Agri Market Outlook: January 2022
David Eudall, AHDB Economics and Analysis Director
Economists say that inflation is transitory. Interest rates and money supply shifts in reaction and it settles back down. However, the timing of inflation is critical, and while it may prove transitory, the impact of the current inflationary period may have far reaching consequences for UK agricultural markets.
We are currently seeing a period of inflation that is coming off the back of a shift in trade relationships with our largest trading partner, a supply chain that is struggling with the impact of a global pandemic and we enter a period of direct subsidy reductions.
So again, inflation may be transitory, but we’re facing it at possibly the worst time. What it all means is a period of higher costs for farming businesses, and although commodity prices are sitting at high levels, we know that the markets are cyclical and this can change quickly.
As ever, our message is understand your business, the market pressures faced and plan for the future. Not only does our bi-annual Agri-Market Outlook offer the chance to take stock and look ahead, we are also providing free half-day consultancy advice as part of Defra’s Resilience Fund. It’s time to look ahead at the challenges we face for our industry.
Take a look at this quick reference guide for an update on key market prices and trends across all sectors.
It should be noted that the information in these outlook reports is based on information currently available but still involves risks, variables and uncertainties. Agricultural markets are highly volatile, often unpredictable, and unforeseen factors can have a major impact on production and prices. Consequently, no guarantee is given to the accuracy of the outlooks, but they are simply put forward as our best estimates at the time of publication.