Food inflation remains one of the biggest issues facing UK consumers and food businesses right now. Contributing factors are global crises, local climate, and the changing demand of consumers. With inflation rates skyrocketing, the impacts are disproportionately felt by low-income families. These households tend to spend a higher percentage of their budget on food, intensifying the struggle to adapt.
Lewis Clare runs an organic family farm north of Manchester that has been in the family for 250 years. His third-generation, 160-acre farm in northwest Iowa grows organic oats and raises pastured pigs. As a result, Clare has repeatedly scrambled to reinvent his business model. This welcomed and long-awaited change is a response to the new reality after Russia’s invasion of Ukraine. He no longer raises hens for eggs but has since turned his energy towards his other crops and livestock.
Weather will increase costs significantly too,” Clare said. He illustrated the difficulties he is forced to deal with from the impacts of extreme and erratic climate conditions. He does not foresee any letup, with prices continuing to surge. Sorry to say, I think it’s bound to increase more,” he said. Clare underscored the reality that farmers may be the first to feel the effects of global disruptions. These impacts don’t find their way to consumers until six to 18 months later.
Added to that is the added impact of the still-ongoing war in Ukraine that has worsened supply chains and made everything more expensive. Further compounding the crisis, drought conditions across the UK have caused crop yields to plummet this year. Extreme weather events in other parts of the world have led to increased wholesale prices for essential goods like coffee beans and cocoa.
Jane Matthews, the ops director for The Ice Cream Farm in Cheshire, mirrored Clare’s worries over increasing costs of business. Her business is forever taking up the slack on rising costs for labor, food, and energy. Matthews saw a marked change in visitor behavior with more consumers choosing farm picnics. She explained, “People will come with their home picnic and bring an additional piece to it like a bag of chips for the kids.”
To adapt to these changes, Matthews has embraced this trend in hopes that customers will still spend money at her establishment. She said, “So we’ve kind of adopted that … in the hope that they will continue to spend here.” Perhaps most importantly, she understood the larger economic context. She stressed, “You need to do these things now and commit them down the line to continue to progress, or you will be unable to hire new employees or sustain this level of operation all year long.”
The latest inflation data indicates that food and non-alcoholic drink prices have risen by 4.9% in the year up to July. This increase is most strongly felt by low-income families. They often pay a much higher percentage of their income on food. Inflation continues, leading more people to have to spend less on discretionary things such as fast food and entertainment like casual dining. Instead, they’re opting for smaller splurges, such as coffee or one or two chocolate bars.
Commenting on the financial pressures families are feeling today, AJ Bell financial analyst Danni Hewson said …As she noted, the majority of Americans are living on a budget, managing their own car payments, mortgages and/or private school tuition. These economic obligations determine their quality of life and ability to address the growing burden of expenses.
This last point was further underscored by Clare, who explained the agricultural sector’s unique sensitivity to global events. It’s farmers who always are first to feel it. Be it an extreme weather event or the earthquake-like tragedy that is the war in Ukraine, they are the ones who have to deal with it. This compounded vulnerability leaves farmers to deal with today’s crises while preparing for tomorrow’s consequences on consumers.