bemoreeco

Since the beginning of 2008, a loaf of bread will probably cost you over a pound. It was only 50 – 60p at the turn of the century, so that is quite a big increase. Likewise, other items are noticeably more expensive. Rice and Pasta cost up to 60% more than they did last year.

But lets focus on bread for a minute. There are 4 major factors making bread so expensive at the moment.

1)  Rising fuel costs. Everything costs energy to make and deliver, and the rising cost of oil had made it more expensive to bake bread. So supermarkets like Waitrose, Tesco and Asda are charging more for it.

2)  Wheat costs more. Farmers have been financially encouraged to use land which would traditionally have grown wheat and other crops, to grow corn-based ethanol and other plants which can produce biofuel. This means less land for wheat and higher prices. The irony is that this second problem was meant to resolve the first.

3)  Rising demand. Emerging countries like China, India and Brazil have a rapidly growing middle class. This middle class is discovering they like different things in their diet, namely bread. This creates a bigger demand, and higher prices.

4)  Bad Weather. Bad weather isn’t so new to us in the UK, but the last two years haven’t been kind to farmers. Around the world harvests have not been good and this has helped caused food crisis.

Are the prices going to stay this high? No, at least not in the short term. We’re likely to see a small dip in the future as the oil speculators drop their prices, the government reconsiders biofuels and the weather might improve. The prices wont drop down much, and then it will just be temporary.  But in the long term, yes, we’re going to have to get used to paying £1 and beyond for a loaf of bread.

It might be time to bake your own.