Extreme weather to cause 5% rise in food prices
The Centre for Economics & Business Research (CEBR) said that domestic food production has been hit by weather extremes that have put “particular stress on farming costs and yields”.
The CEBR predicts that the summer heatwave and freezing cold conditions during the spring will end up costing consumers about £7 extra per month.
This follows previous price warnings from farmers after the wholesale prices of some vegetables soared by up to 80% this year.
Onions on the up
Onion prices are reportedly up 41%, carrots by 80%, and wheat for bread by a fifth. The price of butter has also climbed 24% since March, with hot weather hampering grazing grass growth.
Meat prices are also set to rise due to a shortage of livestock feed.
Speaking about the recent extreme weather, CEBR said: “Summer 2018 has been one of the warmest in living memory, with above average temperatures recorded since April and dry spells lasting more than 50 days in parts of the country.
“While this has made Britain’s weather more conducive to barbecuing, it looks set to raise the price of the food on the grill and the drink in hand.”
Food price fears for operators
Inflation in foodservice prices reached 3.2% in July 2018, the new Foodservice Price Index from CGA and Prestige Purchasing has revealed—extending an upward trend that has seen prices of many food and drink items hit record highs. A study released last year showed that rising food prices were the “number one challenge” for pub operators.
Fiona Speakman, CGA client director within the food and retail team at CGA, said: “The record highs and lows revealed in this month’s edition of the index indicate the volatility of foodservice prices at the moment. Businesses in the supply chain are facing a multitude of issues that are out of their hands, like extreme weather and fluctuations in exchange rates, and their purchasing strategies need to be sharper than ever if they are to soften the inflationary pressures.”
A spokeswoman for the Department for Environment, Food & Rural Affairs added: "Food prices are affected by a number of factors aside from the weather, such as fuel costs, international commodity markets and exchange rates."
