Lower food prices on the horizon after 18 months of increases, experts say
After around 18 months of paying more and more each time you visit the grocery store, hope is on the horizon. The prices of some key food commodities, like grain and various dairy products, have been falling for some time. And that should translate to the prices in the supermarket, RTL Nieuws reports after speaking to experts in the food sector.
“If raw material costs remain lower, we will certainly see that in the supermarket prices,” Nadia Menkveld, agriculture and food economist at ABN Amro, told the broadcaster. Some products, like butter, margarine, and pork, are already slightly cheaper this month.
“For me, that is the signal that a turnaround is coming,” Thijs Geijer, food sector economist at ING, told the broadcaster. He thinks bread and related products, milk, and dairy products will particularly become cheaper.
However, Menkveld added that cheaper food commodity prices couldn’t be directly translated into cheaper food. The costs of many products consist of several factors. “For example, pasta is not only grains but also energy, labor, packaging, and transport. Some of those prices are falling, but others are going up,” she said.
Meat and egg prices may also fall as animal feed becomes cheaper. And certain vegetables - tomatoes, peppers, cucumbers - will also cost less, though for other reasons. “These vegetables are always a bit more expensive in the winter because less is grown. This winter, the cold in Spain and the high gas prices in the Netherlands caused the price to rise even more. Now that we are heading towards summer, more is coming from Spain and Dutch greenhouses,” Geijer explained.
It may take a while before supermarket prices really start decreasing. There is often a period of three to four months between raw materials becoming cheaper and that price decrease reflecting in the store, Geijer said. But that differs per product. The grain used in cookies was often harvested months ago. But fresh milk came from yesterday, so those prices should fall quickly.