Food Luke: The price of food is rising at a rapid pace, Finland’s food bill could swell by more than 500 euros this year

Energy and fertilizer prices have already risen significantly. This year, food expenditure will cut a larger share of the total consumption of Finns.

I eat the price will rise by as much as 10 per cent this year compared to last year’s average price level, the Natural Resources Center for Agriculture and Food estimates in its business cycle report.

The rate of increase in food prices is stronger than the general rate of inflation, which increases the share of food expenditure in total consumption. According to Luke, food expenditure accounted for 12.5 per cent of consumption last year.

Luke’s specialist researcher Hanna Karikallio estimates in the review that the average Finnish household ‘s food bill could increase by more than 500 euros this year.

Exceptional price pressures stem from significant increases in energy and fertilizer prices, for example. Producer prices for cereals and oilseeds have already risen.

In the early part of the year, the price of food has risen mainly due to higher prices of coffee, fish and vegetables. According to Karikallio, the rise in prices will hit the next three largest product groups, ie cereals, meat and dairy products.

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“The price increase will also affect consumers’ purchasing behavior and direct them to buy the cheapest products in the product group or completely replace alternatives,” says Karikallio in a press release.

Energy and the rise in the price of fertilizers is creating uncertainty for farms. According to Luke, the average profitability of farm enterprises will remain at last year’s level. Costs are also expected to increase next year.

Currently, the price level of grain and oilseeds is being raised by rising input prices, a supply shock caused by the war and record low inventories, says Luke’s specialist researcher. Csaba Jansik in the review. Due to the scarcity of stocks, it is very important that the future harvest is successful both in Finland and in other countries.

However, Luke estimates that the average profitability of growing cereals, oilseeds and protein crops could improve compared to last year if the crop becomes at least average.

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According to Luke, the rapid rise in costs is eating up the profitability of animal farms in particular. If producer prices do not rise faster than at present, the liquidity and ability to repay loans will deteriorate.

“Meat producers are under extreme cost pressure due to rising cereal and protein crop prices. The cash crisis has hit farms, ”Jansik says in a review.

According to Jansik, it is worth preparing for the price of meat during the summer and autumn.

Russian The war in Ukraine has highlighted the importance of self-sufficiency. Finland has been particularly dependent on imports, especially in supplementary protein feeds. Last year, more than a third of all soybean, rapeseed and sunflower meal came from Russia.

Now imports have completely ceased and substitutes must be found for domestic alternatives and imports from other countries.

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