Higher food prices could be the ‘new normal’

Ireland could be moving to a “new normal” of paying higher food prices, Professor Thia Hennessy of University College Cork has said.

Speaking at last week’s Agricultural Science Association (ASA) conference, she said that what is being seen now is the impact of the huge concentration of global food supply chains.

The price of chocolate was a big issue earlier in the year, she said, particularly at Easter.

“That got a lot of attention, and you can trace that back to the world becoming completely reliant on three or four countries around the equator for cocoa beans, where the crop failed in that particular year. So that diversity has gone out of the system.

“The level of stocks that were held previously has gone on system with more extreme weather events. So, we’re just much more vulnerable, I think, from a food price perspective, than we were a generation ago,” she said.

Bord Bia CEO Jim O’Toole commented that it takes some time for high prices, such as the current high beef prices, to work through the system.

“We need to be mindful of the fact that food price inflation is significant, is out-running general inflation,” he said.

He said it was certainly a first for farmers to be called out as the root cause of higher foot prices and warned that the sector needs to be careful of the impact of that.

“One of things we need to think about is whether consumers drop out of the category, if the prices are too high,” he said.

The Bord Bia boss said food price inflation comes against the backdrop of geopolitical uncertainty.

“And I know people are taking it for granted now, but you know, even though the referendum on Brexit happened in 2016 – the impacts of that are still working through the system,” he said.