Food price inflation - no let up for the foreseeable future

The Bank of England has issued a warning that it is unlikely to achieve its 2% inflation target citing the rising costs of oil and food as contributing to upward pressure.

Livestock and milk related products are primed to rise further in accordance with the higher costs of grain based feedstuffs.

Food manufacturers are caught in a vice; the buying pattern for many has been “just in time” reflecting the need to keep inventories as low as possible.

However without the safeguard of a “buffer stock” they are now more than ever exposed to the harsh reality of having to “pay up” in order to secure the raw materials to keep their facilities in production.

At the same time Suppliers will continue to face the problems of operating in the current economic background with buyers seeking to delay payment, renegotiate contracts etc.

The era of cheap food has long passed and with consumers still having to closely watch their expenditure companies will now more than ever be required to ensure they are operating at optimum efficiency.