Cost of groceries set to rise in coming months

Feb 12, 2020
The cost of food and vegetables is soon likely to soar. Source: Getty.

Aussies are being told to expect to see the prices of some foods rise after recent bushfires and drought conditions wiped out crops around the country, a new report has warned.

The Agribusiness Outlook report for 2020 has predicted that Australia’s agriculture industry faces a “multi-year rebuild”, and that consumers may see some price rises as a result.

The report’s lead author Tim Hunt said that production volumes are down across the board for the 2019/20 growing season, with poor winter crops, cotton production slashed and meat and dairy reduced due to falling herd numbers.

“Many farmers entered the current drought in good shape — after an extended run of good seasons and prices enabled them to build equity buffers. However, after poor seasonal conditions over the past three years, the sector is in a tough position heading into 2020,” he said.

“2019 was marred by drought, fire, and flood. It was the driest year on record, compounding the drought already being experienced by the eastern states in the years prior.

“And, while recent rainfall across drought-affected regions has brought some optimism, farmers will need continued rain to replenish soil moisture and break the drought.”

Hunt added: “The beef herd and sheep flock will take years to rebuild from current lows while refilling key storages in the southern Murray Darling Basin will likely take several favourable seasons.”

Many Aussie households will likely feel the price spike heavily. The report predicts that wheat prices will rise by up to 4 per cent, which means millions of Aussies could soon be paying more for a loaf of bread. This isn’t the first time wheat prices have gone up in the last three years — in 2018, wheat prices increased by 24 per cent due to a production drop.

Milk may also experience a slight increase, while a low supply of beef is set to increase prices. The price of sugar may rise, and prices may increase for fresh fruit and vegetables to reflect demand. However, it’s not all bad news as lamb prices may fall slightly, after reaching records in 2019, driven by limited supplies and strong demand.

If you’re worried about the price hike, there are ways to cut down that grocery bill. For example, changing it up and exploring stores known for their cheap prices could save you a bucket load. While going to wholesale fruit and vegetable markets in your city or town can really cut costs on boxes of produce.

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