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| Bringing home the bacon? Price of pork hits two-year high Bringing home the bacon? Price of pork hits two-year high | |
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| Pigs in blankets might have to be rationed round the Christmas dinner table next month after the price of pork hit a two-year high. | Pigs in blankets might have to be rationed round the Christmas dinner table next month after the price of pork hit a two-year high. |
| Analysts are reporting an 18% increase in the wholesale price of pork, with the surge expected to have a knock-on effect on the price of bacon and sausages in supermarkets in the coming weeks. | Analysts are reporting an 18% increase in the wholesale price of pork, with the surge expected to have a knock-on effect on the price of bacon and sausages in supermarkets in the coming weeks. |
| “Pork prices in the UK have risen very fast,” said Rabobank analyst Albert Vernooij. “Setting [shop] prices is up to the retailers but at a certain point you would expect higher [wholesale] prices will be passed on to consumers. There is always a delay.” Vernooij said Britain only produces just over half of the pork it consumes. | “Pork prices in the UK have risen very fast,” said Rabobank analyst Albert Vernooij. “Setting [shop] prices is up to the retailers but at a certain point you would expect higher [wholesale] prices will be passed on to consumers. There is always a delay.” Vernooij said Britain only produces just over half of the pork it consumes. |
| Food manufacturers and retailers are facing multiple problems as they manage the impact of commodity price swings as well as the weakness of sterling following the Brexit vote. According to official figures the price of materials and fuels for manufacturers rose 12.2% in the year to October 2016. There is also evidence firms are passing the pain on to their customers with factory gate prices up 2.1% on the year. | Food manufacturers and retailers are facing multiple problems as they manage the impact of commodity price swings as well as the weakness of sterling following the Brexit vote. According to official figures the price of materials and fuels for manufacturers rose 12.2% in the year to October 2016. There is also evidence firms are passing the pain on to their customers with factory gate prices up 2.1% on the year. |
| The tough conditions are creating friction, with last month’s “Marmitegate” stand-off between Tesco and Unilever the first to spill into the public domain as the supermarket resisted the manufacturer’s attempt to push through price increases. Tesco chief executive Dave Lewis said the retailer is already seeing inflation in certain food categories, particularly pork, but is only willing to tolerate pricing increases from suppliers faced with “legitimate” cost pressures. | The tough conditions are creating friction, with last month’s “Marmitegate” stand-off between Tesco and Unilever the first to spill into the public domain as the supermarket resisted the manufacturer’s attempt to push through price increases. Tesco chief executive Dave Lewis said the retailer is already seeing inflation in certain food categories, particularly pork, but is only willing to tolerate pricing increases from suppliers faced with “legitimate” cost pressures. |
| According to consultancy Mintec, the price of “pig deadweight” – essentially the price farmers receive for slaughtered pigs – is 18% higher than a year ago, at around £150 per 100kg. “Low pork prices earlier in the year resulted in many UK farmers reducing the size of their herds,” said Mintec analyst Emma Smith. “As a result, slaughter levels in the UK were down in September, at 910,500 head – 3% below the same period last year.” | According to consultancy Mintec, the price of “pig deadweight” – essentially the price farmers receive for slaughtered pigs – is 18% higher than a year ago, at around £150 per 100kg. “Low pork prices earlier in the year resulted in many UK farmers reducing the size of their herds,” said Mintec analyst Emma Smith. “As a result, slaughter levels in the UK were down in September, at 910,500 head – 3% below the same period last year.” |
| The surge in the wholesale price will not affect the cost of British favourites such as bacon, sausages and sausage rolls in a uniform way, said Vernooij. Britons’ love of bacon means manufacturers have to import loin to satisfy demand, whereas there is sufficient domestic supply of the belly and shoulder cuts used to make sausages. | The surge in the wholesale price will not affect the cost of British favourites such as bacon, sausages and sausage rolls in a uniform way, said Vernooij. Britons’ love of bacon means manufacturers have to import loin to satisfy demand, whereas there is sufficient domestic supply of the belly and shoulder cuts used to make sausages. |
| Last week, Premier Foods, the group behind brands such as Mr Kipling and Cadbury cakes, signalled price rises were on the horizon as the price of butter soared 80%, while wheat and edible oils were up 40% due to a combination of commodity price rises and currency exchange rate pressure. Its chief executive Gavin Darby said the price of sugar had also risen by 20% to 30%. | Last week, Premier Foods, the group behind brands such as Mr Kipling and Cadbury cakes, signalled price rises were on the horizon as the price of butter soared 80%, while wheat and edible oils were up 40% due to a combination of commodity price rises and currency exchange rate pressure. Its chief executive Gavin Darby said the price of sugar had also risen by 20% to 30%. |