News

08 - May - 2008SPIRALLING INPUT COSTS

The spiralling costs of farm inputs such as fuel, fertilizer and feed were high on the agenda for discussion at the May meeting of NFU Cymru members in Meirionnydd.

Huw Alun Evans, NFU Cymru Meirionnydd County Chairman said, “The recent price increases in beef cattle and sheep are rapidly being eroded away by massive hikes in the price of inputs such as fuel, fertilizer and feed.

“Farmers as primary producers are at the bottom of the chain and there will come a critical point when higher prices will result in reduced demand for our products and the margin between sales and expenditure will tighten to squeeze profitability even more.

“Fuel prices in rural areas are again higher with over 10p/litre difference between petrol and diesel.  The farming industry is totally dependant on 4 x 4 vehicles to get the job done and yet again they are being penalised by government with massive increases in road taxes on vehicles registered after March 2001 – the tools of our trade. NFU Cymru is currently involved in discussions at UK Parliament level for a genuine working vehicle deregulation for our vehicles.”

The cost problem was clearly highlighted by a NFU Cymru member present at the meeting.  In 1987 diesel was 26.5p/litre and lamb prices on the farm averaged £29. 

In 2007 lamb on the same farm averaged £22 and diesel is now £1.23/litre.  Mr Evans concluded, “Clearly continued increases in input costs are unsustainable and government whilst not able to control the cost of crude oil can influence taxation levels on fuel.”

-ends-