The cost of food could be 10 per cent higher by this Christmas, due to the reduced amount of winter feed that farmers could harvest. Soaring animal feed prices will cause foods like cheese, milk, pork and beef to spike and hurt all of our wallets.
With something as pervasive as food requirements for a country, food inflation could be so inpactful that it causes the “double dip” recession so many have feared.
A 20 per cent increase in the price of raw material, coupled with a 30 per cent increase in the cost of wheat makes it very difficult for farmers to stay competitive with their current prices to grain store distributors and others. In this scenario, everyone gets squeezed, not just the end consumer, said BOCM, Britain’s biggest animal feed supplies.
Food producers are already hurting as they have been hit by increases in prices of palm oil, corn, and soya oil. These are all common ingredients.
Although its possible to seek these ingredients abroad, traditional sources like Russia are experiencing the same issue.
Drought has affected Russia, expecting to halve exports, raising even more concerns about food inflation in the UK.
Tom Vosa, chief economist for the Clydesdale & Yorkshire Banks said: “We expect to see an acceleration of food prices and a return to double digit increases by early next year if the situation does not change.”