Analysis: The price we pay for groceries is decided by events far from home, including wars, shipping disruptions, droughts in Brazil and rainfall in Asia<\/p>\n
For decades, global food prices remained relatively stable, notwithstanding occasional spikes caused by poor harvests, oil-price shocks and trade disruptions. The FAO Food Price Index<\/a> shows real food commodity prices remained broadly stable through much of the 1990s and 2000s, before the sharp increases of the 2020s.<\/p>\n At the same time, as incomes rose, households generally spent a declining share of their income on food, an economic principle known as Engel’s Law<\/a>. According to Eurostat<\/a>, food and non-alcoholic beverages accounted for 13% of EU household spending in 2024<\/a>, compared to 18% in 2000. In Ireland, we spend an even smaller share of our household budget on food, at less than 10% in 2024, despite Irish food prices being approximately 36% higher than the EU average<\/a>.<\/p>\n Russia’s invasion of Ukraine in February 2022<\/a> triggered an unprecedented disruption to global food markets. Oil and natural gas prices surged, pushing up fertiliser and agricultural production costs, while exports from Ukraine, a major producer of sunflower oil, maize and wheat, were curtailed. According to Eurostat, EU food and non-alcoholic beverage prices rose by an average of 12% in 2022<\/a> and a further 13% in 2023. In Ireland, prices increased by 7% on average in 2022 and a further 10% in 2023. While initial commodity and energy pressures subsequently eased, the cumulative effect remained.<\/p>\n We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences<\/a><\/p>\n From RT\u00c9 Radio 1’s News at One, Prof Thia Hennessy from UCC on why groceries could cost you more next year <\/p>\n 2024 and 2025 brought some relief as supply chains adjusted, energy markets stabilised and prices for several commodities eased. Crucially, slower inflation did not mean that food became cheap again. Prices were simply rising more slowly from an already elevated level. Higher labour, packaging, processing and distribution costs remained embedded in food prices.<\/p>\n Over the same period, new regulations addressing climate change, deforestation and human-rights abuses in supply chains were introduced, while serving important objectives, compliance with these regulations has added additional costs to food production. The EU Deforestation Regulation<\/a>, for example, requires commodities including coffee, cocoa, and beef to be demonstrated as deforestation-free. This adds an administrative burden to producers and potentially limits sources of supply.<\/p>\n Today, geopolitical instability is again putting pressure on food markets. The US\u2013Iran conflict and disruption to shipping through the Strait of Hormuz have pushed energy costs higher, impacting food production. Disruption is also affecting fertiliser markets, creating a double negative for farmers through higher energy and input costs. These pressures are affecting commodity prices and, in time, will transmit to supermarket prices this autumn and into next year.<\/p>\n We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences<\/a><\/p>\n From RT\u00c9 Radio 1’s Drivetime, should governments operate grocery shops to keep prices down?<\/p>\n It is not just geopolitics. Weather<\/a> is an increasingly important source of food-price volatility. Agriculture has a complex relationship with the climate, contributing approximately one-third of global warming emissions yet also being exceptionally vulnerable to extreme weather events. For consumers, extreme weather can mean smaller harvests, tighter supplies, higher production costs and higher food prices.<\/p>\n Coffee provides a striking example. Adverse weather in major producing countries, including drought and heat in Brazil and prolonged dry conditions in Vietnam, contributed to world coffee prices rising by almost 40% in 2024 <\/a>compared with the previous year.<\/p>\n Closer to home, the hot, dry summer of 2026 has affected food production. Reduced grassland productivity and fodder availability, combined with maize yields down almost 10% across Europe, will increase the price of purchased animal feed and put pressure on livestock farmers. Fruit, vegetable and olive oil production in southern Europe is expected to decline. Cereal-based foods also face upward pressure. The European Commission forecasts EU cereal production in 2026\/27 almost 5% below the high yields of last year.<\/p>\n We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences<\/a><\/p>\n From RT\u00c9 Radio 1’s CountryWide, a look at what needs to be done to keep the price of bread down by making it here<\/p>\n As we look into autumn 2026 and 2027, another major unknown is El Ni\u00f1o<\/a>. The US National Oceanic and Atmospheric Administration (NOAA) is forecasting<\/a> a very strong El Ni\u00f1o through winter 2026\u201327, raising the risk of drier conditions across India and parts of Southeast Asia, Southern Africa, Central America and Australia, potentially affecting major crop and livestock production. Historically, El Ni\u00f1o has reduced global rice yields by around 1\u20131.5%, while soybean yields have tended to increase by 1.5\u20132%, illustrating how effects may vary.<\/p>\n Here in Ireland, we are quite exposed to movements on global markets given our high food import dependency. This is particularly relevant for cereals, animal feed, fruit and vegetables, where Ireland relies significantly on imports, disruption to global supplies can therefore feed through into Irish farm costs and consumer prices.<\/p>\n So what can consumers expect in their trolleys in autumn 2026?<\/p>\n The outlook is not for food price increases on the scale experienced in 2022\u201323, but nor can we expect a return to pre-crisis levels. Instead, consumers are likely to see moderate food inflation, with sharper increases concentrated in particular products.<\/p>\n \n Bread, pasta, breakfast cereals and other cereal-based products face upward pressure from international wheat and energy prices. For meat and dairy, pressure may build into 2027. Higher energy, fertiliser and feed costs increase the cost of producing milk and beef, although how much reaches consumers will depend on farm output, processor and retailer margins and competition. Poultry and pork face similar costs but are somewhat more insulated by shorter production cycles and more efficient feed conversion.<\/p>\n Fruit and vegetables are particularly exposed to weather effects. Reduced yields, irrigation costs and tighter supplies could increase prices for tomatoes, peppers, citrus and other imported produce. Olive oil remains vulnerable after several difficult Mediterranean growing seasons. Coffee could provide some relief, the recovery experienced in Brazilian and Vietnamese harvests in 2026 will boost supply and should ease international prices, although this will take time to reach supermarket shelves in Ireland.<\/p>\n There is a wider lesson. Irish consumers are affected by events far beyond the Irish farm gate, from wars and shipping disruptions to droughts in Brazil and rainfall in Asia. The autumn 2026 shopping trolley will reflect conditions on farms and markets around the world. After several years of exceptional disruption, the new reality may be greater food-price volatility rather than a return to the relatively cheap and stable food prices of previous decades.<\/p>\n Prof Thia Hennessy is a contributor to How to Shop Well Now<\/a>, a two-part documentary on the truth behind the rising prices of groceries. Part one is broadcast on RT\u00c9 1 and RT\u00c9 Player tonight (5 October) at 9.35pm and part two is broadcast on 12 October.<\/p>\n Follow RT\u00c9 Brainstorm on WhatsApp<\/a> and Instagram<\/a> for more stories and updates<\/p>\n The views expressed here are those of the author and do not represent or reflect the views of RT\u00c9<\/p>\n