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Last Updated : Oct 11, 2012 03:23 PM IST | Source: ft.com

Farmers warn food prices set to rise

Food prices are set to rise after farmers warned that this summer's poor weather has resulted in the worst wheat harvest since the late 1980s.


Food prices are set to rise after farmers warned that this summer's poor weather has resulted in the worst wheat harvest since the late 1980s.


Record rainfall in June, July and August, which followed a prolonged drought, depressed the wheat harvest by 14 per cent on average, according to the National Farmers Union.


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Guy Gagen, chief combinable crops adviser at the NFU, said the situation could have been even worse without "considerable investment by our farmers in recent years".


"Investments in grain drying and handling facilities have been vital, while improved combine harvester capacity meant significant progress was made when breaks in the weather allowed," he said.


Shoppers will find the cost of their shopping basket rising not only due to pressure on bread prices but because crops are used to make animal feed, so meat and dairy prices are also likely to be affected. Fruit and vegetables could also cost more after the sodden summer created difficult planting conditions.


England's largest wine estate said this week it would let its entire harvest of grapes wither on the vine as a result of the cold and wet weather, and the production of Cox apples was down after the miserable conditions hampered pollen-carrying insects.


The poorest households will be worst affected. Falling real incomes, after housing costs are taken into account, and rising food prices reduce food affordability more than 20 per cent for lowest income households, the Department for the Environment, Food and Rural Affairs estimates.


The UK's food output is only a small percentage of the global market, but its wheat price is at a record high. Wheat prices are up all over the world, mainly as a result of the drought in the US and Russia and because crops across northern Europe suffered a soggy harvest.


"The poor UK harvest compounds a series of challenging weather events for farmers around the world, most notably drought in North America," said Mr Gagen. "The resulting tight supplies of many feed grains have driven up the prices of agricultural commodities around the world."


The disappointing news from farmers follows a warning from J Sainsbury of higher prices this Christmas and a shortage of festive food. The supermarket said it would experiment with selling "ugly" vegetables, which do not measure up to standard sizes and shapes, to maximise use of crops.


Farmers urged the whole UK supply chain to work together to recognise the extra costs resulting from the poor harvests.


"The volatility that we have been experiencing in feed costs recently has been unprecedented and is likely to stay," said Tom Hind, director of corporate affairs at the NFU. "Feed is the single biggest cost to poultry producers and many are reporting to me the significant outlay they are having to make to purchase feed compared to last year."

However, despite the disappointing wheat yields, some crops fared better. Oilseed rape yields were up 5.9 per cent and farmers reported barley crops for malting were good.

First Published on Oct 11, 2012 07:05 am
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