Food prices forecast to rise 3.8% in 2014
Food prices are expected to rise more slowly in 2014 than they did in 2013, but will still run ahead of the consumer prices index (CPI) measure of inflation.
That's the forecast from procurement specialist Prestige Purchasing, which predicted a rate of food inflation of 3.8% for the coming year. In 2013, it ran at 4.2%.
Although the slowing of food inflation offers some good news for caterers and restaurateurs, with the prices of chicken and pork in particular expected to drop, the 2014 rate of food inflation is still expected to be considerably higher than the CPI measure of inflation, which currently stands at 2.3%.
Prestige said that 2013 had seen particularly high inflation due to poor harvests as a result of volatile weather, as well as the horsemeat scandal. Fruit in particular was badly hit by the weather in 2013, with inflation rates in excess of 10%.
Unpredictable weather in 2014 means that prices will continue to rise, with weather affected grain and grape harvests in particular, pushing up the prices of alcoholic drinks.
David Read, chief executive of Prestige Purchasing said: "Unpredictable weather patterns caused by climate change, an ever-increasing global population, rising production costs, commodity futures trading and water scarcity is putting a lot of pressure on food prices around the world. And it isn't going to stop any time soon. It's imperative that the food service industry takes steps to ensure that these costs are not simply passed on to consumers, but find ways to safeguard a quality dining experience."
Winners and losers in food inflation in 2013:
Beef: The horsemeat scandal earlier this year means that traceability has been an important issue this year. Supermarkets have started buying in more UK-reared beef, pushing up prices. Combined with the rising costs of production, this has been keeping prices high.
Mature cheddar cheese: This has been rising an average of 13% year-on-year because of limited milk supply and shows no sign of abating.
Salmon: After years of rising prices due to changing sea temperatures and shorter fishing periods, costs are starting to stabilise as high prices are labelled as unsustainable by buyers.
Wine: Prices have increased by 16% year-on-year. While 2013 harvests were better than the previous year's, the industry is still recovering from very poor harvests in 2012, keeping prices high in 2014.
Chicken: The cost of feed corn for poultry is expected to fall by up to 20% next year, which will in turn mean the price of chicken breasts fall by 5-7%.
Soft drinks: Coffee and tea prices are set to rise due to poor harvest, monsoons and political turmoil, particularly for East African coffee growers.
