Cost of milk and fertiliser show biggest falls in August as farming prices continue decline

The price of milk has dropped by 38 per cent in the past year, while the cost of fertiliser fell by 45 per cent, as latest figures show that the costs of inputs for farming and prices of products produced by farmers are continuing to decrease.

In the 12 months to August 2023, the Central Statistics Office’s Agricultural Output Price Index has fallen by 16.2 per cent, while the Agricultural Input Price Index fell by 12 per cent over the same period.

This decrease in both indices is greater than last month’s annual decline. The output index fell by 12 per cent in the year to July, while over the same period the input index was down 11.5 per cent.

The two indices track trends in prices paid to farmers for their produce (outputs) and in prices paid by farmers for purchases of goods and services (inputs).

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Both indices rose sharply at the start of 2022 before levelling off somewhat midyear, and have been falling since the beginning of 2023 (apart from a marginal increase in output prices in May).

In terms of outputs, the most significant price decrease has been for milk, which fell by 38 per cent in the year to August 2023. The cost of cattle has also fallen by 4.6 per cent over the same period.

However, there has been an increase of 37.1 per cent in the price of potatoes in the year to August, and prices for eggs and pigs have risen by 14.2 per cent and 13 per cent respectively.

Looking at farming inputs, there has been a 45 per cent decrease in the cost of fertiliser, while motor fuel prices have fallen by 12.9 per cent. The largest cost increase was for electricity, which has risen by 25.1 per cent in the year to August.

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The annual terms of trade, meaning the output price index expressed as a percentage of the input price index, was down by 4.8 per cent when compared with August 2022.

On a monthly basis, the farming output price index fell by 4.5 per cent between July and August, while the input index was down by 0.4 per cent.

The monthly terms of trade decreased by 4 per cent in August 2023 when compared with the previous month.