Producer Prices Plummet Amid Rising Input Costs
· GıdaTarım
According to TurkStat data, the Agricultural Input Price Index rose 32.06% year-on-year, while the Agricultural Producer Price Index (PPI) stood at 9.55%; the widening cost gap is pressuring producer incomes.
Partial Relief in Input Costs Month-on-Month
According to the latest data published by the Turkish Statistical Institute (TurkStat), the Agricultural Input Price Index decreased by 0.92% month-on-month in June, while showing a 32.06% increase on an annual basis. This monthly decrease in the index, which has been rising continuously since January 2023, was recorded as the lowest June figure since 2015. Examining sub-categories, veterinary expenses decreased by 3.32%, energy costs by 2.61%, fertilizer by 2.10%, and animal feed costs by 1.44%.
Sharp Decline in Producer Prices
Despite the partial decline in the input index, the Agricultural Product Producer Price Index, reflecting direct sales from the field to the producer, showed a sharp monthly decrease of 9.02% in June. On an annual basis, the increase in the Agricultural PPI remained only at 9.55%, falling significantly behind the 32.06% annual rise in input costs. According to TurkStat data, the nine-fold faster decline in product sales prices compared to the limited decrease in input prices has deepened the real income loss for rural producers.
Price-Cost Gap Widens Against Farmers
Official indicators for the first half of the year reveal a continued loss of profitability for producers. Over the six-month period since the beginning of the year, producer input costs climbed by 16.92%, while the sales price of the crops they produced increased by only 7.73%. This indicates that the price-cost gap widened by a net 9.19 points against farmers in the first half of the year. The decline in profitability despite high supply continues to negatively affect the sustainability of agricultural enterprises in rural areas.