The impact of the hot summer is expected to propel the price of staple goods such as milk, cheese and bread in the latter months of the year, according to leading pricing analysts.
Simon Kucher & Partners has warned that milk and cheese prices will be driven up by supply shortages resulting from depressed yields across Europe in the summer, combined with the declining UK dairy industry.
It has calculated that the number of UK dairy farmers has fallen from more than 25,000 in 2000 to 13,600 in 2018, which it attributes to low milk prices.
The hot summer resulted in many farmers resorting to using forage stocks intended for winter.
“The supply of milk always falls in the latter half of the year as cows move indoors, so expect milk and cheese prices at the till to move upwards, mirroring the significant increase seen in the recent price of butter – you pay 17.6% more at the supermarket now than you did this time last year,” said senior director Rosalind Hunter.
Poor wheat and maize harvests will push up the prices of bread and cereals, but also meat in the longer term as farmers pay more to feed their animals, the company added.