API Prices Lower Than Last Year

The agricultural price index (API) for all outputs increased by 0.8% while the API for all inputs decreased by 0.4% in April. Prices overall are lower than last year. At the same time last year the price index was 7% higher than this yea for output while inputs were 4.2% higher.

On the outputs side all price indices for crops this year are lower mainly due to a supply shortage due to the poor harvest of 2012. Energy prices fell again. Feed prices increased by 0.7% over the month but are still 11% lower than last year. Fertiliser prices also fell by 2.2% in April but are still 9.1% lower than last year.

Agricultural Prices Down In March And Year

Prices for all outputs rose by 0.6% and the prices of all inputs was unchanged for March 2014. Prices are lower than the same last year. The price for all outputs was 6.9% lower than the same time year. The price for all inputs was 4.5% lower than the same time last year.

Crop prices are down slightly compared with last year. The poor harvest may have been to blame. Some crop prices are significantly down on last year: potatoes down 38%, fresh fruit down 23%, oilseed rape down 22% and cereals down 22%.

Strong demand for top quality fresh fruit led to a price rise of 7.7% in March. Cereals prices increased by 1.2% due to concerns over the future supply of cereals due to the political situation in the Crimea. An increase in global demand for oilseed rape and decrease in supply led to a price rise of 2.3% in March.

Sheep and lamb prices increased by 9.3% in March as supplies decreased pushing up prices. Lower levels of production of mutton and lamb than last year, down 1.8%, resulted in prices 8.7% higher than last year.

On the inputs side, energy and lubricant prices were 2.5% lower in March and 4% lower than last year. Feed prices increased by 0.5% but remain 12% down on last year. Straights rose by 2% due to increased cereal prices while compounds stayed the same.

The price of fertiliser rose by 0.4% in March but is still 8.2% lower than last year. Prices remain steady because most of the spring fertiliser market was already ordered.

Fall In Agricultural Productivity For Second Year In A Row

Total factor productivity (TFP) in agriculture is estimated to have fallen marginally by 0.1% between 2012 and 2013. There was an increase of 0.5% in the volume of outputs compared with 2012 but a larger increase of 0.7% in inputs. It is second year in a row that TFP has fallen.

Final output by volume at market prices increased by 0.5%. The increase was offset by a 0.7% increase in the volume of all outputs and entrepreneurial labour used in the process.

Long term trends show that total factor productivity increased by 20% between 1988 and 2013 largely due to the volume of outputs remaining the same while the volume of inputs and entrepreneurial labour fell by 18%. TFP was basically unchanged during the mid-80s to mid-90s, it grew by 18% between 1997 and 2005 and has remained unchanged since then with year to year variations.

Total factor productivity is a key measure of the economic performance of the agricultural industry as it measures the efficiency of the industry at turning inputs into outputs.

Agriculture Sees Fall in API in August

The agricultural prices index published by Defra for all outputs fell by 2.5% in August but remains 0.6% higher than last year. The API for all inputs fell by 0.5% but is still 1% higher than last year.

All of the output price categories fell with the exception of milk. Cereals fell 9.7% and are 13% lower than last year, oilseed rape fell 8% and is 15% down on last year, potatoes are 8.8% lower than last year and vegetable prices are down 5.1% and 6% on last year. Livestock prices are 4% down in August but are still 5% higher than last year. Milk has seen a 2.2% increase in price in August and are 20% higher than last year.

On the input side animal feed has fallen in price by 7.2% reflecting falling prices in cereal and industrial crops. Motor fuel price increases of 2.7% have put them 2.3% up on last year.

Agricultural Total Factor Productivity Lowest Since 2004

Total factor productivity in the agricultural industry has fallen by 3.2% between 2011 and 2012 to its lowest since 2004. It is the largest single year fall since 1985. The poor weather conditions in 2012 are said to be responsible. Looking at the longer period the output of the industry has remained more or less unchanged between 1986 and 2012 while the inputs and entrepreneurial labour fell by 19%. This had the effect of increasing productivity by 20%.

Fall Of 14% In Farming Incomes

Total income from farming (TIFF) has fallen by 14% to £4,704m between 2011 and 2012 according to Defra, allowing for he effects of inflation. TIFF per annual work unit of entrepreneurial labour is estimated to have fallen by the same percentage to £25,175 in 2012. The fall in income was said to be due to an increase in the value of inputs and other costs greater than the increase in the value of output. There was also the effect of the changes in value of the pound against the euro regarding direct payments to farmers.

Agricultural Prices Down In October

In the Defra API outputs monthly series for October 2012 the total outputs index was 178.6 from 180.1 in September, a fall of 0.8% in the month but there was an increase of 8.7% over the year. In the inputs monthly series the index was 153 from 153.6 the previous month giving a -0.4% change in prices but an increase of 1.2% over the year. There was 0.7% fall in costs of goods and services currently consumed in production from 159.7 to 158.6 over the month.

The agricultural prices index (API) output prices are divided into major crops prices which increased 0.9% over the month giving an index of 201.7 (199.9=2011) and an increase of 0.9% (16.7%) and livestock and livestock products which increased to 162.3 (161.8) or 0.3% (2.5%). These prices reflect what farmers receive for their products.

Animal feed prices, which are a key indicator, showed a 6.3% change in the price of these inputs whereas prices for animal and animal products showed only a 2.5% change in the output price.

Input prices are divided into goods and services currently consumed (eg. fertiliser and seed) which had an index of 158.6 (159.7) or -0.7% (1.3%) and goods and services contributing to investment (eg. tractors and buildings) which had an index of 123.3 (123.1) an increase of 0.2% (0.6%). These are a reflection of the prices farmers have to pay for goods and services.

The outputs annual series index stood at 165.6 in 2011 (145.9 - 2010) with crop products at 152.3 (133.3) and livestock and livestock products at 154.7 (141.4). The inputs annual series stood at 151.2 in 2011 (135.6 - 2010) with goods and services currently consumed at 157.1 (139.1) and goods and services contributing to investment at 122.5 (118.9).

Agricultural Productivity Up By 26% Since '80s

Statistics from Defra show that the total factor productivity of the agricultural industry has increased by 26% between 1986 and 2011. Final output volumes have remained relatively unchanged over the same period but the volume of all inputs fell by 19% overall though they have increased over the last 5 years. The largest increase is in plant protection products. Entrepreneurial labour has fallen by 6%.

Producer Prices For October

The producer price index for October was published recently by the ONS. The survey suggests that in the year to October the factory gate prices for sales of manufactured products increased by 5.7%. The index excluding food, beverages and tobacco rose by 3.4%. Over the month between September and October the index remained unchanged. The input price index rose by 14.1% on the annual comparison and fell by 0.8% on the monthly comparison.

Producer Prices Increases Again

The most recent producer prices statistical bulletin from the ONS shaowed that in the year to March 2011 output prices rose by 5.4% and input prices rose by 14.6%.

Manufacturing inputs rose in price by 3.7% between February and March 2011 mainly reflecting the increase in prices for crude oil.

Output prices for food products rose 0.5% between february and March and 7.4% in the year to March. In particular, dairy products increased 1.1% notably butter, up 0.4% and bakery products up 0.5%.

Big Increase In The Price Of Inputs

Output prices in manufacturing increased by 4.8% in the year to January 2011 compared with 4.1% last month. Month on month the output price index rose by 1%. Petrol, food and chemicals were the main items responsible for the increase. Input prices increased by 13.4% over the year to January, the highest increase since 2008, compared with 12.9% last month, excluding the more volatile products the increase was 9.9%. Month on month the total input price index increased by 1.7%.