AN INCREASE IN meat and dairy products is “beginning to happen already”, according to Ireland’s agricultural advisory and research body, as the world scrambles to readjust its markets against the backdrop of the Russian invasion of Ukraine.
Trevor Donnellan, head of economics and surveys at Teagasc, made the comments while speaking to The Journal‘s The Explainer podcast about Ireland’s food security.
Donnellan said that Ireland can expect to see higher prices for products that use the main grains that Ukraine produces, such as wheat, maize, and barley, as well as rapeseed and sunflower-seed products.
“So if wheat prices escalate, then ultimately that’s going to result in higher prices for foods that contain wheat, the obvious one there being bread.”
He said that because of the “dramatically” increasing cost of grain used to feel farm animals, as well as an increase in the cost of fertilizer and fuel, there would be a knock-on effect for the price of meat and dairy products, as farmers face “substantially” higher costs to produce these commodities.
“That’s beginning to happen already,” he said. “You would have seen, for example, an increase in some food items in the supermarket already and it will continue over the course of the year.”
It’s expected that agri-food price increases will go up “in a chain” – grains will increase in price first, followed by chicken, pork, dairy products, and ultimately, beef and lamb.
When asked about whether Ireland would see food shortages, Donnellan said “I’m not sure we’re going to see shortages of food in our part of the world”.
How we will see this manifesting itself is in higher prices. And those higher prices are themselves a problem because if you are on a lower income, even though the food may be there in the shop, you may not be able to afford to buy it.
He said that it’s likely that people on lower incomes will report not being able to afford to buy certain items, adding that there may be a need for Government interventions later in the year.
The ESRI said earlier this week that disposable household incomes in Ireland are expected to fall this year in real terms for the first time in a decade with consumer prices increasing at their fastest pace since the early 1980s.
Having previously forecast consumer-price inflation of 4% this year, the Dublin-based think-tank now expects prices to grow by an average of 6.7%.
The increasing cost of grain is expected to hit developing countries the hardest, however.
Jim Clarken, Chief Executive of Oxfam Ireland, said that in responding to the invasion of Ukraine, there needs to be a response to its effect on the global food system, which will “reverberate worldwide, hitting the poorest and most vulnerable people hardest and fastest”.
“Rising food prices are a hammer blow to millions of people who are already suffering multiple crises and make the huge shortfall in aid potentially lethal,” he said.
To hear more about what food security is, whether Ireland could diversify what we grow here, and the importance of Ukraine as a food exporter, listen here:
The Explainer / SoundCloud
With reporting from Michelle Hennessy and Nicky Ryan.
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