Farming costs have fallen by 4.7pc in the last year, according to analysis by Norfolk-based buyers - but it warns farmers are still "being cut out of the profit chain".
The AgInflation Index is generated using data from purchasing co-operative AF Group, based at Honingham Thorpe, outside Norwich, which sources more than £250m of agricultural goods every year on behalf of its members across the country.
The latest analysis shows a "welcome" fall in the overall cost of farming inputs, which dropped by 4.7pc on average in the year ending September 30.
But while major costs such as electricity, fertiliser and fuel dropped by 58pc, 49pc and 15pc respectively, four of the ten categories showed increases - including farm office operating costs rising by 11pc and crop protection costs up by almost 10pc.
And the aginflation report says while the gap between costs of production and retail prices has narrowed, "it is still double what it was a decade ago" - with the total food Retail Price Index rising by just over 12pc during the same period.
It gives examples including sugar beet, whose production costs have increased 7.15pc in the year to September 2023, while the retail price of granulated sugar to UK consumers has increased by 51.32pc.
The cost of dairy farming has dropped 9.4pc, but this has been "more than eroded" by reductions in the milk price paid to producers, says the report.
And AF says beef and lamb costs have reduced by 5.24pc, "but the retail price of minced beef and lamb has increased by nearly 11pc, indicating again that farmers are being cut out of the profit chain, with retailers keeping a disproportionate share of the price increase for themselves."
For potatoes, production costs fell by 6.08pc compared to 2021/22, but the increase in farmgate prices did not match the previous year’s aginflation.
But for East Anglia's wheat, barley and oilseed rape growers, average costs fell 2.09pc, while retail prices for bread and margarine increased by 1.89pc.
"These figures are encouraging given the movements in fertiliser and fuel costs over the last couple of years, but mask the anticipated effects of the very difficult 2023 harvest and autumn," says AF's report.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here