Figures for December from the United Nations Food and Agriculture Organisation (FAO) confirm that global food prices have returned to normal. Inflation is largely out of the system, with prices dropping.
1.5% from November to December. The figures were influenced by some big falls for sugar and vegetable oils. Meat prices also fell, mainly because demand for pigmeat from Asia has dropped, while dairy and cereal prices saw gains. But all in all the figures point to a welcome return of price stability.
We can now look back on the months of hyper-inflation in food prices and that hindsight confirms that while the price rises at the farm level looked impressive they did not deliver gains for farmers. For consumers the cost of living crisis was real and in a few months, it changed food markets.
People traded down and it is now a huge challenge to rebuild premium brands. Without success in this area, the drivers are not there to deliver improvements in prices for farmers. This will be a key element in the £160 million EU food promotion programme for 2024. As the dust settles on food price inflation questions remain unanswered around why consumers continued to face rising prices long after prices fell for farmers.
We saw in the brilliant drama about the Post Office that one key question never answered was where the money went. Equally with food prices, we do not know who gained from high prices, not least for dairy products, when farmers were back to losses. This week there have been new headlines around the affordability of infant formula, yet milk prices to farmers are only bottoming out now after months in the doldrums.
These are questions that have been avoided through the food price inflation pain. If farmers want to be seen to be on the side of the consumers they should stop waiting for politicians to ask these questions and ask them on behalf of consumers. Someone has to have gained from what happened to food prices. We know it was not farmers and they and consumers have a right to know 'where the money went'.
Food prices pale into insignificance when the media gets its hands on yet another gloomy report about rising temperatures. This week the BBC crunched numbers from EU data, produced via its Copernicus climate change programme, to show that average global temperatures rose last year to make 2023 the hottest year ever recorded. This came with a warning, despite us being in the first week of the new year that 2024 is likely to be even worse.
We even had a reporter seeking to gloss over China building an average of two coal based power stations a week to claim it was actually at the forefront of renewable technologies because it is building more wind turbines than any other country. In any numbers game, China will always come out on top because of its vast geographical size and population. The reality remains that it is responsible for more than a third of greenhouse gases and has not matched the rest of the world in its actions to deliver net zero by 2050.
However, that is the price we all pay for being able to click online and buy cheap products from China. This is a serious issue, but all the pain being forced on society here and across Europe will not change global realities while the big sources of greenhouse gases continue to get a free pass, for economic reasons, in the case of China, or for geopolitical reasons in the case of Russia.
Despite that reality, the coming months will bring more pressure on EU agriculture to reduce productivity, particularly in the dairy sector, to achieve progress towards 2050 net zero. We are already seeing production cuts being enforced in the Netherlands and Ireland and this will affect other member states as the nature restoration legislation farmers came so close to defeating last year comes into play.
With Brexit, the government finally has a chance to strike a different course to Europe on how net zero is achieved, but it lacks the imagination to deliver truly radical solutions. Like not wanting to be weaned off cheap China imports, people do not want to lose the ability to enjoy out of season fruit and vegetables or cheap meat to reduce their carbon footprint and support local farming and a different road to net zero.
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