The cost of food isn’t rising at anywhere near the rate that prices were shooting up last year and this has been a significant factor in bringing down inflation, which fell to a two-and-a-half year low of 3.2% in March. The obvious hope is that the worst is behind us but there are unsettling warnings that Brexit and bad weather could combine to re-kindle food price inflation.
According to the Energy and Climate Intelligence Unit (ECIU), UK harvests of key staples could fall by nearly a fifth this year as farmers have battled to establish their crops in the one of the wettest winters on record. The ECIU’s analysis of data from the Agriculture and Horticulture Development Board estimates that the amount of wheat, barley, oats and oilseed rape could drop by four million tonnes, a decline of 17.5% compared to 2023.
The impact of warmer, wetter winters is a particular concern for the UK’s wheat harvest, with the ECIU saying that production could go down by as much as 26.5% compared to last year. Milling wheat, which is used to make bread, will likely be hit particularly hard because it must meet higher quality requirements that are more difficult for farmers to achieve in poor weather conditions.
READ MORE: Scotland's climate change happening faster than predicted
This led one of the UK’s biggest bread makers, Kingsmill owner Associated British Foods, to warn last week of potentially higher prices. Speaking as the company unveiled its interim results, chief executive George Weston said the group had not increased its food prices in the past six months following a hefty period of inflation last year.
But he also added: “One to watch out for is UK cereal. The harvest in July and August may be very small and we may be importing quite a lot of grain to the UK and that will come at a cost.”
Meanwhile, an anticipated drop of 37.6% in the production of oilseed rape in the UK is coinciding with poor harvests in southern Europe, as well as the continuing effect of war on sunflower crops in Ukraine. Prices for domestic and commercial cooking oil are therefore expected to rise in the coming months.
According to the Met Office the UK provisionally recorded more than 445mm of rainfall this winter, 129% of the average between 1991 and 2020. It was particularly wet in the north-east of Scotland where farming is widespread, but the impact has been significant everywhere.
READ MORE: We need lasting solutions to our problems with food shortages
Colin Chappell, an arable farmer from Lincolnshire, describes the situation as “very hit and miss”.
“It’s had a massive impact on us,” he said. “We went through the winter with virtually nothing viable drilled, and while it’s now dry enough to plant some fields some of them are so bad I don’t think they’ll get drilled this year.”
Tom Lancaster, a land analyst at ECIU, said there’s a “real risk” that the price of bread, beer and biscuits could increase as the poor harvest leads to higher costs and increased imports. Hauliers are warning that the latter is set to become a more expensive process regardless following the introduction of new Brexit border rules that take effect from today.
The new rules include compulsory inspections of goods and additional paperwork requirements that will affect hundreds of thousands of consignments of “medium-risk” products that include fresh and frozen meat and fish, dairy goods, and eggs.
The Cold Chain Federation (CCF), which represents operators bringing 20,000 lorry loads of fresh and frozen produce into the UK from Europe each week, expects many suppliers will stop exporting to the UK at all – particularly small artisan producers. Those that do continue could see up to £1,000 added to the cost of one multi-consignment lorry, and a significant proportion of those costs will likely be passed on to consumers in the form of higher prices.
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“We can also expect cost increases and food wastage as a result of unnecessary delays, disruption and paperwork confusion, because cold chain operators and their EU customers are still waiting for clarity in a number of areas about what they will actually need to do,” CCF chief executive Phil Pluck warned last month. “We are still waiting to hear from government about how some key parts of the new process will work, and we have serious concerns about the readiness of the border control posts.”
The new system has been delayed five times since Brexit and there is still a great deal of uncertainty about the scale and cost of inspections due to issues with border computer systems. Only higher-risk goods will be subject to checks initially, but there is neither a definitive list confirming which items fall into this category nor a timetable for when others will be added.
William Bain, head of trade policy at the British Chambers of Commerce, sums up succinctly with his observation that while the government did consult on the new changes being introduced, it “chose not to listen” with the size and scale of costs showing “scant regard to the interests of either businesses or consumers”.
READ MORE: ‘Horrendous and chaotic’ border checks will increase food prices, ministers hear
“A flat rate fee for bringing most animal and plant products into the UK is a hammer blow for small and medium importers,” Mr Bain said. “It’s also deeply concerning for retailers, cafes and restaurants.
“Importing a small consignment of goods with only five different meat, poultry, egg, milk or some fish products in the ‘medium risk’ category will now face a bill of £145 per package under these proposals.
“The government should immediately exclude firms in the trusted trader scheme from these charges which would give many smaller businesses some relief. But in the long-term, these checks and costs should be done away with by reaching an agri-food deal with the EU, something we have consistently called for.”
There is little that can now be done to minimise the impact of increasingly inclement weather, at least in the short-term of the next few years. Surely it is therefore sensible to take charge of what is within human control by forging trade agreements that eliminate unnecessary costs.
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