Producer food prices down in first half, no fall in consumer prices

© Hollandse Hoogte / Patricia Rehe
Producer prices of food products were 4.2 percent lower in July than in January 2023. This includes prices of imported products. Prices paid by Dutch consumers for food products went up by 3.7 percent. Less than 15 percent of food producers expect rising selling prices in the next 3 months. This is reported by Statistics Netherlands (CBS) based on a further analysis of the consumer price index (CPI) and Producer Price Index (PPI), and results of the Netherlands Business Survey (COEN).
The so-called total consumption prices of producers consist of two parts. On the one hand, these are the prices charged by Dutch food companies to domestic customers. On the other hand, it concerns import prices paid by Dutch companies for industrially produced food products. Approximately half of the food products consumed in the Netherlands is imported from other countries.

Prices of total consumption by food producers rose by 31 percent in July 2023, relative to with June 2020. Consumer food products became 24 percent more expensive in the same period. Consumer prices of food often follow producer prices with some delay. Long-term contracts are often in place, so it may take some time for supermarkets to pay the higher prices to wholesalers or manufacturers.


Prices paid by consumers for food products remained relatively long below June 2020 levels. In December 2021, consumer food prices exceeded mid-2020 prices for the first time. For prices paid by producers, this was the case from October that year. Producer prices are strongly linked to food prices on the world market.

Decline in dairy producer prices not yet reflected in consumer prices

In July 2023, producer prices of dairy products were 18 percent lower than in the same period of the previous year. Over the same period, prices paid by consumers for these products rose by 12 percent. As of September 2022, dairy producer prices fell while consumer prices continued to rise. However, dairy product prices did stabilise from February this year.

Meat consumer prices increased less than producer prices

As of June 2020, consumer prices for meat rose by 23 percent. Producers paid 33 percent more for meat over the same period, while prices paid by consumers mainly increased from December 2021. Before that, meat consumer prices were still below the June 2020 price. As of the first quarter of 2021, prices of total consumption for food producers were already above the June 2020 prices.

Fewer food producers expect rising prices

In the next 3 months, fewer food producers expect rising selling prices. In August 2023, nearly 15 percent of companies said they expect rising prices in the next 3 months, down from 52 percent in January. Almost 8 in 10 companies do not expect sales prices to change substantially. Falling prices are expected by 6 percent of food producers, while in July this was 10 percent.

Sources

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