Prices paid to farmers increased by 4.1% in September compared with the previous month, while farm costs crept up by 0.8%, leaving a 3.2% increase in what the CSO calls terms of trade – the headroom for farmers to make margins.

However, over the past year, farmgate prices have dropped by 1.5%, while costs rose by 6.5%.

The CSO recently forecast that the terms of trade for farmers would be much tighter for 2018 as a whole – before taking into account the changes in volumes of inputs and outputs.

Milk, cattle, potatoes up

The monthly increase in producer prices was driven by milk, with a 7% jump in September prices. Cattle and potato prices were also up, but sheep and pig prices decreased. Poultry and egg prices were stable.

Feed drove the rise in costs, with a 1.7% monthly increase. Fuel and fertiliser also contributed, as they were 1% dearer in September than in August.

Over the past year, feed prices have jumped by 8.5%, while fertiliser and energy costs show double-digit inflation.

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