For the 2nd half of 2021 and 1st half of 2022, the economists expect consumer prices for unprocessed food to rise by 2.6 percent and 3.8 percent and for processed food by 2.5 percent and 4 percent, respectively.
This year, consumer prices for food and beverages rose relatively moderately by 0.9 percent in the first half of the year, whereas the world market prices for agricultural goods in July were 41 percent above the previous year’s level, according to economic researchers. “Experience shows that food prices react to changes in the price of agricultural goods with a certain delay,” write the Wifo study authors Josef Baumgartner and Franz Sinabell in their analysis.
Even the agricultural producer prices for plant-based products in Austria had already risen by 16 percent in the first quarter of 2021 compared to the previous quarter, which is much more than the seasonal pattern of previous years, according to economists. The falling trend in international agricultural, food and luxury goods prices since autumn 2012 came to an end in mid-2020 in the wake of the corona pandemic. Within a year there was a massive price increase and the price levels of the second half of 2012 – the highs since the late 1980s – were almost reached.
In the second half of 2022, the increase in consumer prices for food is then expected to slow down. For the full year 2021 and 2022, Wifo economists in Austria anticipate an annual increase in consumer prices for unprocessed food by 1.9 percent and 2.6 percent and for processed food by 1.6 percent and 3 percent, respectively.
Baker want to raise prices in the fall
The Wifo economists have not made a price forecast by product group. The chairman of the Association of the Baking Industry, Michael Bruckner, recently announced likely price increases for bread and pastries in the autumn. The reasons he gave, among other things, were higher grain prices, more expensive spare parts for baking machines, the higher standard consumption tax, which is reflected in small trucks for delivery.
For dairy products, dairies and food retailers have been grappling with price increases for months. The milk processors want a significant price increase because the production costs and the milk money paid to the farmers have increased, as they recently emphasized to the APA. According to the industry magazine “Top Agrar”, only Hofer of the large supermarket chains has reached an agreement with the dairies, but only to the extent of 50 to 60 percent of the price increase of 5 to 7 percent demanded by milk processors.
Spar boss Fritz Poppmeier cannot understand the price demands. “It may be that individual farms take too little, but that has nothing to do with supermarket prices. We have a system problem here,” said Poppmeier at a press conference on Tuesday. The Association of Austrian Milk Processors (VM) demands “more self-reflection” from Spar, Rewe and Hofer, who together hold a market share of around 85 percent. “It must not only be about adding value to the trade, but the dairy farmer and his dairy must also be able to survive and earn something,” said VM managing director Johann Kltringer. It is hoped that the price negotiations will be concluded soon.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
