By Becky Barrow and Jason Groves
28 August 2012
Families face punishing food price rises triggered by a catastrophic U.S. drought, experts warned yesterday.
They said the American crisis is forcing up the global price of crops used to make staples such as bread and pasta.
Meat is also tipped to cost much more because animal feed costs have soared, again because of the drought.
The miserable summer in the UK has made the situation worse because even common vegetables such as potatoes and peas are having to be imported from as far away as South Africa, Guatemala and Israel.
British farmers say heavy rain and lack of sunshine has decimated or delayed harvests.
In the U.S., more than 35 states have declared disaster areas due to drought. Arable land covering an area larger than Belgium and Luxembourg combined has been abandoned.
A spokesman for the British Retail Consortium said: ‘The drought is not yet having an impact but it will work through to meat prices because of the price of animal feed and ultimately to things such as bread and pasta.’
One Tory MP warned last night that high food prices were already having a severe impact on millions of families, with some parents forced to skip meals to feed their children.
Incomes are under huge pressure from inflation that has been above the official target for many months. Fuel bills are predicted to rise this winter with some suppliers already putting up their charges.
The food price threat is a blow to George Osborne’s election strategy, which focuses on bringing inflation under control. Tory high command believes it can win the economic battle with Labour in 2015, despite the double dip recession.
But party strategists warn it is essential to get real incomes rising again.
‘We need to get inflation under control so that people start to feel a bit better off again,’ said a source.
‘We can make the case that the deficit is unfinished business, but without some sort of feelgood factor we are in trouble.’
The BRC says food price rises have slowed to 3.1 per cent over the past year compared with a high of 10 per cent in 2008.
Stephen Robertson, the consortium’s director general, has warned ‘the relief may not last’ because the poor US harvests are ‘creating a build-up of inflationary pressure’.
PARENTS ARE GOING HUNGRY TO FEED THEIR CHILDREN, MP SAYS
Soaring food prices are forcing many parents to go hungry in order to feed their children, a Tory MP warned last night.
Laura Sandys, MP for South Thanet, warned the era of cheap food could be drawing to a close, with potentially serious consequences for many families.
Miss Sandys, whose Kent constituency contains pockets of severe deprivation, said: ‘We’ve got to understand that this is really impacting families, certainly in my constituency, who have got the lowest incomes and these families are actually making choices that are undermining their family’s nutritional intake.
‘Sometimes parents are skipping meals regularly just to feed their children.’
Speaking on BBC Radio Four’s World at One programme, Miss Sandys said Britain needed to ‘change our attitude and possibly some of our policies in relation to food’.
She said supermarkets should be encouraged to stock cheaper ‘ugly fruit and vegetables’ to make healthy food more affordable.
And she suggested ministers should encourage the big retailers to do more to help the poorest customers eat healthily.
‘Public health information must also incorporate cost – the cost to the family,’ she added.
He pencilled in poultry and eggs for further hikes.
Around two thirds of American farmland is in mild or extreme drought, according to the BRC. Corn production has been especially badly hit in a country that is responsible for nearly half of the world’s exports of the staple.
Yesterday the price of soya beans – another key U.S. export – hit an all-time high.
Soya beans and corn can be made into oil and animal feed, as well as fuel ethanol, but they are also found in snack products, fast food and soft drinks.
The drought has led to calls for the G20 group of leading industrialised economies to hold an emergency meeting to tackle the world food supply problem.
Jose Graziano Da Silva, who is the director general of the UN’s food and agriculture organisation, said yesterday: ‘We need co-ordinated action and I believe that the G20 is responsible enough for this action.’
The threatened price rises will hit families struggling to survive the worst recession for decades.
According to analysts at Incomes Data Services, private sector workers are getting average pay rises of 2.5 per cent – below the 2.6 per cent level of inflation.
Millions have been hit by at least one pay freeze since the downturn began in 2008 and others have been made redundant or lost out on over-time or extra shifts. The Office for National Statistics puts annual food price inflation at 2.4 per cent but with beef costing 10.5 per cent more than a year ago.
The third price surge in four years has come after the drought in the US and poor crops from Russia and the Black Sea region.
Senior figures from the G20 will discuss the food price rises this week, but any decisions on action are unlikely before a mid-September report on grain supply, officials have said.
Mr Da Silva said he would not characterise the situation as a crisis, but it could reach that level next year if harvests in the southern hemisphere disappointed.
He said that even if wheat prices rose 10 to 20 per cent that did not mean bread prices would rise by the same amount.