Imbalance in food prices: Consumers foot the bill

In a surprising twist, it appears that despite a 4.2 percent drop in producers' prices for food items since January 2023, the prices Dutch consumers pay for their food have actually increased by 3.7 percent. This noticeable disparity between what producers are paying and what consumers are spending raises questions about the workings of our food market.

This gap can be attributed to the intricate structure of producers' consumption prices, which encompass both domestic costs and import costs for industrially produced food items. Interestingly, about half of the food items consumed in the Netherlands are imported from abroad.

While the prices for food producers have surged by 31 percent since June 2020, consumers have experienced a 24 percent hike. This delayed reaction often results from long-term contracts between supermarkets, wholesalers, and manufacturers.

Dip in dairy producers' prices not reflected in consumer prices

A case in point is the dairy sector. In July 2023, the producers' prices for dairy products were 18 percent lower than the same period a year earlier. However, consumer prices rose by 12 percent during that same span. This suggests that reductions at the producer level aren't immediately mirrored in what consumers pay.

Consumer prices for meat didn't rise as sharply as producer prices

There's a similar yet slightly different narrative with meat. Since June 2020, consumer prices for meat have risen by 23 percent, while producers have paid 33 percent more.

Fewer food producers anticipate rising prices

In conclusion, the CBS points out that fewer food producers anticipate an increase in their selling prices over the next three months. Only 15 percent of companies predict a price increase, a significant drop from the 52 percent in January. This offers some hope that the upward trend in consumer prices might diminish. However, the discrepancy between producer and consumer prices remains a compelling issue.

Cbs.nl

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