With Britain’s official rate of inflation reaching a 40-year high in July, it eased a bit to 9.9% for August 2022 due to petrol and diesel prices falling slightly [Source: ONS]. However, the latest reports suggest that UK inflation will continue to rise, even reaching as high as 18.6% in early 2023 as a result of the dramatically rising energy prices [Source: Reuters].
Food inflation in Britain is also at its highest level in 14 years as the war in Ukraine continues and production costs for farmers rise. The cost of food in the UK increased 13% in August over the same month the previous year, which means that food prices are outpacing overall inflation [Source: Trading economics]. The prices of milk, cheese and eggs are among the biggest upward contributors to this; these products having seen the sharpest price increases [Source: ONS].
Meat & Poultry
The cost-of-living crisis has compelled consumers to purchase the lowest-price meat protein due to its relative affordability, however data shows the average retail price of chicken has increased on average by 12% since this time last year [Source: ONS]. Fresh chicken prices are expected to remain firm as input costs such as feed and energy prices have risen and are expected to stay high into 2023 [Source: Birtwistles August 2022 Market Report].
Similarly, pork prices have been steadily increasing throughout 2022, driven by the continued rising cost of energy and fuel prices and feed prices. As the price increases for soya, wheat and corn, all of which are used in pig feed, the price of UK pigs has risen by 27% since this time last year [Source: Grocery Gazette website]. Expect to pay higher supermarket shelf prices for popular pork products such as sausages and bacon into 2023.
Beef prices have shown some downward movement since the beginning of July as slaughter numbers have been generally higher and are looking like they will remain steady until the end of this year [Source: AHDB].
Fish & Seafood
There is expected to be a weaker demand for seafood in the second half of the year compared to the first six months [Source: Rabobank]. Production costs, however, are expected to remain high throughout 2022 and into 2023.
Prices of farmed salmon have increased on average by 40% from one year ago [Source: Trading Economics]. However, the price of salmon has decreased by 12% on average in the last few months [Source: NASDAQ Salmon Index]. Although the current price for salmon is still significantly higher than a year ago, it is predicted that price will continue to fall throughout Autumn and into Winter [Source: Fish Pool].
There have been significant price rises for whitefish such as cod and haddock this autumn, as well as strong concerns about supply. This is due to a few factors, including the UK-imposed 35% tariff on whitefish imports from Russia and Belarus. As well, fishing boats have been hit by increasing fuel costs and vast labour shortages [Source: The Grocer website]. As raw material availability is in very short supply, prices for cod and haddock are high and are expected to remain so until at least early 2023.
Dairy Produce (Milk, Butter, Cheese)
The UK dairy industry has been hit hard due to severe increases in the processing costs, a stable demand, and an unprecedented summer heatwave. Milk production levels have fallen to the lowest it’s been in five years, with production levels currently 1.5% lower than for this period last year [Source: AHDB].
Throughout 2022, the steepest price increases have been for dairy products. Specific products that have seen the sharpest increases are low-fat milk (34%), whole milk (28%), butter (27.1%), cheese (17.9%), yoghurt (14.2%) and ice cream (12.9%) [Source: ONS]. Prices for all these key dairy products have been consistently increasing and it is expected this will continue until at least 2023 as the strong demand continues and supplies remain tight.
Fruit & Veg
The price of potatoes has risen in recent years, however, this year’s harvest is projected to be the worst in decades after the hottest and driest summer on record. Tt is predicted that growers will soon be swapping out potatoes in favour of more lucrative crops amid the high energy prices. This means consumers can expect to see retail prices continuing to rise throughout Autumn 2022 [Source: Country Land and Business Association]. Recent data shows that potato products such as chips and frozen potatoes have seen a price increase of up to 20-30% with further increases expected.
There is growing concern that in the transition from Dutch to Spanish produce, growers may be forced to use less gas to heat their greenhouses due to the increased energy costs. A national supplier has indicated that many growers will be forced to finish the season earlier than expected and this could result in price increases as well as reduced quality and quantity of key fresh produce items – namely tomatoes, cucumbers, and peppers.
Consumers have already seen the price of tomatoes rising significantly, and products such as chopped and plum tomatoes have seen a price increase of around 60%. The most affected tomato product is tomato paste rising in price by 110% compared to the same time last year [Source: BBC].
The price of rice is also increasing due to consumers choosing rice over wheat products. Rice production is much higher than this time last year and is projected to hit record highs in 2023, meaning consumers can expect to see a big increase in rice prices in Autumn through to next year.