The cost of shopping trolley staples are surging at a rate of 5pc a year – almost three times the rate of general inflation. It is the highest rate of increase in food prices since December 2023.
Experts have warned that more rises are on the way as high farmgate prices continue to drive up the cost of meat, butter, milk, bread and cheese.
Provisional August inflation figures from the Central Statistics Office (CSO) – calculated using the EU Harmonised Index of Consumer Prices – show the cost of food was up 0.4pc in the month.
Higher food prices mean the overall inflation rate rose to 1.8pc last month, up from 1.6pc in July.
Food prices are continuing to rise. Photo: Getty
Today’s News in 90 seconds – September 2nd
Independent economist Austin Hughes said food price would continue to increase for a while yet.
“While retail food price inflation is now showing a 20-month high of 5pc, farmgate prices are rising far faster,” Mr Hughes said.
“Some sense of the fundamental pressure on grocery prices is seen in the latest agricultural output prices that show a year-on-year increase of 18.9pc.”
Agricultural output prices reflect the prices farmers get when they sell their produce.
Mr Hughes said the rise in the agricultural output price index “suggests scope for painful upward pressure on food prices to persist for some time”.
He said: “The fall in cattle numbers coupled with increased demand here and abroad suggests no easy let-up in the rise in living costs for Irish households.”
It’s been a huge shock to households
Daragh Cassidy, of price comparison site Bonkers.ie, said that, since the middle of 2021, grocery prices in Ireland had surged by close to 30pc.
He added: “Indeed, prices rose more in the space of just three or four years than they had in the previous 15 years. So it’s been a huge shock to households.”
Mr Cassidy said the leap in grocery prices was partly down to high energy prices, which he said were not likely to abate anytime soon.
“There has also been a reduction in the size of the country’s herd,” he added.
“Food markets are also becoming increasingly commoditised and international. So it’s not just about what Irish consumers will pay – it’s about what others will pay too.
“It’s highly unlikely prices will return to the levels we saw a few years ago. As with high energy costs, this appears to be the new normal, unfortunately.”
Energy prices are estimated to have fallen by 0.3pc last month, and decreased by 0.1pc over the 12 months to August this year.
No energy companies have cut the electricity or gas prices charged to households, even though the prices of home-heating oil, petrol and diesel have fallen on the back of crude oil prices being depressed.
In April, SSE Airtricity hiked electricity bills by 10.5pc and gas bills by 8.4pc – a move that affects around 250,000 electricity customers and 85,000 gas customers.
In the early summer, Flogas announced an increase in electricity prices effective from last month.
The fall in motor fuel and home-heating oil accounts for the CSO recording a fall in overall energy costs in August.