Soaring fertiliser costs helped push up sheep and beef farm costs by 7.6% in the year to March 2009, the second largest increase since 1986-87.
Meat and Wool New Zealand's economic service executive director Rob Davison said the rise was led by fertiliser, shearing expenses, repairs and maintenance.
Excluding interest costs which fell, the underlying rate of inflation for the year was 10.7%, the highest since 1985-86.
The cost of fertiliser, lime and seeds rose nearly 38% in the year to March, but since then, fertiliser costs have fallen 11% due to easing international prices.
Mr Davison said shearing costs rose 14.7% due to farmers shifting to annual shearing and away from the more frequent second shearing, but the change came at a higher labour cost.
Without the extra costs from that management change, Mr Davison said basic shearing and woolhandling costs rose between 3% and 4%.
Repairs and maintenance costs rose 8.9%, insurance 8.7% and rent 8.3%.
Fuel and interest have previously led farm inflation, but Mr Davison said both costs fell for the year, fuel by 14.2% and interest by 6.7%.
In the past five years local Government rates and charges have risen 33.8%, an average of about 6.8% a year.
The consumer price index for the past five years was 14%, while sheep and beef farm input prices over that same period rose 22.7%.
While still rising, the average increase in local Government rates and charges across the country this year was 5.6%, the lowest rise since 2004-05.
