watering 23% in just six months to the end of March 2022, latest figures show.
This increase comes on top of the almost 22% rise recorded in the annual AF Aginflation Index, for the year to September 2021.
Four out of the nine categories of inputs saw double digit inflation with animal feed, fuel and fertiliser seeing greatest increases at 27%, 29.4% and 107.7% respectively.
The figures in the AF Interim Aginflation Index show that no farming enterprise has been able to avoid double digit inflation.
Cereals and OSR production show the highest increases in costs at 28.05%, and sugar beet growing as the lowest but still at 18.97%.
The total food Retail Price Index has risen over the same six months period as the by an average of 5.6%, beginning to follow the sharp upward curve of Aginflation but not at a rate to supply prices to farmers that cover their increased costs.
The only food group to show negative inflation is potatoes at -2.3%. The Index shows costs to that category of farming enterprise have risen by 26.72% giving a combined total of 29.02%, recording greater effect on margins than cereals and OSR.
The dairy enterprise category has inflation reaching 21.32% in the last six months. However, the increased value from milk retail of 19% is closing the gap.
AF chief executive David Horton-Fawkes said the latest figures illustrated the crisis many farmers were facing, and the consequences would be felt across society.
"The causes are deeply rooted and go beyond the appalling events in Ukraine and the continued lockdowns in China," he explained.
"Farmers are inherently resourceful, but cash flow now poses an existential threat to many businesses because some simply won’t be able to afford to grow crops or raise livestock next year."
Tony Bambridge, of B & C Farming Limited, who is an AF member, responded to the latest figures: "For every £100 you needed a year ago you now need £150 to just run your business in the same way. The critical thing is can we retain that margin that we need?”
In Yorkshire, carrot and cereal grower comments that the value of the Index is useful because “it’s crystallising what we on the ground already knew is happening."
"And that we have to get the message out there so people understand the challenge we are facing”. It is also making him question the future of forward contracts.
“What looked like a sensible deal that we signed in December (before the war in Ukraine and other challenges) does not look so good now.
"How can farming have forward pricing when things are so volatile?”
The Aginflation Index is a weighted average of over 130 items using data from the AF procurement teams which spend more than £250m a year to procure farm inputs on behalf of members.
