Meat price rises slow
The era of cheap food may be over. In recent months food prices have risen at a faster rate than inflation, but meat prices have risen less than those for other commodities.
In October 2007 it was an increase in vegetable and fresh milk prices that contributed most to a 5% annual rise in overall food prices. However meat was only 2% more expensive than a year earlier. Higher prices for poultry and processed meat products compared with 2006 offset lower prices for beef and lamb.
The combined agricultural costs of production between January and September this year were 6% higher than a year ago. Higher grain costs have pushed up feed costs for livestock producers, and rising oil prices are now starting to filter through to producers' energy costs.
Higher food prices are not unique to the UK: in September the world food price index was a third higher than a year ago. As well as tight world grain supplies impacting on agricultural commodity prices, higher petrol prices, increased freight charges and exchange rate movements are also influencing prices.
These are just some of the observations made in a special feature on food price inflation in the December issue of Meat Demand Trends, a quarterly publication produced by MLC Economics' team of analysts.
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