Date – The Czech Statistical Office has released data indicating a further decline in agricultural prices, with a year-on-year drop of 13.8% in June and a month-on-month decrease of nearly 1%. This ongoing decline in agricultural prices is part of a downward trend that started in December 2020. Notably, in May 2021, farm product prices fell by 10.2%, marking the first price decrease since February of the same year.

The most significant price decrease was observed in plant production, which experienced a substantial decline of 25.7%. Specifically, the prices of oilseeds fell by 40.5%, and cereals experienced a decrease of 30.4%. However, fresh vegetables saw a significant increase of 55.9% in cost, presenting a notable exception in the plant production sector.

On the other hand, animal production saw an increase in prices, with eggs experiencing a notable rise of 31.1%. Additionally, prices for pork increased by 25.4%, and poultry prices rose by 11.1%. However, milk prices experienced a decrease of 0.5%, and cattle prices saw a decline of 2%.

The ongoing price decline is expected to continue, although the rate of decrease in agricultural prices is predicted to slow down in the coming months.

This situation is concerning for Czech agricultural producers who are facing challenges in maintaining profitability. The continued decline in agricultural prices may necessitate further support measures to ensure the industry’s survival and stability.

Rise in Construction Prices In contrast to the agricultural sector, the construction industry has seen an increase in prices. Construction prices rose by 6% year-on-year and slightly increased by 0.1% month-on-month. Moreover, market services for businesses experienced a year-on-year price increase of 6.1%, though there was a slight decrease of 0.1% month-on-month.

Impact on the Industry The decline in agricultural prices is not isolated to the agricultural sector alone; it has also impacted the industrial sector. Industrial prices have been slowing down since October 2020, and the year-on-year price increase is now at its lowest since February 2021. In June, electricity, gas, steam, and air conditioning prices increased by approximately 20%, while coal and lignite prices witnessed a significant increase of 69.3%. Furthermore, other non-metallic mineral products experienced a price increase of 13.7%. However, prices for coke and refined petroleum products decreased during the same period.

Overall, the downward trend in agricultural prices has raised concerns for the industry and the broader economy. Additional measures may be necessary to provide support and ensure the stability of the farm sector.

Price Changes by Sector The decline in agricultural prices has also had ripple effects on other sectors. In the construction industry, labor prices increased by 6% year-on-year, while materials and products experienced a rise of 1.2%. In the service industry, employment services saw a notable increase of 22%, and programming services increased by 9.5%. Additionally, advertising and market research services experienced a rise of 7.8%, while real estate services saw a price increase of 7%. Ground transportation services also witnessed a moderate increase of just under 5%.

As the Czech Republic navigates the fluctuations in prices across various sectors, careful monitoring and targeted interventions may be necessary to ensure economic stability and support the growth of essential industries, including agriculture and construction.

Article by Prague Forum