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CHEAP FOOD 'A THING OF THE PAST?'

You like everyone else will be experiencing increases in the costs of your food purchases. There has never been a better time to take advantage of your CBG foodservice membership which is dedicated in supporting you in controlling your food budgets.

Food inflation cannot be halted but it can be controlled and managed. Gone are the heydays of cheap food and  very low food inflation.

Food cost are rising at an unprecedented rate and look set to continue to do so with retail food inflation predicted to reach 19%.

Food has been effected by a mass of market factors all effecting the cost of the product ranging from the cost of gas (used to heat greenhouses ) which effects fruit and veg to fuel and packaging costs.

Adding to these market factors is the worldwide shortage of commodity crops such as wheat, rice, soya and corn

This worldwide shortage can be attributed in part by the drive to produce bio fuels made from corn, wheat and soya as an alternative to oil. The shortage has now prompted a rethink by the Government who is preparing to call on the EU to scrap the plan on bio fuels. The shortages are further impacted by increased demand from China and Eastern Block countries along with Russia In addition climatic changes are playing there part in reducing yield or crop failures.

Without any price increases due to the above, the food import market would still experience inflation due the weak pound and currency exchange rates.

Below are just a few of the elements now influencing the Great Britain food market which has assigned 'cheap food' to the history books.

MILK & DAIRY

In just one year, British milk has gone up by 20 per cent, while butter has notched up a dizzy 60 per cent increase. These heavy price hikes are a reflection of the dairy commodity markets, where prices are at their highest level for a decade.

The European Union introduced quotas in 1984 to eliminate milk lakes and butter mountains; other schemes giving farmers price support wound down in 2003. Stocks have now dwindled against a background of increased demand.

In 1996, there were 34,500 dairy farms in the UK. Now there are only 19,000. The Milk Development Council predicts a further fall of 7 per cent in UK milk production this year.

WHEAT

Currently the global demand for wheat outstrips supply, and as a consequence last year branded 800g white sliced loaves broke the £1 barrier

In February, a bushel of bread wheat hit the all-time high of $25. It historically it would trade at between $3 and $7 a bushel

POULTRY & EGGS

To feed their hens, poultry farmers were paying £70 a tonne for wheat and barley a year ago, and £130 for a tonne of soya. These same feedstuffs now cost £160 and £230 respectively.

Overall, Britain's egg production has been in decline for the past two years, and increased demand for free-range has been met by imports again at a higher cost due to transportation costs and exchange rates.

FRUIT AND VEGETABLES

Britain can grow fantastic apples, pears, berries, plums and cherries. Even so, the UK produces only 10 per cent of the fruit it eats.

In 1990, the supermarkets sold just 40 per cent of the apples that British people ate. By 2000, that number had doubled as independent greengrocers were forced out of business and wholesale fruit markets were reduced to a shadow of their former glory. In the past three years, as consumer demand for more local food has grown, supermarkets have started to stock more English fruits.

British vegetable production is vulnerable to climate change. More than a third is concentrated on the Norfolk Fens, but climatologists believe the Fens could flood with saltwater as a result of rising sea levels, making cultivation impossible. Last year, Humberside - the world's biggest pea-producing centre - was flooded. A quarter of the crop was ruined, putting 40 per cent on the price of a bag of peas. The NFU has also warned that the British cauliflower could go out of production. Floods in June led to shortages in December and a glut which depressed prices - and growers.

The cost of gas has trebled, hitting growers with heated greenhouses growing vegetables such as tomatoes, cucumbers and peppers. On gas alone, it now costs 5p more to grow just one cucumber.

MEAT

The recent 40 per cent rise in feed costs could be the last straw: last year, UK beef producers lost £94-£151 on every animal they sold. Since 2004, the beef herd in England alone has fallen by 11 per cent and there are fewer younger beef cattle in the pipeline - down by 15 per cent in four years. With a ban on Brazilian the pressure on this market continues.

PASTA

The wholesale price of durum wheat, grown for pasta, has soared by 250 per cent since last June.

DON'T DELAY!!

The list goes on and it would be advisable to review your food budgets on a regular basis in order to minimise the impact on your organisations performance.

The situation is very serious and every opportunity to mitigate the effects on your organisation need to be explored.

CBG Foodservice is operated by Purchasing Support Services on your behalf and they will conduct a review of your food purchases free of charge!!

They are experts in the management of food costs and supply chain initiatives

If you would like to ensure you are getting the lowest possible cost for your food purchases Call CBG Foodservice now on free phone 0800 6340916

Or email for further information to admin@charitiesbuyinggroup.com, we are here to help