Status: 02/13/2023 2:30 p.m
Producer prices are seen as a harbinger of inflation. Whether potatoes, milk or grain – last year the prices for agricultural products rose sharply. The rise in prices was higher than it had been since 1961.
In 2022 as a whole, the prices of agricultural products such as potatoes, grain or milk increased by a third compared to the previous year due to the Ukraine war, as reported by the Federal Statistical Office in Wiesbaden. That was the highest increase since 1961. For comparison: in 2021, prices had risen by 8.8 percent.
The price increase began as early as 2021 – in that year the producer prices for agricultural products climbed by 8.8 percent, as the statisticians reported. As a result of the Ukraine war, they then rose again by 32.9 percent in 2022.
The producer prices are the selling prices of the producers and thus also affect consumer prices.
Cereals and potatoes significantly more expensive
On average for 2022, producer prices for plant products increased by 27.7 percent compared to the previous year. Grain was significantly more expensive last year at 42.4 percent. The price of potatoes even rose by 66.3 percent. On average, the producer prices for fruit were a good ten percent cheaper than in 2021. Here, for example, the prices for table apples fell by 16.5 percent.
Milk prices 45 percent higher
The prices for animal products rose very sharply: milk prices, for example, rose by 44.8 percent due to a tight supply, eggs were 24.4 percent more expensive. Animals became 31.1 percent more expensive. Higher energy and feed costs had an impact on the production of meat and other animal products.
Inflation is weakening
Despite the price increase in 2022, agricultural product prices continued to fall slightly last December. Year-on-year, agricultural product prices started to decline month-on-month in November. Compared to November, prices fell by 0.4 percent in December. Compared to the last month of 2021, however, the price increase was almost 30 percent. However, only vegetable products became cheaper – animal products continued to rise in price.
Inflation still high
In Germany, inflation remained high at the beginning of the current year. Consumer prices rose by 8.7 percent in January compared to the same month last year, as the Federal Statistical Office announced in a first estimate last week. Rising energy and food prices have been driving inflation for months. Higher inflation rates reduce the purchasing power of consumers, who can afford less for one euro.
Economists are currently not expecting a thorough relaxation in consumer prices in the current year. The federal government expects an average inflation rate of 6.0 percent in Europe’s largest economy for the current year.