The large farmer protests in Germany last week were kicked off by the government’s plan there to phase out tax breaks on agricultural diesel.

Closer to home, data released on Monday by the Central Statistics Office shows why farmers everywhere are so sensitive to movements in the price of the fuel.

The numbers published show that consumption of marked gas oil (MGO) - also known as green diesel - rose from 1bn litres per year a decade ago to approximately 1.15bn litres in the 12 months to November last.

During that time, the price of MGO remained relatively stable until 2020, after which it became particularly volatile.

However, extreme increases in the price of fuel had little effect on demand. Between November 2020 and November 2022, the price of fuel rose a whopping 61%, yet consumption also rose very slightly (up 1.3%) in the same period (see Figure 1).

It is hard to think of any other product where such a movement in price would leave demand almost completely untouched.

The clear conclusion from this data is that sales of MGO have almost nothing to do with the price of MGO.

Or, to put it another way, farmers will buy the same amount diesel no matter what the price is. This means farmers are very exposed to any movements in the price of MGO.

It also goes a long way to explaining why farmers everywhere are so angry about any increase in fuel costs.