MSN: Inflation may be down but food prices will rise again

WTF?_2

From MSN Money.

http://money.uk.msn.com/investing/articles/nicklouth/article.aspx?cp-documentid=14072716

What? £1.30 for a cucumber!
Inflation may no longer be seen as a big problem now we're in recession, but it only takes a quick trip around a supermarket to remind you that the high food prices of the summer have not gone away.

Fresh fruit and vegetables, dairy products, fruit juices and meat still remain much more costly than a year ago. The sinking pound has increased the cost of imported foodstuffs too. Perhaps it isn't surprising then that the Retail Price Index of food prices rose 11.9% in the year to December, even as the broader RPI fell to 0.9%.
..
A look at the price charts of rice, wheat and maize (corn) all show the same trend, a falling back from the peaks of last year, but still an upward path.
..
However, exhortation is never as effective as inducement, and nothing quite matches the inducement power of prices. As prices rise, we automatically take more care about our spending, and food is no exception. With a recession too, prices bite even harder.We can already see it in changing patterns of food consumption, and the rise of the discount chains like Aldi, Lidl and Netto.

We can see it in increased demand for allotments, where 100,000 people are waiting for the chance to grow their own vegetables. It can be seen too in the recovery in livestock farming profit margins, where previously 63% of farms were not making sufficient money for long-term investment.

The era of cheap food is over, there seem little doubt about that. If that helps us to appreciate a little more the sustenance that the earth provides, then the £1.30 cucumber won't be wholly a bad thing.

I think quite a lot of readjustment of lifestyles and priorities on the way as we get this situation landing on us at the same time as a nasty financial crisis.

Cannon_Fodder

Is it Aldi or Lidl running the "don't change your lifestyle, change your supermarket" adverts ?

If the supermarkets progressively undercut each other, they'll go the way of the banks, eventually.

Then food will get REALLY expensive. Either in price, or in petrol as you visit all the shops that are no longer local...

Or would the "Government Cooperative" superstore chain produce food efficiently?

WTF?_2

They'll just print more food.

Aspiring

!!!!!!? wrote: »

They'll just print more food.

:rotfl::rotfl: :rotfl:

kennyboy66_2

!!!!!!? wrote: »

From MSN Money.

http://money.uk.msn.com/investing/articles/nicklouth/article.aspx?cp-documentid=14072716

I think quite a lot of readjustment of lifestyles and priorities on the way as we get this situation landing on us at the same time as a nasty financial crisis.

Then again,

"Annual inflation fell to 0.5% in December, helped by another fall in food prices, according to British Retail Consortium (BRC)-Nielsen Shop Price Index.

Year-on-year inflation dropped from 2.5% in November, the index showed, while annual food inflation dipped from 7.1% to 6.2%.

Fresh food inflation fell to 6.8% and ambient food to 5.2%.

Retailers are continuing to absorb "a degree of inflationary pressure", the BRC and Nielsen said, as the Producer Price Index of output prices in November rose 5.1% year-on-year."

Or this;

From http://www.effp.com
"Food price inflation in Britain could fall dramatically from the December 2008 position of 10.4% to 0% or below (where an actual reduction in food prices would be seen) by the end of 2009 according to English Farming and Food Partnerships (EFFP).
The results, generated from the latest run of their Retail Food Price Forecast, reflects consumers increased 'pursuit of value', driven by the economic slowdown, combined with falling cereal and oil prices feeding their way through the supply chain."

The ONS Food price index in May 1993 was 132.2, in Dec 2008 it was 188.4.

Equivalent to an annual increase of 2.4% over the period.