Grain Prices: Crop Failures Push Food Cost Up
Consumers are expected to be hit by widespread food price hikes because crop failures have forced Britain to import foreign grain, the cost of which is at an all-time high.
Experts have warned that wheat and barley prices are set to climb even further in the coming months, with knock-on effects hitting many food and drink items.
The Financial Times said analysts have warned that "everything from bread and biscuits to beer to beef" would rise in price.
Britain normally grows more wheat than it consumes but poor harvests this year have forced traders to import, for the first time since 2001.
The head of wheat procurement at the parent company of breadmaker Hovis has also warned of the significance of the grain shortfall.
"The domestic situation is more worrying than in 2007-8 during the global food crisis," Premier Foods' Gary Sharkey said.
"And we are starting to worry about next year's crop because farmers have sown less wheat than expected."
The Home Grown Cereals Authority has forecast that the UK will import more than two million metric tons of wheat in the 2012-13 season.
Numerous countries were hit with protests and riots during the last crisis as the price of flour, a staple for most societies globally, rocketed.
This year, the global grain harvest has been hit by drought in the United States and reduced output from vast fields in the Black Sea region.
In addition to flour production being hit, grain is used by farmers to fatten livestock ahead of slaughter.
Last week, the futures market for feeding wheat reached £227 a metric ton, a rise of 45% since January.
Feed wheat is the benchmark price used for wheat produced for human consumption.
Meanwhile, feeding barley, some of which is used in beer and liquor production, has increased 25% - to £190 - in the same period.
The growth in biofuel has also increased demand as the UK crop was hit by adverse weather in 2012.
The FT said total wheat demand would rise 7% because of ethanol production coming online at the Vivergo plant near Hull and the restarted Ensus plant on Teesside.