For many decades, Australian consumers have benefitted from relatively subdued growth in food prices - particularly when compared with housing, health and education bills. However, Australian food bills have increased by more than many other developed countries because of the country’s status as a major food exporter to booming Asian economies.
"What’s driving the sudden increase in food prices and should consumers expect higher food prices in their weekly shop looking forward?”
This exposes Australian food prices to international prices more often than realised. So while food insecurity is unlikely to play the same role in Australia as in other food importing countries, global insecurity will flow on to prices on supermarket shelves down under.
Australian food and beverage prices have risen an average of 4.3 per cent in the last year and 2.8 per cent in the last quarter alone. But although consumers are faced with the increase in food prices for essentials like milk and bread, longer-term trends show food prices have remained relatively subdued compared to other household costs.
So what’s driving the sudden increase in food prices and should consumers expect higher food prices in their weekly shop looking forward?
Australian food prices have benefitted from many years of technological advances in agriculture. Domestic food prices have remained relatively low as farmers become more efficient, more productive and embrace new technologies.
Over the past two decades, food prices have risen by 62 per cent. In comparison, the cost of housing has risen 98 per cent and health and education are both up 144 per cent. While recent large increases in retail food costs may have come as a surprise to many consumers, they are built off the back of relatively low prices.