The Spanish countryside raises prices by 16%, the third highest increase in the EU, despite lowering its inputs by 8%
Spanish farmers and ranchers raised their sales prices by 16.2% year-on-year in the second quarter of the year, the third sharpest increase in the European Union, despite the fact that the inputs they need in their production process became 8% cheaper. % year-on-year, according to data published this Tuesday by Eurostat.
This means that although Spain is the ninth country in which the costs of goods used in agricultural production decreased the most (fertilizers, electricity, fuel, feed, etc.), our country was the third country in which the price increased the most. farm workers are paid at the door of their farm, something that the community statistics office attributes to the drought suffered this year. In fact, the two countries that registered increases in agricultural prices higher than Spain were Portugal (where they became more expensive by 21.8%) and Greece (+20.9%), also very affected by extreme weather conditions, while on average in the EU the increase was 2.4%.
This is the increase in prices at origin, to which must be added the increase that has occurred in each of the links in the chain until the product reaches the final consumer.. Given that there is a time lag between when the agricultural product leaves the field and until it is purchased in the supermarket, it is possible that this increase in prices reaches the customer some time later.
Although a year-on-year increase of 16.8% is a considerable increase in price compared to the previous year, the inflation of agricultural products has been moderating in recent quarters: between January and March of this year they were 33.2% more expensive than in the same period of the previous year; in the fourth quarter of 2022 they rose 26.1%; in the third, 34.4%; in the second, 18.8%, and we must go back to the first quarter of 2022 to find a lower decrease than the current one (15.6%).
The agricultural products in which Spain has registered a price increase higher than the European average have been citrus fruits, which have become more expensive by 128.7% compared to the previous year, an increase only surpassed by that experienced in Italy (141. ,2%); olive oil, which from April to June accumulated an increase of 69.7% year-on-year, only surpassed by that experienced in Portugal (+72%); or milk, which has increased at origin by 30.4%, the second largest increase after that registered in Greece (31.7%).
Also notable in Spain is the increase in potatoes (49.5%), eggs (37.7%) and pork (+26.8%).
First cost drop since 2020
These increases in prices have occurred despite the fact that farmers' and ranchers' costs fell in the second quarter for the first time since the pandemic.. In fact, Spain is among the countries in which the price of some goods such as electricity has fallen the most, with a decrease of 48.5%, only surpassed by that of the Netherlands (51.01%); or veterinary expenses, which have increased by 2.5%, the fifth most moderate increase in the EU.
Other inputs such as fertilizers fell by 19% year-on-year in the second quarter, while feed became cheaper by 20%, although in other EU countries the decline has been greater.
Although their costs were lower than those they had a year ago, the drop in production caused by the drought has led farm workers to raise their price and charge much more for the product than last year.
Since the pandemic, food has accumulated an increase of 22.8% until 2022, to which must be added the expected increase of 11% for this year and additional price increases in 2024 and 2025, which the Bank of Spain places at 4 % and 2.4%, respectively, with a significant upward risk if weather conditions worsen. These increases mainly affect low-income people, since they allocate a greater proportion of their consumption to food.