What drives up food prices


OF Of all the negative consequences of inflation, it is the rising cost of our food that is likely to hit households the hardest.

Prices are up in virtually every area of ​​our spending, leading to inflation data well above target at 5.4% in the UK, but at least some of that is in elements that we can avoid if we really need it. Food expenses are different. You might be able to put off buying a new car or replacing your phone for a while, but the weekly shop must go on.

The Office for National Statistics, which produces inflation data for the UK, confirmed that food and non-alcoholic drinks contributed most to the annual rise in inflation in the latest reading . But dig a little deeper into the numbers and you’ll see that the contribution has been concentrated in just the last few months – something that won’t surprise anyone visiting a supermarket recently.

And the rise in food prices is unlikely to stop there. John Allan, chairman of Britain’s biggest grocer, Tesco, warned over the weekend that while his company had managed to keep food price inflation in its stores at 1% for the past three months, shoppers should expect another 5% increase by spring.

The cruelty of rising food bills is that low-income people are likely to spend a higher proportion of their income on them, so price hikes hurt them the most.

Behind the rise in prices at the supermarket checkout are a multitude of factors and causes. We’ve grown accustomed to disrupted supply chains during the pandemic that have caused inflation on virtually every item, but even more is happening when it comes to food.

At the most fundamental level, food is becoming more expensive for farms to produce for reasons unrelated to the short-term disruptions of the pandemic. Climate change has increased the number of weather events recorded as disrupting food production, including last summer’s droughts that impacted wheat production in Canada, Russia and the United States.

We have produced an animated graphic to illustrate the rising cost of food production around the world, which helps illustrate these effects over time.


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