⁉️ Why are food prices still rising?
Food prices have surged in recent years, and the latest figures show food inflation climbing again to 5.1% in August. What’s struck me is how much of the coverage (including the BBC News’, linked below) has echoed the food industry’s pre-budget talking points: blaming higher minimum wages, employer NICs, and things like packaging taxes for keeping prices stubbornly high.
Yes, those factors matter. But they don’t tell the whole story.
When you dig into the data, two things stand out:
[1] The price rises are concentrated in a small group of foods
[2] The production of these foods have all been hit by extreme weather, made more likely by climate change
🚨 Foods affected by extreme weather are rising over four times faster than everything else 🚨
Prices for butter, beef, milk, coffee and chocolate have jumped 15.6% in the past year, compared with just 2.8% for other food and drink. These items make up only 11% of a typical shop, yet account for nearly 40% of total food price inflation.
As highlighted in the Bank of England’s August Monetary Policy Report ‘…dry weather conditions are pushing up the production costs of beef and some dairy products in the UK and elsewhere, as cows must be fed silage earlier in the year due to less grass growth.’ Alongside a major outbreak of bluetongue hitting milk production in Europe, the risk of which is known to be increased by climate change, this has tightened the availability of milk and cream, pushing up prices.
It’s not just homegrown food. The UK imports around 40% of its food. Cocoa prices have more than tripled in three years after extreme heat and flooding devastated harvests in West Africa.
Similarly, coffee prices spiked sharply through late 2023 and into 2024, driven by droughts in Brazil and Vietnam. According to the FAO, it takes around a year for these shocks to hit consumers — and the effects linger for at least four.
So yes, labour and tax policy play a role. But if we only point fingers at wages and regulation, we miss the bigger picture: a food system already buckling under climate disruption.
Central banks are clear that climate change increases food prices in ways they cannot control or predict, creating systemic risk to our food system. There is no monetary policy lever they can pull to address this.
🌍 Only by reducing our emissions to #netzero and bringing balance back to our climate will we limit the impact of climate change on food prices in the future.
- Full Energy and Climate Intelligence Unit analysis: https://lnkd.in/dmAX9pv6
- Financial Times write up here: https://lnkd.in/dqujt9RV
- DailyMail.com: https://lnkd.in/dN_yGq2w
- BBC piece: https://lnkd.in/diuQbpdD