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ASB senior rural economist Nathan Penny said while annual inflation had fallen, feed cost inflation, in particular, may fire up again for the rural sector.
"Falling feed price inflation drove much of the overall decline in farm input inflation," he said in a statement.
Annual feed price inflation slowed to 3.7% in the year to March, from the 6.6% annual rise in calendar 2018.
Fuel prices also slowed their march higher over the past year, now being 3.5% higher than a year ago, but having jumped as much as 26% at one stage in 2018, Mr Penny said.
However, looking at the year ahead, Mr Penny expected farm input price inflation to "reignite".
"We anticipate that rising dairy prices will lift the demand for feed, and thus lead feed prices higher," he said.
ASB had forecast the 2019-20 milk price to rise to $7 per kilogram of milk solids.
Potentially offsetting a rise in feed prices, Mr Penny said a key exception was likely to be wages.
"Wage pressures are likely to remain modest this year, but at the same time finding good farm workers will remain a challenge for the sector," he said.