Methodology

Output price index and absolute prices of agricultural products

The source of producer price indices and price data of agricultural products is the monthly questionnaire on the procurement activity of enterprises that acquire agricultural products for processing or resale purposes, and the monthly survey of agricultural crop markets, conducted by the HCSO. Price indices encompass the changes of prices paid directly to agricultural producers for agricultural products processed or resold (procured) or sold directly to households on markets, and exclude the price changes of animal products (young and breeding animals) and fodder crops sold among agricultural producers for intermediate consumption purposes.

Price indices are computed according to the Laspeyres formula. According to EU regulations in agricultural price statistics year 2010 is considered as the new base year in respect of price indices and weighting scheme beginning from the observation periods of 2012. In case of certain aggregates the new weights of 2010 can significantly differ from those of the former weighting scheme of base year 2005. In respect of the calculation of price indices compared to the same period of the previous year the new, ‘2010 fix based price indices’ serve as a computation basis from the reference month of January 2012 onwards, while for prior periods the former ‘2000 and 2005 fix based price indices’ are used. See below a summary table of the weight ratios of aggregates that appear in sheets of the ‘Agricultural producer prices’ First Release.

The monthly price index of an individual item is calculated by dividing the price of the reference month by the average price of the base year. An aggregate index is the weighted average of individual indices. For calculating weights the proportions of base year values (excluding the amount of VAT) of agricultural products sold by agricultural producers to procurement enterprises and directly to consumers (on markets) are used. In case of products sold seasonally only (e.g. sugar beet) and in those periods when no sales activity of these products is recorded, price data are carried forward by repeating the last observed price until new real prices are detected.

In the product group of seasonal fruits and vegetables variable weight product baskets containing representative products are constructed for the 12 months of the year, the structure of which change month by month. The variable weight structure of each monthly basket is fixed until the changeover to the next base year. From the changeover to base year 2010 onwards the annual weights for these products are derived from the Economic Accounts for Agriculture similarly to the former practice, but for the calculation of monthly weights the distribution of three years’ average (2009–2011) monthly turnover data are used. There is an underlying assumption about using the average of three years’ turnover data that in different years the seasonal peaks of different products belong to different months in consequence of the features related to agricultural production (e.g.: differences in weather conditions in different years). As a consequence of this method the change of indices of these two groups of products between two consecutive months reflects not only price changes but also product composition changes. For obtaining aggregate price indices containing all product groups the price indices for fruits and vegetables – calculated according to the above described method – are weighted by applying the same weight (the base year value) in each month.

Agricultural input price index

Agricultural input price indices take into account the intermediate consumption of not only the industrial but also the agricultural sector (e.g. seeds for planting, animal feedingstuffs). The agricultural input price index comprises both the price indices of goods and services used for agricultural production and those of agricultural investment goods.

Among the price indices of goods and services used for the intermediate consumption of agricultural production HCSO collects the sales prices of animal feedingstuffs, plant protection products and veterinary products on a quarterly basis. Since 2009 the individual data collection of HCSO on fertilizers and soil improvers has ceased to exist and it has been integrated into the appropriate data collection of the Ministry of Agriculture and Rural Development, which body now performs this task and whose data are transmitted to HCSO. For the calculation of the price indices of energy, machinery, building maintenance and other expenditure, given sub-indices of the industrial producer price index, the construction output price index and the consumer price index are taken into account. The price index of agricultural investment goods is calculated by taking into account sub-indices of construction output price index and, in case of machinery, sub-indices of industrial producer price index and external trade (import) price index.

Indices are calculated according to the Laspeyres formula. Individual quarterly price indices of products are calculated as a ratio of the price in the reference quarter and the average price of the base year (from 2012 year 2010 serves as base year). The aggregate index is the weighted average of individual indices. For obtaining weights the proportions of base year values (excluding the amount of VAT) of goods and services purchased by agricultural producers from retailers or wholesalers are used. According to the new methodology for the calculation of annual indices the quarterly price indices are not weighted any longer using the value of products sold during the year but the annual value weight is distributed equally over each quarter at product and product group level. See below a summary table of the weight ratios of aggregates that appear in sheets of the ‘Agricultural producer prices’ First Release.

Terms of trade

Terms of trade are calculated by dividing the agricultural output price index by the agricultural input price index.

Notes: released data should not always be considered as final while they may change in a later period of the year because of revisions.