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Shoppers to be hit by second wave of ‘inevitable’ food hikes in coming weeks, experts warn

  • Milk, egg and tomatoes have already risen in price – and now hikes due on bread and flour 
  • Price hikes in animal feed, energy and fertiliser along with supply chain issues will lead to an ‘inevitable’ rise in food prices
  • Production costs are forcing potato, vegetable, poultry and pig farmers out of business

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Shoppers face a second wave of food price increases, with the cost of a basket of everyday items set to rocket in the coming weeks, industry sources have warned.

Price hikes in animal feed, energy and fertiliser along with supply chain issues will lead to an “inevitable” rise in food prices in the coming weeks and months, according to Paul Kelly, Food and Drink Ireland director.

It comes amid warnings rising production costs are forcing potato, vegetable, poultry and pig farmers out of business.

Organic eggs could also vanish from supermarket shelves as farmers consider reducing production due to soaring feed and energy costs, Teagasc has warned.

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“The poultry situation is on a knife-edge at the moment,” Michael McKeon of Teagasc told the National Fodder and Food Security Committee meeting last week.

Milk, eggs and tomatoes have already increased in price, with industry sources warning customers can expect the cost of a loaf of bread to also climb significantly amid spiralling inflation.

The price of flour is set to rise a further 25pc in the next nine to 15 months, Mr Kelly warned.

“We’ve seen the price of flour increase by 50 to 60pc and gas, the main source of energy for baking, is four or five times more expensive than a year ago,” he said.

Commodity price increases, he said, usually took six months to reach consumers and increased costs in food commodities, energy, transport and packaging were “simply off the scales” compared with to what they were before.

“When that happens is really a matter for individual companies, but I think it will be sooner rather than later at this stage,” said Mr Kelly.

“There has to be an acceptance by everybody in the food chain, from producer to processor to retailer, to final consumer that when you get cost inputs of this level that while everybody will do their best to manage those costs, there’s an inevitability to cost pass through,” he told the Irish Independent.

Damian O’Reilly, lecturer in retail management at Technological University Dublin, said the price of staples such as milk, eggs and tomatoes had already risen in recent weeks and consumers could expect further increases due to rising costs such as freight, energy and wages.

While he said there should be a stabilisation in prices in six to eight months, until then shoppers were facing price hikes.

“Even before the war in Ukraine companies were looking at putting prices up because of inflation internationally,” he said, with supply chain issues in the shipping sector in China and the cost of shipping containers.

Many food manufacturers have increased their prices by five to 20pc and these prices hikes are starting to kick in now. “The retailers have no option but to respond so they’re putting their prices up,” he said.

“The price of milk has gone up, as has the price of eggs.

“Tinned tomatoes have gone up significantly, because some brands are not available due to distribution issues.”

Mr McKeon said the price of organic poultry feed was set to rise by as much as 80pc.

“The poultry situation is on a knife-edge at the moment and if there isn’t a rise in the product price there is going to be less birds,” he said. 

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“If we don’t have them on the ground, we won’t have the produce from them.”

Turkey farmers too, he said, had also seen feed prices rise significantly and they too would reduce their production unless they got a price rise in the region of 14-20pc.

It comes as the Irish Farmers’ Association (IFA) warns that spiralling input costs will lead to less planting of potatoes.

IFA national potato chairman Sean Ryan said with just 300 commercial potato growers left in Ireland “many growers will simply not plant”.

“They had to pay up-front to secure necessary inputs this spring. The planting season is currently under way and already there are reports of growers cutting back on production because of costs.”

A spokesperson for Lidl said it was aware commodities had increased in price and had been engaging with its suppliers to support them.

John Curtin, Aldi Ireland group buying director, said: “We have been working closely with our suppliers and have already provided significant cost support across our Irish supply base in recent weeks, reflecting the cost challenges our farming and food production partners are facing here in Ireland.

“Aldi will always shield our customers from price increases as much as possible.”

Musgrave, which owns Supervalu and Centra, said that like all businesses and households it had been dealing with inflation over recent months and was “working hard with suppliers”.

Dunnes Stores and Tesco did not respond to requests for comment.


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