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The Reason Why Food Is Expensive Now - Rice Has Been X4 Higher

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This is my summary of the radio programme which is a series.

Why are food prices so high?

In the 1970s, for example, rice was 4x the price it is now.

The long-term trend for food prices going back 100 years has been down.

So what's going on?

Part of the problem is oil. Oil price rises causes fertiliser production costs to rise.

Fertiliser such as nitrogen has risen dramatically. That's why crops such as wheat reflect the price of oil to such an extent.

Wheat has doubled in cost of the past year. But in say a loaf of bread, wheat still only makes up 5% of the cost.

So a loaf of bread costing £1 only owes 5 pence of that cost to wheat.

Some of the price rise may be down to transportation and fuel costs for the supermarket.

The rest, many suspect, is that supermarkets are simply looking to restore margins now.

Some years ago when you bought a potato, 64% of the cost was down to how much the farm was paid.

Now it's 25% or thereabouts.

The rest of the money then - that 75% - is an increased margin from middle-man to supermarket.

Instead of that middle-man taking 36%, they're taking 75%.

There's a lot of profit in UK food retailing then among all the chains!

Myths such as expanding demand in China and India are really just that, or demand so so small as to be of

no real factor. Something like 2 or 3% for India, and 0 for China. Yet these small fluctuations are the blue touch paper.

For perhaps the main factor is that the common agricultural policy which resulted in stockpiles of wine, milk, grain et al

resulted in governments in the early 1990s and beyond reducing land for crops by 10%. This has meant that even a small fluctuation in demand of a few percent causes fear on the markets and sends the prices into volatility. The claim is that climate change makes managing these fluctuations very hard.

(The programme's reporting in itself slightly contradicts its own takes on the reasons for food price inflation, but is nontheless a good listen.)

For a full account, you can hear the programme at Listen Again at BBC Radio 4, and the series Mondays 9am, Our Food, Our Future with Tom Heap http://www.bbc.co.uk/radio4/progs/listenagain.shtml

edit - typos, sorry

Edited by The Last Bear

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This is my summary of the radio programme which is a series.

There's a lot of profit in UK food retailing then among all the chains!

Well, you can easily calculate that -- I'm pretty sure their profits are not obscene but within normal lines.

What is happening that today the systems that deliver food to people's homes are far larger and more complex to run, and so, the amount of work needing to be done is proportionally larger and so more expensive.

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Well, you can easily calculate that -- I'm pretty sure their profits are not obscene but within normal lines.

What is happening that today the systems that deliver food to people's homes are far larger and more complex to run, and so, the amount of work needing to be done is proportionally larger and so more expensive.

Thank you, Rupert Waitrose.

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What is happening that today the systems that deliver food to people's homes are far larger and more complex to run, and so, the amount of work needing to be done is proportionally larger and so more expensive.

All the more reason that it's about time to stop the crazyness that the big supermarkets promote, i.e. green beans from Africa, apples from China, tarragon from Israel, the list goes on and on.

BTW just what is that revolting avatar you have?

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Makes sense, I bake my own bread and the ingredients cost about 20p a loaf

Really? I tried this for a bit (until my bread machine broke) and it didn't seem like you got many loaves out of a bag of flour, and that costs quite a bit in a supermarket (pound odd). What are the numbers and how do get flour? Maybe I'll get a new bread machine - the bread definitely tastes better and you can put less salt in it!

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All the more reason that it's about time to stop the crazyness that the big supermarkets promote, i.e. green beans from Africa, apples from China, tarragon from Israel, the list goes on and on.

It's not crazy, it's economic to and profitable to everyone involved do so, and buying stuff from Africa is the *only* real useful 'aid' there is. However, the rising transport costs will destroy that business, so it goes to Spain and their vast array of greenhouses instead.

However, the import costs are only a fraction of what the system actually costs to run. I'm actually doubting that you could run the current food delivery with the available choice and quality much cheaper if you went back to lots of small traders as if used to be, simply because a huge number of small traders would not have the efficiency that a properly planned JIT system has.

BTW just what is that revolting avatar you have?

It's a woman eating a fresh baby. Because this is what the current generation is doing, literally.

Pass the ketchup.

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All the more reason that it's about time to stop the crazyness that the big supermarkets promote, i.e. green beans from Africa, apples from China, tarragon from Israel, the list goes on and on.

I always to buy stuff from out of the EU. Those scrounging European farmers have enough of my money already. What's wrong with that?

The reason a relatively high proportion of the price goes to the shop is because farmer Brown's Mercedes has already been paid for by the downtrodden taxpayer. He's more interested in subsidies than growing and selling food.

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Really? I tried this for a bit (until my bread machine broke) and it didn't seem like you got many loaves out of a bag of flour, and that costs quite a bit in a supermarket (pound odd). What are the numbers and how do get flour? Maybe I'll get a new bread machine - the bread definitely tastes better and you can put less salt in it!

Agreed, it costs a fortune. Plus the electricity. You can't compete with the bulk bakers.

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Agreed, it costs a fortune. Plus the electricity. You can't compete with the bulk bakers.

Actually, you can. I get 2.5 standard loaves out of a 1.5kg bag of flour; such a bag can be had for 48p at either Tesco or Lidl (though I spend more because I like to put some wholemeal in). The other ingredients and electricity cost maybe 20p per loaf. The results are comparable to an artisan loaf, none of your mass produced Allinsons or Hovis rubbish ;)

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Bloody hedge fund managers.

i put more blame with the masses that jumped on the property bandwagon.

they shorted cash & productive businesses in favour of bidding up piles of bricks. they got what they wanted.

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Thanks for the breadmakers heads-up, strangely enough was pondering the idea this very afternoon after hearing wheat is just 5% of a loaf!

Not sure I'll bother now, although actually it's pretty easy even without a bread making thingy. Anyone who wants a PDF that shows how in just a few easy stages, PM me. It's aimed at kids, very straightforward.

There's a version for hoodies - shows how to bake a knife into the loaf.

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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