Agricultural Price Indices - February 2018

Price quotations are collected in a monthly inquiry. There are multiple methods of survey including postal survey, phone, email and the CSO's secure deposit box response system. The price quotations relating to individual concerns are treated as strictly confidential and are not divulged in an identifiable form by the CSO to any other Government Department or outside body. The agricultural prices section would like to express appreciation to all respondents for their continued co-operation.

The Laspeyres index formula, involving the use of fixed base year weights, has been used in the compilation of the monthly index numbers for all commodity groupings except vegetables, potatoes and sheep. Since the weights used are based on average values of sales, not on quantities, the following adapted Laspeyres index formula is used:

I_t = Σ_j W_jo (P_jt / P_jo) x 100

I_t = Σ_j (base period value weight x price relative)_j x 100

Where

I_t = the overall index in month t

W_jo = (P_joQ_jo) / Σ_j(P_joQ_jo)

(i.e. the base year value weight of item j)

P_jo = the price of item j in the base year (i.e. the average price in the year 2015)

P_jt = the price of item j in month t

P_joQ_jo = the average annual sales/purchases of item j around the base year (i.e. the average value of sales / purchases in the years 2014 to 2016)

P_jt / P_jo = the “price relative” of item j for month t compared with the base year

With the exception of vegetables, potatoes and sheep the price index of a given commodity j in month t is given by the expression:

 P_jt / P_jo x 100

i.e. the price relative multiplied by 100.

As vegetables, potatoes (i.e. early and main varieties) and sheep (i.e. lambs and hoggets) are highly seasonal commodities, it is not appropriate to use fixed annual weights when calculating these price indices. Accordingly, an approach using variable monthly baskets is used for these sub-indices. The composition of each monthly basket is based on the monthly pattern of sales of vegetables, potatoes and sheep respectively averaged over the three years 2014 to 2016 inclusive. The monthly index is then calculated using the following formula:

I_mt = (Σ_iQ_imoP_imt) / (Σ_iQ_imoP_io) x 100

i.e. (value of monthly basket at reference month prices/value of basket at average base year prices) x 100

where:

I_mt = price index in month m in year t

Q_imo = quantity of vegetable i / potato i / sheep i in basket in month m in the base year 2015

P_imt = price of vegetable i / potato i /sheep i in month m in year t

P_io = weighted annual average price of vegetable i / potato i / sheep i in the base year  2015.

Output Price Index

(i) Index with base 1911-1913 as 100
The first regular series of annual agricultural output price indices were published in 1929 with base 1911-1913 as 100. There were two series, one for Ireland (Republic) for the period 1911-1928 inclusive and one for All Ireland for the period 1840-1928 inclusive. These were base weighted Laspeyres type index numbers. In 1930 the All Ireland series was discontinued and the Ireland (Republic) series was reweighted using the then newly available 1926/1927 output quantities. The base reference period of 1911-1913 was retained.

Monthly agricultural output price indices to base 1911-1913 as 100 were introduced in 1931 with indices from January 1922 onward being prepared. Shortly after this, annual sub-indices from 1922 onward for livestock, livestock products and crops were also published.

(ii) Index with base 1938/1939 as 100
In 1943 a new series of monthly and annual indices to base 1938/1939 as 100 was introduced. The indices were calculated using the Fisher “Ideal “ formula.

(iii) Index with base 1953 as 100
In 1956 this index was rebased to 1953 as 100.

(iv) Index with base 1975 as 100
The Laspeyers index formula was adopted again on the introduction in 1978 of the 1975 based index numbers. This change was made in order to align the Irish series with those in use in other EU member states. This index series saw the introduction of further sub-indices (cattle, sheep, pigs, milk, etc.).

(v) Index with base 1980 as 100
In 1985 this series was updated to base 1980 as 100, when vegetables were incorporated in the total outputs index for the first time. For consistency with the practice in other EU member states, the series to base 1980 and subsequent rebasings were compiled exclusive of VAT.

(vi) Index with base 1985 as 100
In 1988 this series was updated to base 1985 as 100

(vii) Index with base 1990 as 100
In 1995 the series was updated to base 1995 as 100. This was the last series published using the national farm concept. When an agricultural price index covers only transactions between the agricultural and other economic sectors, treating the whole agricultural sector as a single holding, the coverage is that of the national farm.

(viii) Index with base 1995 as 100
In 2002 the series was updated to base 1995 as 100. For consistency with similar price indices at EU level, the prices used from 1995 onwards were based on the market price concept. The market price is defined as the price received by the producer without the deduction of taxes and levies (except deductible VAT) and without the inclusion of subsidies. In the case of sugar beet, however, the A and B levies were deducted. This series uses the average farm concept which includes both sales to other economic sectors as well as sales/purchases of agricultural output between agricultural units for intermediate consumption purposes, excluding trade in animals between agricultural units.

(ix) Index with base 2000 as 100
In 2004 the series was updated to base 2000 as 100.

(x) Index with base 2005 as 100
In 2011 the series was updated to base 2005 as 100.

(xi) Index with base 2010 as 100
In 2014 the series was updated to base 2010 as 100.

Input Price Index

(i) Index with base 1930 as 100
The first annual series of agricultural input price index numbers were published in 1931. The series was restricted to feeding stuffs, fertilisers and seeds (the so-called Farm Materials Index) and was compiled to base 1930 as 100 using the Laspeyres formula. The weights used were the quantities of feeding stuffs, fertilisers and seeds purchased in 1926/1927.

(ii) Index with base 1938 as 100
In 1943 the Farm Materials Index was discontinued due to insufficient price quotations arising from the very small supplies of feeding stuffs and fertilisers available during World War II. In 1951 a new series to base 1938 as 100, using the Fisher “Ideal” formula was introduced, with annual indices available from 1948.

(iii) Index with base 1953 as 100
In 1956 this index was rebased to 1953 as 100 and a monthly series was introduced.

(iv) Index with base 1975 as 100
The Farm Materials Index was replaced in 1979 by a new series to base 1975 as 100, which covered all non-capital farm materials and services thus introducing many new sub-indices. This series used a Laspeyres index formula with the value of purchases averaged over the years 1974, 1975 and 1976 as weights.

(v) Index with base 1980 as 100
In 1985 indices to base 1980 as 100 was introduced. For consistency with the practice in other EU member states, the series to base 1980 and subsequent rebasings were compiled exclusive of VAT.

(vi) Index with base 1985 as 100
In 1988 indices to base 1985 as 100 was introduced.

(vii) Index with base 1990 as 100
In 1995 the series was updated to base 1990 as 100. This was the last series where the annual feeding stuffs and fertiliser indices were calculated as the weighted averages of the monthly indices.

(viii) Index with base 1995 as 100
In 2002 the series was updated to base 1995 as 100. In line with EU recommendation, from 1995 onwards, the annual input indices were calculated as simple arithmetic averages of the monthly indices.

(ix) Index with base 2000 as 100
In 2004 the series was updated to base 2000 as 100.

(x) Index with base 2005 as 100
In 2011 the series was updated to base 2005 as 100.

(xi) Index with base 2010 as 100
In 2014 the series was updated to base 2010 as 100.

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