Inflation poses crop protection threat

Farmers should budget for inflationary rises in the cost of crop protection products during 2010, according to the AtlasFram Group, one of the UKs largest farmer-owned farm inputs purchasing and crop marketing business.

Experts believe crop protection products will show an inflationary increase compared with 2009 as very few active ingredients are now produced in the UK, which means that prices of finished products are at the behest of currency rates and global market conditions.

John Humphreys, arable products manager for the AtlasFram Group, said: "Manufacturers of crop protection products are now releasing recommended prices for the season ahead.

"Because sterling has not strengthened in value against the euro to the level which some might have hoped for, prices of product manufactured in Europe are coming under pressure and can be expected to increase by at least the rate of inflation. Compounding the effects of exchange rates fluctuations are a range of other global factors. The main one is Chinas economy, which is expanding at record levels of seven to 10 per cent annually, creating greater demand from within the country and pushing up the prices of some active ingredients produced in the Far East.

"One of the key issues for farmers this year will be timing their purchases of crop protection products to obtain the best value, but the difficulty for any individual business is deciding at what point to commit. One of the many benefits of being a Member of AtlasFram is that we have a specialist purchasing team who are in constant contact with the markets and can advise members when to buy, an aspect of our offer which we anticipate will be very important this year. Some products, for example, have already been negotiated at a lower price than 2009 and an early commitment will be important."