The fall in annual inflation to 4% last month has surprised many financial gurus, but the most surprising thing from a farming viewpoint was that lower food and drink prices were the cause.
In fact, the Office for National Statistics said the 1.4% decline was the “largest ever” monthly fall in food and non-alcoholic beverages prices, with the most significant drops in the fruit and bread & cereals categories, down 4.7% and 2.6% respectively.
Coming at a time of generally firmer commodity prices, especially for wheat, the ONS said supermarket discounting was largely responsible for keeping a lid on shop prices.
That may be good news for shoppers, but it highlights the growing disconnect between what happens at the farmgate versus the tills. Times may be tough, but I dearly hope farmers aren’t left to pick up the bill for this supermarket discounting.
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