Whilst food inflation remains in double digits, there is light at the end of the tunnel with the latest ONS statistics reporting a fall in the headline annual food inflation.
The UK reliance on imports to bridge the gap in home grown/produced products such as meat and dairy leaves the us vulnerable to currency fluctuations and extreme weather conditions as recently experienced in Southern Europe this year.
Shortages of labour within the hospitality sector has resulted in changes to working practices and labour-saving purchases such as prep veg to keep costs down and restricting menu size in order to preserve already tight margins.
Prime deadweight cattle prices have remained static over the past few months, although around £200 per MT higher than last August and are experiencing a downward trend. [Source: Mintec]
Reduction in herds in both the UK and Europe has resulted in demand outstripping supply along with increase in costs of production.
Bacon pricing remains high and sources are indicating that pricing could increase by another 10-20%.
Following unprecedented spikes in prices in the early part of 2023, production in the poultry industry has started to return to normal levels and pricing is stabilising, albeit at higher levels previously seen.
Milk, Cream & Butter
After the peak dairy pricing observed at the beginning of 2023, prices since have shown a consistent decline as of June.
Outbreaks of Avian Flu continue to plague the supply chain and producers are nervous in investing heavily in new flocks in case of further outbreaks.
Pricing remain firm and are expected to remain high for the next couple of months.
The salmon market is fairly uncertain, however, the expectation is that prices will decline through October and should be stable until the end of November when demand for the festive period will likely kick in. [Source: Direct Seafoods]
The ongoing war in the Ukraine continues to add additional pressures on Norwegian and other Atlantic fishing areas. Supply of cod and haddock is expected to remain tight as quotas have been reduced in certain fishing areas. Prices are forecasted to remain firm until the end of Q3, beginning of Q4.
Alcohol Duty Increase
The true impact of the new duty rates applied to beverage based on the ABV on 1st August has yet to be realised, with some lower ABV wines/sparkling wines having a reduction in
duty. Industry insights are suggesting that consumers may switch to lower ABV % options to avoid increased pricing.
Last year’s hurricane that hit Florida which impacted crops coupled with crops affected by disease has led to a tightening of the global market. Pricing for the finished product is expected to remain high for the next 12 months.
Over the last 12 months there was a substantial surge in worldwide sugar prices, circa 41.9%. Analysts anticipate additional escalations in the latter part of this year due to a huge production decline in India, Thailand, and China.
Processing potato prices in Europe have sustained their decline following the peak levels that were observed in July 2023. This reduction can be attributed to larger quantities of newly harvested crops making their way into the market.
As the summer months are coming to an end, the volume of tomatoes available has been improving steadily with prices easing back slightly, and it is expected these prices will hold through the autumn.
If you have questions or would like to speak to a team member about pricing or our bespoke procurement services, please contact us.