According to Statistics Finland, agricultural producer prices increased by 1% in the second quarter of 2023 compared to the same period last year. Prices for meat and animal products rose by 12%, while prices for plant products dropped by 16%. The significant decrease in the prices of grains and oilseeds had the most significant impact on the index development. Although prices for nearly all other agricultural products increased compared to the previous year, the index remained only slightly positive.
Key Points:
- The price of grains decreased by 35% in the second quarter of 2023 compared to the same period last year.
- The price of oilseeds decreased by 30% in the second quarter of 2023 compared to the same period last year.
- The price of meat increased by 12% in the second quarter of 2023 compared to the same period last year.
- The price of milk increased by 17% in the second quarter of 2023 compared to the same period last year.
There Are Indications of a Slowdown in the Rise of Agricultural Producer Prices There are faint signs of a slowdown in the rise of agricultural producer prices. The annual change in agricultural producer prices was only slightly positive. Additionally, both plant and animal product prices decreased compared to the previous quarter. The prices of production inputs, particularly fertilizers, energy, and feed, have started to decrease. The global impact of drought on crop yield and the situation in Ukraine may, however, lead to a new increase in grain prices and subsequently the producer price index.
The Annual Change in the Agricultural Producer Price Index Turned Positive in late 2020. There were significant annual changes of over 10% from the third quarter of 2021 onwards until the latest second quarter of 2023, where the annual change was only 1%. The quarterly change turned negative for the first time since the second quarter of 2021.
Prices of Grains Plunged by Over a Third In early summer, a good global grain harvest was predicted, and trust was placed in the continuation of the Black Sea Grain Corridor Agreement. This was reflected in a steep 35% drop in the prices of grains compared to the previous year. Prices of feed grains and wheat declined the most: oat prices decreased by 40%, feed barley by 38%, and wheat prices by 36%.
Prices of grains rose significantly after the year 2021, following a year of poor harvest due to the Russian-Ukrainian war. The agreement regarding Ukraine’s grain export route pushed prices downward in the autumn of 2022. Yield forecasts and the prevailing agreement situation continue to impact prices. In the year 2023, grain prices have seen significant declines.
Rise in Milk and Meat Producer Prices Continued The price of milk increased by 17% in a year. For pork, meat producers received 13% more, for beef 12%, and for poultry meat almost 10% more than a year ago. While costs for significant expenses on animal farms, such as feed and energy, have decreased from their peak prices, they remained at a high level.
Steady since 2015, the producer prices of milk and meat experienced a strong increase in 2022 and continued to rise in the first quarter of 2023. The price increase leveled off in the second quarter of 2023.