Farm input costs across the UK rose by 8.6% in the year to August 2026 while the prices farmers received for their produce fell by 5.4%, according to official figures published by the Department for Environment, Food and Rural Affairs (Defra).
The Agricultural Price Indices for August 2026, released on 29 October, show input prices now running ahead of farmgate prices. The input index moved above the output index in April 2026, ending a period that began in December 2023 in which output prices had stayed ahead. On the 2020 baseline of 100, the input index stood at 137.9 in August against 134.6 for outputs.
The sharpest rise came in plant protection products, up 47.6% year on year, followed by energy and lubricants at 23.3%, straight feedingstuffs at 19% and fertilisers and soil improvers at 13%. Defra said that plant protection products and energy each added 2.1 percentage points to input inflation, and that no input category pulled the index down.
On the output side, livestock producers bore the brunt. Milk prices fell 17.3%, the largest single drag on the output index, while potatoes dropped 31.9%, pigs 14.7% and cattle and calves 7.1%. Arable farmers fared better, with wheat up 15.6%, barley up 11.6% and fresh vegetables up 10.1%, FarmingUK reported.
Defra cautioned that most input figures remain provisional, that plant protection data may be revised more than usual while its weighting method is reviewed, and that the indices track prices rather than profitability, which also depends on yields, volumes and individual business circumstances.
The figures arrive in a difficult autumn for dairy. Freshways has cut its milk price by 7p a litre, and First Milk has held its price at 39p a litre for a third consecutive month. In the Budget on 28 October, the Chancellor announced the suspension of import tariffs on fertiliser and kerosene heating oil and a six-month extension of the temporary cut in red diesel duty.
For rural communities, a widening gap between farm costs and farm income bears directly on local spending, employment and the case for diversification. FERN will continue to track how the squeeze is felt across rural economies in the months ahead.
