Harvest heat on bread prices

By Martin Cassidy
BBC Northern Ireland rural affairs correspondent

Bread prices look set to rise sharply despite a bumper grain harvest by Northern Ireland farmers.

Flour millers are blaming a 15% price hike on a drought-affected grain harvest in Europe.

The major millers have been contacting bakeries to inform them that flour prices are going up by as much as £35 per tonne.

Bakers have reacted with dismay and some are already talking about an extra five pence on a loaf.

The price of bread is set to rise

But further increases seem likely this autumn as flour stocks are replenished with more expensive product.

The Federation of Bakers says bread making margins are already very tight and that it is difficult to see how the increased cost of flour can be absorbed by its members.

Wheat accounts for up to 90% of the ingredients of a standard loaf and bakers like Keith Henning say the millers' announcement can only mean dearer bread.

He said: "We will have to work out our costs again but it is going to put a fair rise on the consumer."

But the issue of a price increase is making some of the bigger bakeries nervous.

Privately they admit the price of bread is an emotive issue and fear that some supermarkets might try to gain publicity by resisting any move to increase the price of a loaf.

The outlook may be rosy for farmers but it may not be long now before shoppers are confronted with higher bread prices

A standard sliced loaf currently retails from about 42p but following the increase in wheat and flour prices, that may now rise to around 50p.

Further up-market loaves which currently sell for up to 90p could soon be pushing up through the £1 per loaf barrier.

Down on the farm though it looks a very different story with some bumper crops.

Farmers are not only enjoying the warm weather but also a hot market for grain.

Patrick Forde grows barley and wheat on his farm at Seaforde in County Down.

He said: "We have had the right amount of sun last month and that's made the grain swell and we have got a far better sample of pickle this year.

"Prices too are looking hopeful so let's keep our fingers crossed."

And no wonder farmers in Northern Ireland are smiling.

Reaping rewards

Wheat prices are a third higher than last year and while local crops are destined for animal feed rather than for bread production, prices are expected to top £100 per tonne this autumn.

The barley harvest too is reaping dividends for farmers with prices spiralling upwards from £73 last year to £90 a tonne this season.

But while farmers in Northern Ireland forge ahead with a near perfect harvest, elsewhere in Europe the story is one of drought-stricken crops and a shortfall of up to 16m tonnes of grain.

With world grain stocks describes as"neat" there seems little prospect of wheat prices falling.

The outlook may be rosy for farmers but it may not be long now before shoppers are confronted with higher bread prices.