Dramatic price increases for dairy and bread

13/11/2007 15:00

Rising producer prices in the Dutch food manufacturing industry and on the international market for dairy and cereal products have recently also affected consumer prices. Prices of dairy products and bread in particular have risen over the past quarter.

Milk price increase highest since 2002

In October, the price of milk was nearly 12 percent up on one year previously. Earlier in 2007, producer prices of milk products had already begun to rise dramatically. Retail prices of milk and milk products have not increased so much since the price war in 2002. Late 2003, milk prices dropped again as the supermarket price war flared. Prices of dairy products have also risen evidently in recent months. The butter price has risen nearly 19 percent since October last year.

Prices of butter and milk

Prices of butter and milk

Price of bread nearly 7 percent up

The price of bread has gone up nearly 7 percent in October 2007 relative to the same month last year, the sharpest price increase in the past seven years.

Bread price

Bread price

Food price developments in October in tune with inflation rate

Yet, prices in the food sector as a whole rose only 1.5 percent in October compared to last year, which is approximately equal to October‘s inflation rate of 1.6 percent. Bread carries a weight of nearly 9 percent in the food category of the consumer price index, milk accounts for 2 percent. In the overall inflation rate, bread and milk account for 0.9 and 0.2 percent respectively.

Dirk-Jan Wolthuis and Gert-Jan van Steeg