UK food prices set to see 5% hike due to extreme weather
Extreme weather in the British Isles this year – ranging from a harsh, wet winter and spring to a drought-parched summer – will see food prices soar, according to one UK economic analysis firm.
With the wholesale price of many crops already rising substantially and meat prices set to climb in future months, it seems likely that wholefood prices will rise at least 5%, according to the Centre for Economics and Business Research (Cebr).
Using UK Department for Environment, Food and Rural Affairs (DEFRA) research into the sensitivity of consumer prices to wholesale price shocks, Cebr estimates that the extreme weather will drive up the costs to UK consumers by £45 million per week.
The DEFRA research suggests that commodity price spikes can take 18 months to fully feed through into inflation.
Domestic food production has felt the effects, with wholesale prices for vegetables seeing a marked increase, according to Cebr.
From March to July the farm gate price of a range of veg rose by a fifth or more. These included: onions, up 41%; carrots, up 80%; lettuce, up 61%; wheat for bread, with a 20% rise; and strawberries, up 28%.
Dairy production had also suffered until recently, with the drought halting grass growth. This has seen the farm gate price of butter rise 24% since March, the forecasting firm added.
Cebr expacts the price of red meat to drop marginally in the short run, due to farmers selling livestock earlier than usual to reduce feed costs and land pressure.
However, in the longer run, prices are set to rise as feed availability is affected by a weak harvest.
Imports of grain from mainland Europe, which has also seen record-high temperatures this year, are also expected to be hampered.
On alcohol sales, it was noted that severe hailstorms in the French wine regions of Bordeaux, Champagne and Cognac have wiped out millions of bottles of product.