I grew up in a period of high inflation in the 1970s, but by the time I started farming Mrs Thatcher had come to power and her unpalatable medicine of ‘monetarism’ (high interest rates) had cured the problem of fast rising prices. So, as high inflation takes hold in the UK economy again, I don’t feel equipped to cope.
Yes, we have occasionally had unpleasant rises in our input prices in recent decades, particularly with items like fertiliser, fuel and machinery, but nothing like we are experiencing now. Ammonium nitrate is obviously the headline item, having increased in price from £240 to over £600 per tonne in less than a year, but the increasing cost of phosphate is nearly as alarming.
The skyrocketing price of red diesel is even more insidious in terms of driving up my costs of production, because nothing moves on the farm without burning the stuff.
Sourcing agrichemicals is just as painful. I’ve already had to alter cropping plans because I couldn’t get hold of either glyphosate or pre-emergent herbicide, but even though I have now managed to source some glyphosate for the spring it’s something of a hollow victory as the price has shot up from £40 to £150 per can.
The problem with arable farming, of course, is that so many of our inputs are derived from energy. Even the manufacture of machinery requires the consumption of huge quantities of fossil fuels and electricity to create the steel, aluminium, glass and plastic from which they are made.
So, there is no doubt that the cost of growing combinable crops is going through the roof. Given how tight arable farmers’ profit margins already were (less than 10% of arable farmers are thought to be viable without the BPS) our only hope is that farmgate arable commodity prices also skyrocket in similar fashion.
Fortunately the news here in recent weeks and months could not have been better, with oilseed rape nudging £600 per tonne and milling wheat prices nearing £300 per tonne – a nine-year high.
Whether or not these price rises will be enough to compensate growers for their rising costs of production is anyone’s guess. But, in the short term, my own farm’s likely profit for the year has not been helped by my rash decision to sell out my entire crop of feed wheat for January collection for £210 per tonne only to see the spot price rise to £228 the next day. Welcome to the joy of riding the tiger that is inflation.