Dairy, meat and cereal prices set to soar

Meat prices will hit an all-time high due to the cost of animal feed rising. Vegetable, sunflower and olive oil prices will rise as a result of crop failures in European countries, and dairy product prices will grow due to an increase in the desire for UK produced milk. Food experts are concerned at the amount of corn in particular being used for biofuels such as ethanol instead of growing it for food. The trend for using biofuel has caused animal feed prices to soar which in turn hikes up the price of meat. The overall price of food has risen to twice the inflation rate; and continues to rise at 5%. The UK's household expenditure for food is now 8.9 percent compared with 22.3 percent 40 years ago, so consumers are being warned to dig deeper as prices go up. Figures also show that over the last year, the cost of bread has risen by 11p and minced beef has gone up by 23p. Droughts in Australia and the US have slowed supply, which is struggling to keep up with strong consumer demands. These demands are added to by the switch Chinese consumers are making to a more westernised diet. And according to reports in the Telegraph newspaper, producers are having to pay the highest prices for ingredients in 14 years. The other major impact on prices will be caused by the continuing shift towards healthier diets, where prices will plummet, affecting less healthier snack markets such as fizzy drinks and frozen ready meals. Canned food will also see a decline in price, due to popularity decreasing. Therefore supermarkets will be forced to discount prices to drive volumes.