Producer prices for industrial products are exploding. For the farmers, the costs increase dramatically.
Producer prices for industrial products have risen more than ever since the surveys began in 1949: plus 25 percent. The reason is the tremendous price explosion for natural gas, electricity and crude oil and all other energy sources. “This was the strongest increase compared to the same month last year since the survey began in 1949,” said the Federal Statistical Office on Monday .
The producer prices in industry are considered an important indicator for the future development of purchase prices in agriculture for operating resources and primary products as well as for consumer inflation. In the statistics, these prices are determined from the factory gate – i.e. before the products are further processed or sold.
Industry: Not reached the end of the road
According to the statisticians, the main reason for the high producer prices was again energy. At the beginning of the year, they rose in price by an average of 66.7 percent. Natural gas cost 119 percent more than in January 2021, electricity was two-thirds more expensive and light heating oil prices rose by 55.6 percent.
The German industry association BDI expects the burden of high electricity and gas prices to continue to rise . “The end of the road has not yet been reached,” BDI President Siegfried Russwurm told the Handelsblatt on Monday. It is to be feared that the rapid rise in prices will increasingly affect production in Germany.
“The situation is so serious that even local medium-sized companies from various sectors have to think about relocating abroad.” Of course, farmers cannot do that. Unless they give up production entirely. Russwurm continued: “The federal government must finally make a clean sweep of national taxes and surcharges , such as electricity taxes and grid fees.”
Price drivers: fertilizers, wood and food
If you factor out the energy, the producer price were still 12 percent above the previous year’s value. In addition, the intermediate goods that are particularly important for farmers cost almost 21 percent more than a year ago. The increase in prices for fertilizers and nitrogen compounds was particularly dramatic : namely at plus 67.4 percent.
The price for raw materials such as pig iron and steel also rose very sharply by 51.5 percent. Industrial prices for softwood lumber were also 52.8% higher than in January 2021. Here, however, prices have already fallen by 24.2% since their peak in August 2021.
Basic chemicals – also for the agricultural sector – cost 30.6 percent more, pesticides ( crop protection ) were 9.1 percent more expensive and industrial gases cost 43.8 percent more. Food was also 8.4% more expensive than in the previous year. The prices for untreated vegetable oils rose particularly sharply by 58.5% and butter by 61.1%. Beef was 20.5% more expensive, dairy products as a whole went up 14.5% in price and grain flour rose 20.6%.
Agricultural machinery 6.2% more expensive within a year
Prices for capital goods are also 5.3% higher than in the previous year. The last time there was such a large change compared to the previous year was in December 1982.The rate of change for the price of machinery had the highest impact on the rate of change for capital goods compared to January 2021 with a plus of 6.0%, followed by motor vehicles and motor vehicle parts (+3.8%). Parts and accessories for data processing machines cost 21.2% more, metal constructions 20.1%.
After all, the prices for food machinery have risen by 6.9% and agricultural harvesting machinery has also risen very significantly by 6.2% year-on-year.
