Photo: Colourbox.dk

How food prices are affected

A number of products have become more expensive for ordinary Danes. However, Denmark is not in a situation where we risk food shortages on supermarket shelves.

Russia’s invasion of Ukraine and the ensuing energy crisis can also be felt in the food prices paid by ordinary Danes.

High food prices

Global food prices peaked in the spring and in August, they fell back to a level which is three percentage points higher than in January 2022.

However, these figures mask wide variation among food categories with meat and dairy products having risen in price by ten percentage points while vegetable oils have fallen by more than twenty percentage points since January 2022.

Compared with one year ago, the food price index has increased by ten percentage points.

From a historical perspective, the food price index is on a par with the oil crises of the 1970s.

Energy crisis pushes up prices

The energy crisis will drive a rise in the cost of meat and milk for two reasons.

Higher energy prices mean higher costs for farmers and food producers in the form of more expensive electricity, fuel and other products which take considerable amounts of energy to produce. Such as fertilisers and chemicals, for example.

Higher energy prices also mean there is a greater demand for biofuels and biogas. This means that land used to grow feed crops and similar will now face competition from crops used for biofuels.

This will cause feed to increase in price and put pressure on livestock production, pushing up the cost of meat and milk.

Why prices are rising

Generally, we can say that price rises are due to higher production costs within everything from energy and transport to raw materials and ingredients. Some price rises are directly linked to the war in Ukraine. This is the case for grain, for example, which affects both the price of bread and of feed used in livestock production.

It is still too early to say by how much prices will continue to rise and when price increases will begin to abate.

It is not expected that Denmark will suffer food shortages in its supermarkets in either the short or medium term, as the country benefits from solid supply chains and a large food production sector.

Products that have become more expensive

Most foods have become more expensive, however some prices have risen more than others.

In Denmark, the greatest price rises have been in:

  • cooking oils (e.g. rapeseed and sunflower oils)
  • dairy products
  • meat (beef, veal and poultry)
  • pasta
  • fresh fish
  • coffee

What can I do as a consumer?

Most of the foods currently affected by high price rises can be replaced by substitutes which are more affordable.

For example, sunflower oil can be swapped out for other cooking oils that also have a neutral flavour and a high content of polyunsaturated fatty acids, while other types of flour could be used as substitutes for ordinary wheat flour.

Consumers will therefore largely be able to find alternatives in the same shops where they normally do their shopping.

The general advice on food waste put out by the Danish Veterinary and Food Administration can inspire consumers to reduce food waste. For example, by only purchasing the food you need, storing food correctly and saving leftovers for later use.

What is the state doing to alleviate the effect of dramatic price rises on Danish consumers?

Alongside the EU, Denmark will be keeping a close eye on developments in the food sector over the coming days, weeks and months.

Fortunately, we have a robust food and agriculture sector in the EU and we have already seen the great strengths of the internal market during the Covid-19 pandemic.

Denmark works in close collaboration with close partners and international organisations in connection with global developments in food markets.

What is the state of the global wheat market?

Russia and Ukraine are major wheat exporters and this is why the war has had such a huge impact on the global wheat market.

An analysis by the International Grains Council has shown that global wheat prices remain at a historic high but that the trend is curving downwards. This is due to a strong wheat harvest in many countries and increasing exports from Ukraine.

The global wheat index, which reflects price developments on the commodity exchanges, has fallen by 24.1 percentage points since May 2022 but remains 10.8 percentage points above last year’s level.

It is still too early to say how drops in the price of wheat seen over recent months will affect consumers in Denmark.