Chapter 6: Prices
Updated 21 October 2022
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Summary
- The annual average price index for all agricultural outputs increased by 10% from 2020 to 2021.
- The largest upward contribution to the annual inflation rate for agricultural outputs was from wheat (2.3 percentage points), followed by cattle and calves (1.8 percentage points) and milk (1.7 percentage points). The main downward contribution came from pigs (-0.5 percentage points).
- The annual average price index for all agricultural inputs increased by 11% from 2020 to 2021.
- The largest upward contribution to the annual inflation rate for agricultural inputs was from fertilisers and soil improvers (3.6 percentage points), followed by compound feedingstuffs (2.5 percentage points) and straight feedingstuffs (1.5 percentage points).
Data sources
The Agricultural Price Index (API) measures the monthly price changes in agricultural outputs and inputs for the UK.
The output series reflects the prices farmers receive for their products, also referred to as farm-gate prices. Information is collected for all major crops (for example cereals, fruit and vegetables), and for livestock and animal products (for example sheep, milk, and eggs). It should also be noted that the price index for poultry is based on deadweight price reporting by processors. These prices are not directly comparable with poultry prices referenced in Chapter 8 which estimate the cost to producers.
The input series reflects the prices farmers pay for goods and services and is split into two groups: goods and services currently consumed, and goods and services contributing to investment. Goods and services 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 farm buildings.
Monthly price data for potatoes were not available for the latter half of 2021. Therefore, the potato price index for June 2021 was applied to the rest of the year (July to December 2021, inclusive). As a result, the potato price index for 2021 may be inflated since typically the potato price index follows a seasonal decline in the latter half of the calendar year.
Further information can be found in the monthly Agricultural Price Index publication.
Summary chart for price indices
Figure 6.1: Annual average price indices for agricultural outputs and inputs from 2015 to 2021 (2015 = 100)
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
| Year | All agricultural outputs | All agricultural inputs |
|---|---|---|
| 2015 | 100.0 | 100.0 |
| 2016 | 99.6 | 97.4 |
| 2017 | 110.7 | 102.5 |
| 2018 | 115.4 | 110.9 |
| 2019 | 114.2 | 112.6 |
| 2020 | 119.2 | 112.6 |
| 2021 | 131.2 | 125.3 |
Download the full prices dataset.
Figure 6.1 shows the annual average price indices for agricultural outputs and inputs since 2015. Compared with 2020, the annual average price index for 2021 is 10% higher for agricultural outputs and 11% higher for agricultural inputs.
The year in which the agricultural outputs price index exceeds the agricultural inputs price index by the largest amount remains 2017, with 2020 showing the second largest difference. Both price indices are currently at their highest value in the time series.
Contributions to change in the annual agricultural outputs and inputs inflation rate
Figure 6.2: Contributions to change in the agricultural outputs annual inflation rate between 2020 and 2021 (2015 = 100)
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
| Category | Contribution (percentage points) |
|---|---|
| Wheat | 2.32 |
| Cattle and calves | 1.76 |
| Milk | 1.68 |
| Oilseed rape | 1.37 |
| Sheep and lambs | 1.30 |
| Barley | 0.94 |
| Plants and flowers | 0.32 |
| Fresh vegetables | 0.26 |
| Eggs | 0.23 |
| Potatoes | 0.18 |
| Forage plants | 0.17 |
| Poultry | 0.08 |
| Oats | 0.04 |
| Sugar beet | 0.03 |
| Fresh fruit | -0.36 |
| Pigs | -0.50 |
Notes:
- Not all agricultural output categories are shown in Figure 6.2. Therefore, the sum of the contributions in Figure 6.2 may be slightly less than the annual inflation rate.
Download the full prices dataset.
Figure 6.2 shows the contributions to the 10% change in the agricultural outputs inflation rate between 2020 and 2021. Fourteen out of the sixteen output categories shown reported higher prices. The largest upward contribution came from wheat - much of this can be explained by tight global supply and unfavourable harvests: just 30% of US winter 2021 wheat was classed as good or excellent. Meanwhile, rises in input costs such as feed and fertiliser coupled with labour shortages have also placed cattle and calves, sheep and lambs, and milk as large upward contributors, with many farms being forced to downsize livestock counts or sell up fully. Downward contributions were seen for pigs and fresh fruit owing to an oversupply of pig meat across Europe and increased imports of fresh fruit from the Southern Hemisphere.
Figure 6.3: Contributions to change in the agricultural inputs annual inflation rate between 2020 and 2021 (2015 = 100)
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
| Category | Contribution (percentage points) |
|---|---|
| Fertilisers and soil improvers | 3.63 |
| Compound feedingstuffs | 2.51 |
| Straight feedingstuffs | 1.51 |
| Energy and fuel | 1.30 |
| Buildings | 0.70 |
| Maintenance of buildings | 0.59 |
| Other goods and services | 0.40 |
| Materials | 0.29 |
| Maintenance of materials | 0.23 |
| Seeds | 0.09 |
| Plant protection products | 0.07 |
| Veterinary services | 0.02 |
Download the full prices dataset.
Figure 6.3 shows the contributions to the 11% change in the agricultural inputs inflation rate between 2020 and 2021. All twelve output categories shown reported higher prices. The largest upward contributions came from fertilisers and soil improvers, followed by compound and straight feedingstuffs. As energy-intensive commodities, fertiliser prices have been strongly impacted by the rise in energy costs associated with the tight global supply-demand balance of energy. The supply-demand balance for feedingstuffs, particularly feed wheat, was particularly tight towards the end of 2021. Russian export curbs and poor anticipated planting conditions further accelerated price rises.
Trends in price indices through the year
Agricultural outputs
Figure 6.4: Monthly cereal price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for cereals increased by 23% in 2021 compared with 2020. This increase was driven by a tight global supply-demand balance for much of the year, together with export curbs on cereals from various markets, including Argentina early in the year and Russia in the autumn. Following mid-year price declines due to favourable growing conditions across the Black Sea and EU growing regions, cereal prices increased throughout the later months of 2021. This was driven by a tight global supply-demand balance and strong demand for European wheat. The announcement of a 14-year low in US wheat stocks within the USDA September quarterly grain stocks report also contributed to price increases towards the end of the year.
Figure 6.5: Monthly oilseed rape price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for oilseed rape increased by 38% in 2021 compared with 2020. Tight global vegetable oil supply was a key upward driver of oilseed rape prices in the first half of 2021 following initial reductions in US and Brazilian stocks. A strong US planting season then led to a mid-year price drop, but strong price rises followed from August onwards. Additionally, the three-month UK national lockdown between January and March led to a very poor UK harvest. Global oilseed rape supply remained tight in the second half of 2021, furthered by a relatively small Canadian crop.
Figure 6.6: Monthly cattle and calves price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for cattle and calves increased by 14% in 2021 compared with 2020. Particularly strong growth was observed in the first four months of 2021 as UK supplies remained tight due to low throughput. Prices continued to rise in the rest of the year amid reductions in prime cattle available for slaughter. Cattle and calf prices stabilised from October as an increase in young stock count offset declines in breeding cow and older cattle counts in UK cattle populations.
Figure 6.7: Monthly sheep and lambs price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for sheep and lambs increased by 22% in 2021 compared with 2020, though considerable price fluctuations were seen through the year. Prices increased strongly in the first half of 2021 amid tight supply throughout Europe, while traditionally major exporters to Europe such as New Zealand diverted their focus towards Asian and Middle Eastern exports. A fall in prices then followed due to falling demand for small lambs, particularly demand from France, and rises in sheep meat production. Further increases followed in the final three months of the year amid usual seasonal demand, as well as a shortage of New Zealand lamb on the British market due to shipping problems associated with the Covid-19 pandemic.
Figure 6.8: Monthly pigs price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for pigs decreased by 8.3% in 2021 compared with 2020. Strong domestic demand in 2021 drove pig prices to a mid-year peak; this came despite a weakening in the EU pig market and declining Asian demand for UK pigs. However, this trend was reversed in the second half of 2021. High supplies of pig meat across Europe led to a reduction in UK prices in order to remain competitive.
Figure 6.9: Monthly milk price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for milk increased by 8.8% in 2021 compared with 2020, driven by reduced production as a result of increasing input costs in the latter half of 2021. Surges in fertiliser and feed prices resulted in many farms downsizing cow numbers, and in some cases selling up their farms completely. Additionally, high beef prices towards the end of the year incentivised the culling of less productive dairy cows, further reducing production.
Figure 6.10: Monthly fresh fruit price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for fresh fruit decreased by 7.4% in 2021 compared with 2020. The most significant price drop in 2021 occurred between May and June, which was a very busy period for imports from the Southern Hemisphere.
Agricultural inputs
Figure 6.11: Monthly fertilisers and soil improvers price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for fertilisers and soil improvers increased by 51% in 2021 compared with 2020. This increase was primarily driven by rising fertiliser prices. Fertiliser prices are linked to the global wholesale energy price because gas is a key component in ammonium nitrate production. Very strong price growth in fertiliser prices was seen in autumn 2021 as energy price growth peaked, and domestic production of fertilisers dropped following the closure of two UK fertiliser plants in September 2021. Moreover, increasing commodity prices in 2021 incentivised growing, further increasing demand for fertiliser and driving prices even higher. However, December 2021 saw a modest price reduction as wholesale energy prices declined amid a re-routing of additional supplies from Asia to Europe.
Figure 6.12: Monthly energy and fuel price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for energy and fuel increased by 17% in 2021 compared with 2020. The steepest rises occurred towards the end of 2021 amid a surge in demand as many countries relaxed existing Covid-19 lockdown measures. Moreover, global energy supplies were left in short supply following a cold 2020-21 winter and households spending more time in their homes as lockdown measures tightened.
Figure 6.13: Monthly animal feedingstuffs price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for animal feedingstuffs increased by 14% in 2021 compared with 2020. By-products of cereals (e.g. feed oats) recorded particularly strong rises as the global supply of wheat remained tight throughout 2021 and strong demand was observed for European wheat. Additionally, tight global supplies of rapeseed and vegetable oils boosted the prices of oilseed rape and rapeseed meal, particularly towards the end of the year.
Figure 6.14: Monthly maintenance of buildings price index 2020 and 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
Download the full prices dataset.
The annual price index for maintenance of buildings increased by 15% in 2021 compared with 2020.This price index rose throughout 2021 amid shortages of cement and timber, and increased demand for repair work following the lifting of Covid-19 restrictions.
Summary table of price indices
Table 6.1: Annual average price indices for agricultural outputs 2020 to 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
| Category | 2020 | 2021 | Annual inflation rate (%) |
|---|---|---|---|
| Wheat | 138.8 | 168.4 | 21.3 |
| Barley | 119.3 | 154.9 | 29.8 |
| Oats | 120.1 | 133.8 | 11.4 |
| Oilseed rape | 128.9 | 177.4 | 37.7 |
| Sugar beet | 101.6 | 104.8 | 3.1 |
| Forage plants | 176.8 | 240.6 | 36.1 |
| Fresh vegetables | 127.4 | 132.1 | 3.7 |
| Plants and flowers | 104.8 | 110.7 | 5.6 |
| Potatoes | 125.8 | 132.5 | 5.4 |
| Fresh fruit | 172.2 | 159.5 | -7.4 |
| Cattle and calves | 105.3 | 120.3 | 14.3 |
| Pigs | 122.6 | 112.4 | -8.3 |
| Sheep and lambs | 124.1 | 151.3 | 21.9 |
| Poultry | 113.5 | 114.3 | 0.7 |
| Milk | 116.8 | 127.0 | 8.8 |
| Eggs | 90.8 | 99.2 | 9.2 |
| All agricultural outputs | 119.2 | 131.2 | 10.0 |
Download the full prices dataset.
Table 6.2: Annual average price indices for agricultural inputs 2020 to 2021
Enquiries:
Matthew Lunn on +44 (0)20 3025 7160
Email: prices@defra.gov.uk
| Category | 2020 | 2021 | Annual inflation rate (%) |
|---|---|---|---|
| Seeds | 113.2 | 115.3 | 1.9 |
| Energy and fuel | 109.9 | 128.2 | 16.6 |
| Fertilisers and soil improvers | 90.5 | 136.6 | 51.0 |
| Plant protection products | 146.0 | 147.2 | 0.8 |
| Veterinary services | 115.1 | 116.0 | 0.8 |
| Straight feedingstuffs | 128.2 | 148.2 | 15.6 |
| Compound feedingstuffs | 112.1 | 127.2 | 13.5 |
| Maintenance of materials | 112.7 | 117.0 | 3.8 |
| Maintenance of buildings | 112.3 | 129.4 | 15.2 |
| Other goods and services | 110.2 | 113.5 | 2.9 |
| Materials | 106.3 | 108.9 | 2.4 |
| Buildings | 110.8 | 124.8 | 12.7 |
| All agricultural inputs | 112.6 | 125.3 | 11.3 |
Download the full prices dataset.
Revisions
Revisions were made to the following five price indices for 2020; all these revisions arise due to the availability of more accurate price data:
- Sugar beet
- Fresh vegetables
- Poultry
- Seeds
- Plant protection products