Price hikes due to poor harvest

Food prices are likely to rise after farmers across the region reported poor harvests due to the rainy summer.

Wheat yields fell 14.1% this year on a five-year average to levels last seen in the late 1980s, according to a survey by the National Farmers' Union (NFU).

The figures have been released after the wettest summer in England and Wales for 100 years, with 14.25in (362mm) of rain falling in June, July and August.

The British Retail Consortium (BRC) has already warned of price "pressures" following the worst drought in 50 years in the US and a heatwave in Russia.

Guy Gagen, NFU chief combinable crops adviser, said wheat yields were down after abnormally high rainfall across the UK since the early summer.

"The poor UK harvest compounds a series of challenging weather events for farmers around the world, most notably drought in North America," he said.

"The resulting tight supplies of many feed grains have driven up the prices of agricultural commodities around the world.

"These UK harvest results will do little to alleviate the global dynamics of commodity prices, with the prospect of relatively high commodity levels through to 2013.

"Cereals prices impact directly on other sectors, especially pig and poultry farmers who are already struggling with higher feed costs."

Richard Dodd, of the BRC, said: "There certainly are price pressures in the system which are coming from poor wheat harvests in this country but also in the other big wheat producing countries.

"The most recent figures are that wheat prices are up something like 29% compared with a year ago.

"Our own figures for the shop price inflation for food show that it has been very, very stable - it has been 3.1% for the last three months which is actually a two-year low. There is no food price explosion going on but there are pressures in the system that will work through.

"Our fiercely competitive retail market is protecting customers from the worst effects of these price pressures."

Sparkling wine producer Nyetimber announced that it would not be harvesting its grapes this year because of the unusually poor weather conditions.

The company, which grows all the grapes for its wines in West Sussex and Hampshire, said the decision had been taken because of its commitment to quality.

Nyetimber winemaker Cherie Spriggs said: "The decision to not make wine from 2012 is a difficult one, not just for me but for our whole team.

"However, we all know that maintaining quality is paramount.

"My first obligation as the winemaker is to ensure the quality of Nyetimber's wines, and we have collectively come to the decision that the grapes from 2012 cannot deliver the standards we have achieved in the past and will again in the future."

Friends of the Earth food campaigner Vicki Hird said: "Climate change is already damaging food production around the world and causing prices to soar - and the situation is expected to get worse without urgent action to slash emissions.

"Our agricultural system is also in desperate need of overhaul to meet the twin challenges of feeding a growing world population and protecting the planet."

Clare Coffey, policy adviser at anti-poverty charity ActionAid, said: "The UK is joining other major grain producing countries in experiencing poor harvests due to weather events leading to a significant spike in wheat prices.

"As we have seen in the US, the existence of legally binding targets to turn fixed amounts of food into fuel - equivalent to 40% of US corn is made into ethanol - have made a bad situation considerably worse.

"The UK is not learning the lessons.

"Instead, while the UK heads into a winter and spring of rising food prices, the biofuel industry is charging full steam ahead.

"It plans to turn three million tonnes of wheat into ethanol each year, which will certainly not reduce pressure on food prices. The UK Government must act to put an end to biofuels mandates."