Food inflation: Overview of the data
ABS data shows annual food price inflation in Australia saw the fastest rise in food prices since Q3 2011. Prices were up across all categories except fruit. For the purpose of this blog, I will concentrate on fresh fruit and vegetables. During q2 of 2022, vegetables were up a whopping 14.6% from the previous quarter, while at the same time, the cost of fruit fell to -1.4%. Keep in mind this data covers the whole fruit and vegetable sector and is not specific to the organic industry.
Our q2 2022 data for the organic fruit and vegetable shows:
Organic Vegetables were up by +8.7%
Organic Fruit was down by -6.8%
Our organic fruit and vegetable data confirm the ABS data trend for the overall fruit and vegetable market. That is, organic vegetables went up ( though not as much ) while organic fruit went down.
One thing we can deduce from this data is that increased petrol prices during this period had little impact on fruit and veg inflation. Had petrol been a major contributor to price rises then both non-organic and organic fruit prices would have increased but the reality was prices reversed.
The main takeout here is that it's all about supply! The east coast has been hit hard by a combination of severe storms and floods which has predominantly affected vegetable production, particularly any above-ground greens. Add to this an unusually colder winter and its inevitable supply shortages will occur. It's been a common occurrence at the markets lately, some produce is either not available or in limited supply and as a result prices go up. For instance, the main supplier of leafy greens and herbs at the organic market is Coolibah Organics, their prices went up almost 25% overnight when they got hit by a storm in May. We will see where prices settle as they recover. Keep an eye on them, I will be.
The fact that fruit prices reversed last quarter seems to indicate the main drivers of inflation such as petrol and labour are not affecting fruit and veg prices as we thought ( at least not yet), but rather this is a supply issue which should resolve itself as the weather improves.
For those interested, the full data set follows:
ABS data Q2 2022 vs Q1 2022:
bread (7.2% vs 2.6% in Q1), beef and veal (9.4% vs 12.1%), dairy & related products (5.2% vs 4.1%), food products n.e.c(6.1% vs 4.2%), oils and fats (14.6% vs 8.6%), cakes & biscuits (3.9% vs 2.2%), pork (3.9% vs 3.3%), eggs (5.8% vs 1.5%), cheese (4.9% vs 3.3%), other cereal products (10.4% vs 7.3%), jams, honey, and spreads (2.2% vs 2.2%), ice cream and other dairy products (5.6% vs 4.6 %), vegetables (14.6% vs 12.7%), coffee, tea, cocoa (9.3% vs 8.2%), water, soft drinks, juices (7.6% vs 6.4%), meals out and take away foods (4.7% vs 2.6%), and restaurants meals (5% vs 2.8%). At the same time, cost of fruit continued to fall (-1.4% vs -0.5%)
Thanks for reading!