Agflation is more than double agricultural outputs, as grain prices fall

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The Andersons Centre is an agricultural, rural and food sector business management consultancy firm, and their July Agflation estimations shows the current patency of the cost-of-farming squeeze. 

The Centre’s July estimation puts Agflation at 23.5% annually – a figure that is more than double that of the annual agricultural outputs, which sits at 10.1%.

As such, when Agflation is plotted against agricultural output prices, food inflation at 9.8% (from CPI Food) and general economic inflation at 9.4% (CPI), Andersons says that the cost of farming squeeze is especially distinct.

Andersons adds that the recent fall in commodity grain prices have been the main driver of the divergence of ag-output prices and Agflation. Though, ‘it also suggests that consumers are struggling to afford rising food prices, and that retailers and food service providers are reluctant to pass on further increases’.

With that, Andersons say that the challenges facing the UK economy do not appear to be easing; with rising energy prices and the Bank of England’s projections that inflation will increase by 13% before the close of 2022.

Source: ONS, Defra and Andersons

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Journalist. Graduated from the University of Sussex with a degree in English and Art History. When not working I can be found riding my horses on the Ashdown Forest, reading, shopping, or cooking!