UK millers warn of rising bread prices
An exceptionally wet 18 months in the UK will likely see the price of bread and other grain foods rise further, according to the Agriculture and Horticulture Development Board (AHDB).
The UK wheat harvest is predicted to be down from around 14m tons to about 10m tons or less, thanks to the highest rainfall for any 18-month period in England’s recorded history (the Met Office started collecting data in 1839). This means wheat production is down 15% since November – the biggest reduction in cropped areas since 2020.
According to AHDB, the unfavourable weather is putting the yield at risk of being significantly reduced. A crop conditions survey found that by the end of March, only 34% of GB winter wheat was rated as in a ‘good’ or ‘excellent’ condition, compared with 90% a year ago.
“At this stage of spring, we may not have experienced such a poor looking crop in living memory. Wheat regularly astounds on its ability to recover from poor winters; this year will be a major test of this ability.”
David Eudall, AHDB’s economics and analysis director, added, “Wheat processors, flour millers and bakers will be looking to import greater quantities of wheat this season for production into bread.
“If we see continued lower production due to poor weather and other costs, we will need more imports and expose our market to the world trade.”
George Weston, CEO of Kingsmill and Ryvita brand owner Associated British Foods (ABF), concurred, noting the ‘very small’ grain harvest will make the company more reliant on imports, which could bump up prices.
“The harvest in July and August may be very small and we may be importing quite a lot of grain to the UK and that will come at a cost,” he told the media.
“We are not planning to put prices up at this stage but commodities and other input costs may go up more than we anticipate.”
Grain trade consultant Richard Whitlock, however, said an increase in wheat imports to 2m tons would help to keep a ceiling on UK prices, while other industry experts said the rise in the bread price may only be temporary until homegrown wheat supply picks up.
What’s impacting the bread price
It’s not only weather that is playing havoc on the cost of bread. Factors driving this upward trend are multifaceted, involving a interplay of environmental impact, domestic policy changes and global market dynamics.
Adverse weather conditions are impacting many regions around the globe. The UK mainly imports milling wheat from Germany and Canada – flooding has seen Germany’s 2024 wheat production down 11% on last year, while Canada is suffering from drought in some areas. A small volume comes from France, which is also struggling with the worst weather conditions for the past four years, resulting in 66% of soft wheat rated in ‘good’ or ‘excellent’ condition, compared to 93% a year ago.
This obviously impacts the price of wheat; however, the bakery industry has also recently been hit with price rises in components like yeast and salt.
The process of producing bread is inherently energy-intensive, and as of 2024, energy tariffs have soared to unprecedented levels. This has pressurized bakers – especially smaller, independent bakeries – into passing on these additional costs to the consumer.
Supply chain issues have also markedly influenced the price of bread in the UK. A hangover of the pandemic, disruptions have come from labor shortages crippling the harvesting and processing of key ingredients to delays in transportation.
Then there is Brexit. According to a report by the London School of Economics (LSE), British households have paid £6.95bn since Brexit to cover the extra cost of trade barriers on food imports from the EU.
“The cost of Brexit to each household now stands at £250 when only considering the impacts on food since December 2019,” states the report.
“Between December 2019 and March 2023 food prices rose by almost 25%. This analysis suggests that in the absence of Brexit this figure would be 8 percentage points (30%) lower.”
And, of course, changing consumer tastes also need to be factored in. There is a burgeoning demand for all natural, premium ingredients and more artisanal and speciality bread varieties.
