Overall costs on a mixed arable and livestock farm since September 2007 are up by 35.53% according to latest research from agricultural purchasing group Anglia Farmers.

Now accepted as the definitive guide, the Anglia Farmers Agricultural Inflation Index is based on actual cost change information from the group’s purchasing office on 95 products. The method is similar to that used for the retail price index (RPI) where products are grouped and then weighted.

In addition to the overall agricultural inflation index, there are five enterprise sectors for combinable crops, potatoes, sugar beet, dairy and beef & lamb.

As can been seen in the table below – which shows nine cost centres and how this relates to the five respective crop and livestock sectors - fertiliser (+17.16%) accounts for half of the increase.

AF Ag Inflation Figures between September 2007 and August 2008

a) Overall Agricultural Inflation is 35.53%

b) Each category of farm expenditure has a different influence on the overall inflation figure

	Inflation within category	Weighted change
Seed	25.4%	1.52%
Fertiliser	156.0%	17.16%
Chemicals	11.4%	1.26%
Animal Costs	43.9%	5.27%
Contract & Hire	9.3%	0.74%
Machinery	22.8%	3.42%
Fuel	57.7%	2.89%
Labour	5.3%	0.74%
Rent, Rates, Finance & Property	14.1%	2.54%
c) By enterprise:            Cereals& OSR      37.21%            Potatoes                37.89%             Sugar Beet            35.64%            Dairy                       35.43%            Beef & Lamb        34.26%		Overall weighted inflation 35.53%

Giving a perspective, Jim Alston - who is a farmer director of Anglia Farmers and co-ordinates the AF Ag Inflation Index, has equated that if a 300 hectare farm mimicked its purchasing from last year at a cost of say £360,000, it would need to find another £120,000 this coming year from increased sales.

Clarke Willis, chief executive of Anglia Farmers, said:

“Our members – and farmers nationwide – rely on this information. Their costs are increasing at an alarming rate and this gives them the only source of accurate data to work with.

“While farmers have seen wheat and malting barley increase significantly in value, even taking into account recent falls, not all crops – such as potatoes and sugar beet - have been so lucky.

“Feed costs have risen by 44% which will soak up any gains made recently in the market place for milk, beef or lamb.

“Machinery costs have and are still seeing dramatic rises as any purchaser of plough metal has already found out. The cost of new machinery other than tractors has risen by between 15 and 20% depending whether it is an imported machine or not.

“Another factor is the singe farm and environmental payments which have reduced due to modulation. Where these form say 12% of income, the remaining income has to rise proportionately more. The higher the proportion the payments are of farm income, the more dramatic agflation will be to future profitability.

“All of this will have an on-going impact on what the consumer pays for food.

“Purchasing groups like ours have never been more important to farmers. We can help give them the bargaining chip on the inputs side and make their voice heard higher up the supply chain.”