Food prices on the rise

Date: 12/09/18

Food prices on the rise

The impact of the long hot summer has already seen prices begin to rise in the supermarkets, and according to the experts, this is just the beginning.

Throughout the summer, farm gate prices have been steadily rising across a wide range of produce, from carrots (up by 80%) and onions (up by over 40%) to dairy produce such as butter (up by 24%). This follows the long, wet winter and the late cold snap of the Beast from the East, followed by what has now been confirmed as the hottest summer on record in England.

According to the British Retail Consortium, this drove food price inflation up from 1.2% in May to 1.6% in July, with the Agriculture and Horticulture Development Board predicting prices will remain higher right the way through until next spring. DEFRA goes even further, predicting that the price implications of the hot weather could continue for much longer, with price rises taking up to 18 months to fully feed through into inflation.

The Centre for Economics and Business Research estimates that the overall price rises will cost consumers around £45m per week, or £7.15 per household per month, with vegetable and dairy prices set to rise at least 5% and meat prices proving even more uncertain.

In the short term, meat prices are expected to drop slightly, as farmers sell off stock early to reduce their winter feed bills, but in the long term, the increase in feed costs will inevitably be reflected in higher prices.

And it’s not just dairy farmers who have been affected. The hot weather had the effect of reducing sow fertility, forcing piglet prices up by 8%, a rise that will inevitably feed through to the supermarket shelves.

From the consumer’s point of view, it would appear that farmers are making more for their produce, but nothing could be further from the truth. The higher prices are little consolation to farmers who are facing significantly increased costs. NFU president, Minette Batters estimates some farmers will face £60,000 of extra costs, as their winter feed stores are already ‘effectively bare’ due to poor grazing conditions. Increased food prices will help a little but not nearly enough. “The situation on the ground is hugely challenging across all sectors,” explained Ms Batters.

At Kilco, our expert team are on hand to offer whatever help Britain’s farmers need to face these challenges, from cost effective feed supplements, to full biosecurity programmes that help prevent any further hits to productivity, yield and running costs.

With hot summers predicted to be the norm in the coming years, it is essential, now more than ever, that we work together to make our farms as efficient and effective as possible.

Talk to the Kilco team today to see how we can help your business survive and thrive.

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