Agricultural price indices – United Kingdom: May 2024 (2024)

The Agricultural Price Index (API) is an index of the price of agricultural outputs and inputs for the UK used to track change over time. More details on the index, including how it is produced, are in the Background section at the end of this document.

1. Key points at May 2024

Outputs

• The price index for agricultural outputs increased by 4.0% in the 12 months to May 2024.
• There were 8 upward contributions to the 12-month inflation rate for agricultural outputs recorded for May 2024. The largest upward contribution was potatoes (+4.1 percentage points), followed by sheep and lambs (+1.1 percentage points), andmilk (+0.5 percentage points).
• There were 6 downward contributions to the 12-month inflation rate for agricultural outputs recordedfor May 2024. The largest downward contribution was poultry (-1.4 percentage points), followed by cattle and calves (-0.4 percentage points), and pigs (-0.3 percentage points).
• The price index for agricultural outputs increased by 1.2% in the month to May 2024. In comparison, the index increased by 1.6% in the month to April 2024.

Inputs

• In the 12 months to May 2024, the price index for agricultural inputs decreased by 5.1%.
• There were 5 upward contributions to the 12-month inflation rate for agricultural inputs recorded for May 2024. The largest upward contribution came from maintenance of materials (+0.4 percentage points), followed by materials (+0.2 percentage points), and buildings (+0.1 percentage points).
• There were 7 downward contributions to the 12-month inflation rate for agricultural inputs recorded for May 2024. The largest downward contribution was compound feedingstuffs (-2.3 percentage points), followed by fertilisers and soil improvers (-1.7 percentage points), and energy and lubricants (-0.8 percentage points).
• The price index for agricultural inputs decreased by > -0.1% in the month to May 2024. In comparison, the index decreased by 0.7% in the month to April 2024.

2. Summary charts for price indices

Figure 1: Monthly price indices for agricultural outputs and inputs to May 2024 (2020 = 100)

Figure 1 illustrates monthly price indices for agricultural outputs and inputs since January 2020. The price indices for both agricultural outputs and inputs began rising steeply around autumn 2021.

The index for output prices peaked a few months after that for input prices, towards the end of 2022, and remained consistently below the input prices from mid-2021 until the end of 2023. Despite declines in the indices for outputs and inputs throughout the majority of 2023, both remain considerably higher than the 2020 baseline. Following recent increases in the outputs index, it has been higher than the inputs index since December 2023.

Figure 2: Annual average price indices for agricultural outputs and inputs to May 2024 (2020 = 100)

Figure 2 shows the annual average price indices for agricultural outputs and agricultural inputs since 2014. In 2024 (to date), the annual average price index increased by 2.5% for agricultural outputs and decreased by 4.3% for agricultural inputs. The year with the largest difference between the agricultural outputs and agricultural inputs was 2022, with 2024 showing the second largest difference.

3. Contributions to change in the annual agricultural outputs and inputs inflation rate

Figure 3: Contributions to change in the agricultural outputs index (+4.0%) from May 2023 to May 2024 (2020 = 100)

Figure 3 shows the contributions to the +4.0% agricultural outputs 12-month inflation rate between May 2023 and May 2024. Of the 16 output categories shown 8reported higher prices. The largest upward contributions came from potatoes, sheep and lambs, and milk. The largestdownward contributions were from poultry, cattle and calves, and pigs.

Notes:

• Small values may be shown as zero due to rounding.

Figure 4: Contributions to change in the agricultural inputs index (-5.1%) from May 2023 to May 2024 (2020 = 100)

Figure 4 shows the contributions to the -5.1% agricultural inputs 12-month inflation rate between May 2023 and May 2024. The largest upward contributions came from maintenance of materials, materials, and buildings. The largest downward contributions were from compound feedingstuffs, fertilisers and soil improvers, and energy and lubricants.

Notes:

• Small values may be shown as zero due to rounding.

4. Contributions to the annual agricultural outputs and inputs inflation rate

Figure 5: Contributions to the 12-month inflation rate in agricultural outputs, UK, May 2023 to May 2024

Figure 5 illustrates the varying contributions of different agricultural commodity categories to the12-month inflation rate for agricultural outputs from May 2023 to May 2024. The 12 monthinflation rate for agricultural outputs has ranged from -6.1%to +4.0% during this period.

For May 2024, horticulture had the largest positive contribution at +4.1 percentage points. Industrial and other crops (+0.2 percentage point), and cereals (+0.1 percentage points) also made positive contributions. Livestock and animal products had the most substantial negative impact, contributing -0.4 percentage points.

Figure 6: Contributions to the 12-month inflation rate in agricultural inputs, UK, May 2023 to May 2024

Figure 6 depicts the contributions of various agricultural inputs to the 12-month inflation rate foragricultural inputs from May 2023 to May 2024. The inflation rate for agricultural inputs ranged from -13.2% to-5.1% during this period.

For May 2024 other farm costs was the only input that made a positivecontribution to the 12-month inflation rate, adding +0.5 percentage points. Livestock related costs had the most substantial negative impact, contributing -2.6 percentage points, followed by crop related costs(-2.2 percentage points) and energy and fuel (-0.8 percentage points).

More information on the contents of each group can be found in the ‘About these statistics’ section below.

5. Summary table of price indices

Table 1: Agricultural Output Price Indices and Inflation Rates (May 2023 - May 2024)

Table 1 displays the price indices for agricultural outputs in May 2023, April 2024, and May 2024, with the base year being 2020 = 100. Additionally, it provides the 12-month (year-over-year) and 1-month (month-over-month) inflation rates for agricultural outputs. The agricultural outputs are split by the two main categories: crop products, and animals and animal products.

Notes:

• Sugar beet prices are provided annually and with a delay of upwards of a year. Lack of change in this index, monthly or yearly, is not necessarily representative of price changes within this market.

• Egg prices are provided quarterly and with a delay of several months. Lack of change in this index, monthly or yearly, is not necessarily representative of the price changes within this market.

• This table presents several summary categories so values should not be summed to prevent double counting.

• Small values may be shown as zero due to rounding.

Table 2: Agricultural Input Price Indices and Inflation Rates (May 2023 - May 2024)

Table 2 displays the price indices for agricultural inputs in May 2023, April 2024, and May 2024, with the base year being 2020 = 100. Additionally, it provides the 12-month (year-over-year) and 1-month (month-over-month) inflation rates for agricultural inputs. The agricultural inputs are split by the two main categories: goods and services currently consumed in agriculture, and goods and services contributing to investment.

Notes:

• Price data are provisional for most agricultural inputs.

• This table presents several summary categories so values should not be summed to prevent double counting.

• Small values may be shown as zero due to rounding.

What you need to know about this release

Accredited official statistics are called National Statistics in the Statistics and Registration Service Act 2007. An explanation can be found on the Office for Statistics Regulation website.Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to.

These accredited official statistics were independently reviewed by the Office for Statistics Regulation in 2014. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’.You are welcome to contact us directly with any comments about how we meet these standards (see contact details below). Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

Since the latest review by the Office for Statistics Regulation, we have continued to comply with the Code of Practice for Statistics, and have made the following improvements:

• updated the range of prices collected based on availability and quality
• improved weighting methodology.

About these statistics

Background

The output series reflects the price farmers receive for their products, also referred to as farm gate price. Information is collected for all major crops (for example wheat and potatoes) and livestock and animal products (for example sheep, milk and eggs).

The input series reflects the price farmers pay for goods and services. The series is in two groups:goods and services currently consumed; and goods and services contributing to investment. Goods andservices currently consumed refer to items that are used up in the production process, for example fertiliser or seed. Goods and services contributing to investment relate to items that are required but not consumed in the production process, such as tractors or buildings.

Data uses

Farmers use the Agricultural Price Index to help set prices for their outputs and monitor the pricespaid for inputs. Analysts in Government, industry specialists, consultants, economists and academicsuse the data to assess the impact that price changes have on industry and consumers.

The Office of National Statistics (ONS) uses API data in the production of the Producer Price Index (PPI), which is one of the key measures of inflation.

Methodology

Price data

Defra collect prices from a wide variety of sources to produce the monthly API. This includes data from our own surveys, information from the Horticultural Marketing Inspectorate (HMI), Agricultural and Horticultural Development Board (AHDB), and the ONS. For some items we only receivequarterly or annual data, for example, electricity prices. When no new data are available estimatesare made based on previous values until new data becomes available. When new data become available, historical revisions are made and a note is added in the ‘What you need to know about this release’ section.

In order to maintain continuity in these statistics, the Agricultural Price Index is produced in accordance with the European Statistical System.

Weights

Each price point is assigned a weight which reflects its contribution to the overall index. The weights for each item represent their annual monetary value from the Agricultural Accounts. For example, if the annual value of animal feed purchased is three times more than fertilisers then theannual weight for animal feed will also be three times more than for fertiliser. Where monthly datais available, monthly and quarterly weights for outputs reflect the pattern of sales volumes acrossthe year. For example, if the volume of sales for apples in October is double that in June, then theOctober weight for apples is double the weight for June. Monthly and quarterly weights for input items do not vary within the year. The weights are recalculated every five years to reflect more recent data. The March 2023 index was the first to be produced using weights based on 2020, replacing weights based on 2015.

Contributions

It is often of interest to estimate the effect of a group or item on the change in the agriculturaloutputs or inputs index. The contribution of a group or item to a change in the all items index overa given period of time is defined as the change that would have occurred in the all items index ifthat component had undergone its observed change but all other component indices had remained frozenat their values at the start of the period (and all weights are kept the same). The effect of eachcomponent depends on both the size of its change and its weight.

The formula for calculating the contributions to changes in the agricultural inputs inflation ratediffers from the agricultural outputs inflation rate, reflecting the fact that monthly and quarterlyweights for input items do not vary within the year. The formulas for calculating contributions tochanges in all items index with seasonal and non-seasonal weights can be found in the 2007 Technical Manual on Consumer Price Indicespublished by the ONS.

The categories shown in Figure 5 and 6 were created by aggregating the following categories:

• Fresh fruit, fresh vegetables, flowers and plants, and potatoes into horticulture.

• Industrial crops, forage plants and other crop products into industrial and other crops.

• Fertilisers and soil improvers, plant protection products and seeds into crop-related costs.

• Animal feedingstuffs and veterinary services into livestock-related costs.

• Maintenance of buildings, maintenance of materials, other goods and services, buildings and materials into other farm costs.

User engagement

As part of our ongoing commitment to compliance with the Code of Practice for Official Statistics,we wish to strengthen our engagement with users of these statistics and better understand the usemade of them and the types of decisions that they inform. Consequently, we invite users to makethemselves known, to advise us of the use they do, or might, make of these statistics, and what their wishes are in terms of engagement. Feedback on this notice and enquiries about these statistics are also welcome. Feedback can be provided via this survey as well as by phone or email.

Responsible statistician: Mark Kirby

Email: prices@defra.gov.uk

Media enquiries: (0)330 041 6560; newsdesk@defra.gov.uk