• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Consumers Have Been the Winners With Many Food Prices FARMING

Posted on: Saturday, 16 July 2005, 12:00 CDT

CLAIMS made earlier this week that increased food prices have been a principal factor in pushing up the rate of inflation to its highest monthly level for seven years, were vigorously disputed yesterday by NFU Scotland.

City analysts claimed that the price of strawberries, grapes and meat were contributing to a rise in the consumer price index from 1.9% to just over 2%.

Scott Walker, a senior policy director with NFUS, said: "It is important to look at the bigger picture. If one looks at the rates over the last 10 years, we can see that food price inflation has risen at a rate well below the general rate of inflation.

"In addition, farm gate prices have increased at an even slower increment.

Clearly, the figures, as reported this week need to be taken in their full context."

The Meat & Livestock Commission has recently published figures, based on information from the Office for National Statistics, which suggest that in real terms the cost of a wide range of foods has never been lower.

Taking 1987 as the base year with a score of 100, the all-food index just a decade ago had slipped to 91.9. Never in a single year since 1995 has there been any increase in real terms.

As of May 2005, the rating had slipped to 80.7. However, there has been a noticeable rise in the cost of eating out, including restaurants, canteen meals and the ever expanding take-away sector.

The beef industry is hugely important to Scotland, and while the 1987 retail base was 100 points, by 1995 that had dipped to 89.7.

Farmers have been up against falling prices since, and many will recall that in 1995 they were receiving close on 230p per kilo deadweight for prime cattle. Current prices are barely better than 205p per kilo.

The consumer has been the winner with a current score of 69.7 points, and there has been a similar story with poultry.

Lamb is one of the few products which is actually more expensive when account is taken of the true nature of the retail price index. Dairy farmers, struggling with low milk prices, will be concerned that the real value of cheese has fallen from the 1995 rating of 103.4 to 89.

Source: Herald, The; Glasgow (UK)

More News in this Category