Overview:
Prices of food and non-alcoholic beverages rose by 1.7% in the year to May 2024. This is down from the April figure of 2.9% and is the lowest annual rate since October 2021.
The annual rates of inflation eased in 9 of the 11 food and non-alcoholic beverages categories, the exceptions being oils and fats and milk, cheese and eggs. Extreme weather conditions across Europe have put pressures on pricing and availability in key commodities such as grains, natural gas and potatoes.
At Regency, we continue to proactively mitigate availability issues and supply risk, putting solutions in place to reduce impact, such as product switches and recipe re-engineering.
Market movers:
There are concerns over potential rapeseed crop losses in key production areas such as the EU and Australia. If these losses do occur, it may cause short supply.
Ukrainian rapeseed crops are being hit by extreme weather, with frosts across key growing regions causing some crops to have darkened or be killed entirely. These frosts, combined with a lack of rainfall in early May, have harmed yields and production.
Supply concerns have been further heightened by Chinese imports increasing by 13.7% from April to May. This is due to low Chinese stock levels and high demand.
There's a wide variety of potatoes becoming available… New varieties from Cornwall and Pembrokeshire are already making an appearance with the much-anticipated Suffolk Maris Peer arriving in mid-June. These new crop varieties have a high water content which are ideally suited to steaming or gently boiling. Main crop varieties such as Maris Piper are still available and great for roasting. Bakers and washed baby are generally still main crop varieties with set skins but keep stocks to a minimum and store in a dark cool area.
The asparagus season has had a good run this year but the English season is coming to an end to be replaced by imports.
UK broad beans and peas continue to be a great option along with UK courgettes starting to appear.
Cavolo Nero kale is a splendid summer veg which takes very little cooking.
Broccoli is always a dependable choice with quality product currently available.
It has been a very challenging period for cauliflower in the UK over the winter. With summer crop still a couple of weeks away due to late planting, we will be relying on expensive imports from Holland and Germany.
Parsnips remain short and expensive with the UK season coming to an end due to heavy rainfall along with a lack of rain in Spain delaying the Spanish season.
Large graded carrots from China as well as French imports will be available until the UK product starts back up in mid-July.
Strawberries have started to arrive from around the UK and in good volumes.
Spanish cherries arrived in late May and the volumes remain good. UK product will begin to appear late month.
UK salads are now in full flow along with the British tomatoes, including some show-stopping heritage tomatoes now arriving from English growers around the country. There is a wealth of options from UK growers such as iceberg, lollo, oakleaf, cos or little gem.
At their best:
Planning ahead:
Higher living wage and shortages of skilled staff means bakeries continue to struggle. Aldi and Lidl, which offer higher wages, are forcing bakeries to raise their wages to attract skilled workers.
Cacao prices have surged by 151% compared to last year, due to supply issues in West African countries. This has been caused by bad weather conditions and disease affecting cocoa trees, along with increased global demand.
Gilthead bream stocks have been very low in Greece, and this is keeping prices buoyant. Usually bream offers a much more economical choice, but we are in a rare period where sea bass is the better value of the two species. There has been some inflation on sea bass and bream that relates to the increases in transport and import charges. We do now, however expect both species to remain stable in price over the summer.
Prices on salmon have remained surprisingly firm over recent months and, as of writing, show no signs of reducing. Prices “should” begin to lower by June, and typically stay lower until the Autumn. However – this will not happen until the farmers are ready to do this. With warmer waters, it will be easier for the farmers to heal their winter-wounded fish. Currently, they are still limiting harvests because of the unprecedented issues with the proportion of production grade fish. Norway producers are not allowed to export production grade fish without filleting first. This grade refers to fish with wounds or deformities. It has been reported that, in February of this year, nearly 40% of all Norway salmon was production grade. This goes some way to demonstrating the scale of the issue. As soon as harvests normalise, prices should begin to lower.
All variations of trout, overall, look to be stable in price. Increases are very much limited to the increased transport rates. Whether ChalkStream®, sea reared, or smaller farmed fish, all offer a sound and economical alternative to salmon. Unusually, the sea-reared trout has not mirrored the salmon prices to the extent that we have seen in the past.
With our own UK ChalkStream® trout also faring well throughout these challenging months for salmon, the UK public really need to see trout as a viable and tasty alternative.
It has been a very difficult few months for halibut supply, with constant interruptions to harvesting volume. The price has been less of an issue than the availability. Supply lines have begun to normalise somewhat, and the increases we are seeing are mainly due to increased import costs and transport rates. However, the 3-5kg size has seen a more significant increase due to increased demand from the USA. Whilst the yield to portions
remains more advantageous than brill or turbot, it is certainly one that will be at a higher cost on the menu.
Plaice are now in season and will be until the end of the year. Prices have eased against the backdrop of
improved yields. Dover soles will go offshore in the summer and this will be reflected in the price as they become scarcer. The quality of fish that is landed, however, will be excellent. Lemon sole prices out of Cornwall have been firm of late, reflecting the demand for UK fish for export. They are in season however, and we would expect that there will be some deals to be had over the course of the summer.
Cod is looking to be difficult due to pressure on stocks. This is primarily due to the USA ban on Russian origin fish – regardless of the processing country. The other key factor is the 20% cut in Barents Sea cod quota. Industry experts expect there to be a further 25% cut in 2025.
Larger fish are fetching the highest prices with slightly less pressure on smaller fish due to the alternatives available by way of pollock and haddock. The Icelandic cod quota is usually finished by July, and this sees fishermen tying up boats and taking holidays until new quota begins in September.
Haddock is a slightly better picture with more fish available from Norwegian stocks. We expect haddock prices to remain reasonably stable with the exception of the larger size, which is likely to follow large cod as the closest alternative. Watch out for poorer quality fish during August however. Coley will be a good alternative for large cod and haddock over the summer period with consistent quality. We expect a small price increase to reflect a rise in demand, but it will remain far better value than either of its more popular family members!
It really has been feast or famine for hake in recent weeks. Variable weather can be the making or breaking of this tidal species. We have seen prices move by 80% from one day to the next. Any stretch of settled weather could see improved availability and cheaper prices for what has become a real favourite.
During recent fisheries negotiations with the EU, it was decided pollack can only be caught as bycatch in 2024. This followed advice from the International Council for the Exploration of the Seas (ICES) to set the TAC for pollack to zero. The MCS good fish guide currently rates all UK pollack as a 4 or 5. One to avoid for now.
Prices for swordfish and tuna tend to increase in June. As the European summer is in full swing, demand increases for both these species. Whilst there are no major holidays in the key fishing regions in June, there will be less fish due to changeable weather and continued fishing bans. There is also an increase in import costs to cover.
The main crab season in the UK is from May to December. The season does not become fully operational until mid-May when the waters warm up and catches become viable for the boats, so we are hopeful that the recent availability issues with the handpicked meats will ease as we get into the summer season.
We are hopeful that smoked salmon will decrease in line with the belief that whole fish will reduce over the summer months.
Overall, frozen fish prices remain reasonably stable. Quality frozen seafood offers a great option to reduce wastage.
Butter prices have risen by 45% over the past 12 months, driven by tight availability and an increase in demand.
Increased butter demand was supported by uncertainty surrounding milk intakes, with milk production starting to decline earlier than expected, due to the wet weather. High demand is expected to increase further over the coming month, with buyers looking to cover demand ahead of the upcoming summer holiday period.
Tip: With butter prices remaining high, we recommend switching to margarine for baking and spreading where possible to help mitigate costs.
While we have experienced a period of relatively stable Farm Gate Pricing (FGP), with slight inflation in April, the volume supply from farms has been poor this spring with little evidence of spring flush and any volume growth has been late and minimal. As a result we are now past the point of expected peak milk so no matter what happens now, weather or feed wise, we are not going to see any substantial increase in off farm milk volumes.
All of this has been driven by the extended period of wet weather experienced over the winter and continued well into March and April resulting in very wet and soft ground that has restricted access for cows to fresh pasture. While the weather started to improve at the end of April and start of May and we started to see cows in fields it has simply been too late to deliver a strong spring volume.
Spring is traditionally the period of surplus milk with the biggest challenge faced being balancing volumes to markets, while allowing increased production for cheese and, butter and powders that compensates for lower volume availability later in the year. This ‘missing’ volume has reversed the traditional spring softening of farm gate pricing and now looks to create a tightening of the markets earlier than normal and pressure on volume supply in Q4.
Pressure is already coming from farmers regarding the increased costs of buying feed to cover for this period when they expected the cows to be out grazing which is driving up cost of production for all areas. Grain prices are already increasing with the loss of crops of spring barley etc as it is not just dairy that is suffering from the wet ground.
Cream also continues to see increases both in demand and value. Demand is high as expected, but the lack of spring milk not producing surplus of cream has resulted in a very bullish market with prices trending upwards in trading across Europe. We continue to see demand from Germany and Poland as well as increased demand in UK which therefore means the normal spring drop in cream value has completely revered and value this month is rising fast with butter manufacturers in particular chasing volume to fill positions taken.
Growing concerns on future farm milk volumes dropping quickly together with continued increased demand from all milk processing sectors will undoubtably continue to drive farm gate price inflation in the second half of the year. Cream market stability previously forecast now looks less likely with concerns of weakening volume availability at peak demand times (Q4) which could see cream price inflation continuing and peaking through Q4. We're working with our suppliers to mitigate impacts as much as possible however price increases should be expected from July.
UK Key Market Movers (CPI)
The Consumer Prices Index (CPI) is a key measure of inflation in the UK. Movements in CPI give a high level overview of the key categories experiencing inflation. Below is a monthly snapshot of the top food commodity price inflation movements impacting the UK. The data is from Office for National Statistics (ONS).
Sources: Foodbuy, ONS, Direct Seafoods, Allan Reeder, Dole, Mintel.
Regency House
37-40 Alexandra Parade
Weston-super-Mare
North Somerset
BS23 1QZ
Google maps
+44 (0) 1934 646 135
info@regencypurchasing.co.uk
© Regency Purchasing Group 2020.
Terms & Conditions | Privacy Policy | Cookie Policy
Stay connected
Enter your email address to be kept up to date with latest news, company developments and market insights. You can unsubscribe at any time.
View our Privacy Policy.